Electric System - 2008 Corporate Responsibility Report - Pinnacle West Capital Corporation (PNW)

View the
2008 Annual Report

Subscribe Now

Receive the latest Pinnacle West news and shareholder reports. Enter your e-mail address below and click the "go" button:

The integrated, instantaneous electric system ranks as the most important infrastructure element of a modern economy. Without plentiful and affordable electric power, our economy simply cannot grow. Unlike the need for a new road or public park, the demand for electricity cannot be deferred.

APS' electric system includes power plants for generation of electricity, transmission lines for carrying the electricity from the power plant to a substation where it is transferred over to the distribution system which carries the electricity to our more than 1.1 million customers.

The electric system is going to play a key role in the energy company of the future. Building on our efforts on the generation side to increase renewable energy, building a "smart grid" is an essential part of our sustainable energy future. This grid will more efficiently deliver electricity to our customers and will also better allow our customers to play an important role in a sustainable energy future by improving energy efficiency, use of distributed energy and improved understanding of their energy use, creating local energy networks at customers homes that interact with our grid and improve overall energy efficiency and use. The energy future for our customers may soon take the form of local energy networks like the one llustrated below.

Smart Meters Allow APS to Serve the Customer of the Future

The use of "smart meters" and advanced metering technology holds the potential of providing our customers with a quantum leap in service in the future. The new devices improve reliability, increase control of energy usage and allow for a level of customer service never imagined by prior generations.

Traditional meters only measure customer energy usage, while smart meters, which look no different than their predecessors, have the ability to offer real-time communication between the customer and APS. Smart meters will allow customers to monitor their energy consumption, make easy comparison and selection of energy plans, control appliances from remote locations and potentially lead to fewer outages.

Smart meters update energy usage information hourly as opposed to monthly, allowing the customer to better understand his or her energy use and the effects of conservation measures. In addition to remotely providing hourly meter reads, smart meters can remotely connect and disconnect a customer’s service eliminating the need for field visits by APS employees, this supports a reduction in the APS carbon footprint.

APS will have installed about 300,000 “smart meters” by the end of 2009, with the target to have all one million APS customers installed with smart meters by the end of 2012. Currently, these smart meters allow APS to remotely read and monitor customers meters, reducing costs and environmental impacts associated with traveling to every customer to manually read meters. The smart meters also allow APS to quickly identify problems, such as outages at customers' meters.

In 2009, APS is developing the base infrastructure to extend the ability of the smart meters to allow our customers to use these meters in order to better understand and manage their energy use. The smart meters will allow customers to dictate in real time when electricity is used, how much is used and how it is used. The smart meters will eventually offer two-way communication between customers and APS, limiting smart metering technology only to the imagination of the electric company and its customers. APS is currently developing a roadmap to expand these functions, which will begin in 2010.

The potential benefits for APS customers include the ability to:

• View in real time the amount of energy their home has consumed and compare that usage among different service plans, enabling customers to always select the most cost-effective options.

• Control appliances from a remote location. Essentially, any appliance set up to operate through a remote could eventually be operated remotely.

• Set a budget, and have their usage conform to that budget.

Smart meters also will help identify areas more susceptible to service interruptions, allowing APS to make the appropriate system improvements.

More efficient management and quicker response to the needs of the system will result in higher reliability and lower outage durations. In addition, the new smart meters will result in a significant reduction in the number of on-site meter reads required, resulting in an estimated reduction of 1,510 metric tons per year of CO₂from reduced meter-reading travel when all meters have been installed in 2012.

Learn more about Smart Meters