EHS Compliance - 2006 Corporate Responsibility Report - Pinnacle West Capital Corporation (PNW)

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Compliance is our minimum standard of performance and we strive to perform beyond compliance in all areas of our business. All our managers and employees are required to uphold regulatory compliance as part of their daily activities and business planning. When non-compliance issues do arise, we take appropriate steps to address those issues and prevent them from happening again.

As an energy supplier and producer, we are subject to environmental, health and safety regulations on the federal, state, county and local levels. In addition, the Four Corners Power Plant located on the Navajo Nation near Farmington, New Mexico, works with the Navajo Nation Environmental Protection Agency to address certain environmental issues.

We maintain a goal of zero notices of violation (NOVs) resulting in fines or penalties. Success in meeting this target is reflected in individual employee performance evaluations and compensation.

In 2006, we received the following citations:

The Four Corners Power Plant received an OSHA citation for $1500, which we paid. This citation was for conductors not protected from abrasion and a missing junction box cover.
2 Notices of Violation (NOV) were issued by Maricopa County Air Quality Department to Palo Verde for failure to comply with dust control requirements, including failure to install trackout control measures. Maricopa County has not yet sought any penalties for these NOVs at the time of this report.
A Notice of Violations (NOV) was received by Palo Verde from the Maricopa Air Quality Department for exceeding the annual PM-10 emission limit resulting from a failure of the cooling tower performance test conducted in December of 2005. PNW is contesting this NOV. Maricopa County has not yet sought any penalties for these NOVs at the time of this report.
A Notice of Violation was received by SunCor Development and two of its vendors from the Maricopa Air Quality Department related to dust control requirements. This resulted in a penalty totaling $17,690, of which SunCor was responsible for $5,440.