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Since October 2008, when the current recession truly manifested itself, many people have asked if our support for sustainability has waned. Our answer is short – no.
Sustainability is not a flavor of the month, or a green initiative that comes and goes depending on other priorities; rather, it is our business model. All our activities whether they are economic, environmental or social are based on an analysis of what will benefit our company and customers. We don’t undertake uneconomic initiatives simply because they make us look green or socially responsible. We undertake those initiatives as part of our core business strategy for short- and long-term success of the company.
In 2008, we advanced this strategy by integrating our sustainability metrics into the business plan of the company. The Strategic Framework for our business plan graphically displays our strategy and it hangs in every conference room and in many offices throughout the company. The outer ring states our values as a company and a workforce. We tell our employees if they cannot undertake their work and live up to the values then they should stop the work and ask what’s wrong. Values bind our actions. They are not situational.
The inner ring represents our areas of focus against which all plans must be analyzed before being put into action. Sustainability’s triple bottom line of developing and implementing environmental, social and economic business strategies is the core of this focus, but sustainability is not a static state-of-being and requires continuous effort to always do better. It also requires acknowledgement that companies, in the end, are only as good or bad as the people who work for them - only people make decisions. Thus we add employees and continuous improvement to our focus on being a sustainable business.
We should be clear that this is not our model for sustainability; it is the one and only business model for our company. Our view is that if done right, our business will be economically successful, the environment will benefit from our decisions and the communities we serve will prosper.
Last year was also significant because APS published its new Resource Plan which articulates our preferred path to serving a projected 50 percent increase in population and energy growth between now and 2025. Given the environmental challenges of climate change and the business risks associated with fossil fuels; considering the likelihood of climate change legislation, our Plan focuses on the opportunities for increased cost effective energy efficiency, renewable energy and other non-carbon emitting generation. Our goal is to meet the projected growth without increasing our carbon footprint.
Our business approach to addressing sustainability continues to be recognized by unaffiliated third parties. In 2008 we were elected to the Global 100 for the fifth year in a row and to the Dow Jones Sustainability Index for the fourth year in a row.
APS also received the electric utility industry's highest honor, the Edison Award, for developing a landmark system that uses artificial intelligence to monitor major transformers in near-real-time. The Edison Electric Institute (EEI) gives this award each year to honor an electric utility for outstanding contributions to the advancement of the power industry.
We believe innovation is essential to our long-term success. In 2008, we achieved record levels of reliability in our system to serve current customers while simultaneously developing and implementing new business plans for innovation in renewable energy resources, smart grid and smart meter technology, and other technologies that hold the promise to make our future operations cleaner, smarter, faster and more efficient - outcomes that the future will clearly demand of us.
This report articulates the steps we took in 2008 on the path to that future.
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Donald E. Brandt
Chairman, President and CEO, Pinnacle West; Chairman and CEO, Arizona Public Service Company
Donald G. Robinson
President and Chief Operating Officer, Arizona Public Service Company
Edward Z. Fox
Vice President & Chief Sustainability Officer, Arizona Public Service Company
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