Economic Impacts - 2008 Corporate Responsibility Report - Pinnacle West Capital Corporation (PNW)

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2008 Annual Report

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The economic and business success of our family of companies is linked to the economic success and sustainability of the communities we serve. That's why Pinnacle West is so active in the community. We have a commitment to bettering the state's economic and social vitality by being active in economic development, through community and business leadership, volunteerism, education, environmental stewardship and charitable giving.

APS has increased residential prices only 11 percent since 1995, a mere one-fourth the rate of inflation.

Pinnacle West has a tremendous economic impact on the communities we serve, including:

Source of Tax Revenue

APS is the state’s highest property tax payer.
The Palo Verde Nuclear Generating Station is the largest single commercial taxpayer in Arizona.

Arizona Income Tax	$24,815,000
Property Tax in Arizona	$118,596,000
Sales & Use Tax
State & Counties	$204,189,000
Cities	$48,891,000
Total	$396,491,000

Major Employer

Pinnacle West Capital Corp., the parent company of APS, is a major Arizona employer, and one of a relatively few S&P 500 companies with headquarters in Arizona.

Construction/Investments

Last year, APS kept pace with Arizona’s growth by investing $900 million in infrastructure, and the company expects that amount to rise and remain around $1 billion annually.
APS is one of the largest construction companies in Arizona due to the extensive construction of new substations, distribution and transmission lines, power plants and other infrastructure necessary to both maintain its system and to expand its system to meet the rapid growth of new customers.
The APS Resource Plan could require a total investment of $18 billion over the next two decades to develop new APS generation and transmission infrastructure. APS may fund these investments directly, or, like Solana, allow other entities to construct plants and then sell power to the company.

Economic Development Efforts

Pinnacle West's economic development efforts are a major contributor to economic growth in Arizona. We are somewhat unique in that our economic development efforts extend to all areas of the state, including rural areas, rather than just focusing in on the major metropolitan areas.
Our product, electricity, is essential to economic growth and a functional economy. Our customers rely on us to provide efficient and reliable electrical service so that they can live, work and grow their businesses.
Pinnacle West's Supplier Diversity Program has provided a significant benefit to the development of a diverse supplier network in Arizona.

"At the very center of APS’ Strategic Framework is our company’s vision statement: Creating a sustainable energy future for Arizona. With this clear focus, we hold ourselves to a high standard as industry leaders in sustainability. Such leadership is a direct result of the hard work and creativity of our workforce. APS employees in each area of our business work to make our operations more efficient and environmentally friendly and helps build healthy, vibrant communities. These efforts make our company stronger by creating value for our shareholders and a better future for our customers and the communities we serve. Moving forward, we will continue to make business decisions with a strategic eye on the long-term. We will continue to weigh each decision’s ultimate impact on our customers, our environment and Arizona’s energy future. "

- Steve Wheeler, Executive Vice President, Customer Service/Regulatory