A Sustainable Energy Future
The electric utility of the future will look much different than the utility of today. Drivers such as climate change; new technologies, including new options for distributed generation and a "smart" energy grid, and changes to the national energy policy, including increased emphasis on renewable energy and energy efficiency, will move the industry toward a much different future than the traditional utility.

At Pinnacle West our primary sustainability challenge lies in responding to this changing future to meet our corporate vision of "providing a sustainable energy future"  in a reliable and affordable manner, while maintaining a high level of social responsibility, workforce performance and environmental stewardship. 

Despite the current economic slow down, our long-term projection for our service territory is for continued strong growth in both the number of customers and the amount of electricity used per customer. This will require APS to work with our customers, our regulatory commission and our other stakeholders to effectively meet all of the challenges for our sustainable energy future, including the need for additional generation capacity and related infrastructure to distribute that power to a growing population. 

Key Issues
Our sustainability efforts are widespread and include efforts throughout our operations and in the communities we serve. We monitor and report on more than 200 different sustainability issues and associated metrics, which you will find throughout this report.  All of these issues are important to us as part of our ongoing business operations. However, we have identified the following key issues as being particularly critical in responding to the challenge of a sustainable energy future. These issues represent some of the greatest challenges and competitive opportunities for our company and industry. Each of these key issues is discussed in detail in this Corporate Responsibility Report.

1. Climate Change
   Climate change, and the move to a low carbon future, is one of the most critical issues facing the electric utility industry. The decisions we make in the near future will impact our customers and communities for decades to come. 
   
2. Integrated Resource Planning
   The resource planning process plays an essential role in meeting future customer needs in an economic manner while minimizing impacts to the environment. The challenge is even greater for APS than for many other utilities due to the strong customer and load growth that APS projects in the future. In planning for future resource needs, APS faces a number of challenges, including electric load growth, natural gas fuel price volatility, limited availability of regional generation capacity, transmission constraints, construction cost escalation and climate change issues.
3. Demand Side Management and Energy Conservation
   While we are taking many steps to reduce the environmental impact of energy generation and delivery, the other side of the equation is reducing the increasing demand for energy. We must help our customers understand and help implement ways to achieve energy conservation.
4. Renewable Energy
   Renewable energy is a crucial part of our energy future, helping to meet the challenge of climate change, while also being an important part of our fuel mix diversification. Done right, renewable energy can provide price stability and be a cost effective, reliable and non-polluting component of an utilities overall energy mix.
5. Electric System Reliability
   Providing reliable electrical service is vital to a successful utility company. There are many challenges to providing a high level of system reliability which APS meets in a number of different ways, including innovative new technologies that will help reshape the future of electric power.
6. Customer Satisfaction
   A high level of customer satisfaction is essential to our ongoing business success. In the face of rising energy costs, achieving high levels of customer satisfaction becomes even more challenging. 
7. Technology Innovation
   Improvements in technology are necessary for us to meet evolving challenges, such as climate change and system reliability and efficiency.  Future leaders in the utility industry must also be technology leaders.  APS has an aggressive technology innovation effort that helps us meet these challenges.