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Pinnacle West's largest subsidiary, APS, celebrated its 120th anniversary in April, 2006. Back in 1886, APS' first commercial customer was the City of Phoenix. Recently, the City of Phoenix presented APS with an award in recognition of APS' ongoing community service and support to the City. This type of ongoing service and collaboration with the communities we serve, to us, is the very definition of sustainability - working to meet our business needs each day while implementing strategies, business practices and policies that support a vibrant economy and a healthy environment and strong community for future generations.
We plan on building on our 120 years of service and providing exceptional, and sustainable, products and services to our customers far into the future. We don't consider sustainability a "program" or something to do on top of our regular business; rather it is an approach to planning and decision making that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and community developments.
Employing sustainable social, economic and environmental business practices is integral to the way we have done business in the past and how we will do business in the future. For many years, our family of companies have been operated under our corporate philosophy that we term "Doing the Right Thing," in a culture that supports and empowers employees to make decisions that make good business sense and which are also "the right thing" for our community, customers and stakeholders, as well as our environment. This simple, common-sense approach enables employees to provide a high level of customer service; to work in an ethical and honest manner and to become active in our communities through volunteerism, charitable donations and community and business leadership. It has also been the foundation that mandates that every employee be treated with dignity and respect.
We recognize, however, that while we have put a number of good, sustainable business practices in place, we need to continue to become more strategic in our sustainability efforts in order to most efficiently address all of our future risks and opportunities. Our new Eco-efficiency and Technology Innovation Department, discussed below, will help us do that.
New Eco-efficiency and Technology Innovation Department Formed
In 2006, Pinnacle West took a major step in improving our strategic approach through the creation of a new area called the  Eco-efficiency and Technology Innovation Department. The department's charge is to help integrate sustainability initiatives throughout the enterprise and to better address the evolving expectations and opportunities of stakeholder groups and the general public. This department will help us to improve the strategic direction and planning of our initiatives, while allowing the company to better plan and respond to emerging issues, risks and opportunities. The department is headed by a Senior Manager, who is on direct report to the Vice President, Environmental, Health, Safety and Communication. The department does not have line authority over other PNW department - it serves a planning, support and coordination role to other PNW Departments.
A cross-departmental team of key managers and leaders will work in tandem with the Eco-Efficiency and Technology Innovation Department to improve coordination among the company's various departments, establishing our sustainability baseline and evaluating new issues and opportunities in sustainable business practices, and helping ingrain those business practices and philosophies among our front-line employees. This team will also help develop and track sustainability performance, including appropriate metrics.
A policy group of company officers and outside experts will provide executive level oversight to this new sustainability effort. The working group will bring recommendations to the officer group for approval for new business strategies and practices in our sustainability program. The officers will interface with our Board of Directors on these sustainability issues.
We believe this is an important step in our efforts to continuously improve in our sustainability efforts.
Arizona Businesses Advancing Sustainability
PNW also recognizes that if sustainable business practices are going to be successful, they must be the focus of the larger business community, not just for PNW. Therefore, along with Intel Corp., PNW founded a new association dedicated to improving economic, environmental and social business practices in Arizona.
The association is dedicated to improving economic, environmental and social business practices in Arizona. APS and Intel have invited more than 60 companies across Arizona to join in the association. All of the companies invited to participate either are headquartered in the state or have a major Arizona presence. Twenty companies attended the inaugural meeting in March 2007, and at the time of this report 30 companies have committed to participate in this alliance. This is a first-of-its-kind organization in Arizona.
The goal of ABAS is to discuss sustainable business practices and work collaboratively to improve business aspects in the state. And although the purpose of the association has been established, its targets and goals will be decided by the membership. Among the issues the association expects to discuss is how to work with government policy makers to improve the state's sustainability. The group also will look to build better relationships with the communities the companies serve while addressing environmental concerns.
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