Pinnacle West’s number one asset is its employees. The company offers a wide array of career opportunities in leadership, professional, technical, administrative and internship positions, as well as union and non-union positions. At Pinnacle West, our goal is to treat every employee equitably, professionally and with respect. We have a highly-skilled human resources group dedicated to ensure that labor and employment issues are addressed. We also have internal policies that spell out employees’ rights, and an established code of conduct that all employees are expected to follow (See our ethics policy in the Governance Section of this report). The company also offers an Employee Concerns Program (ECP) through which employees can anonymously report any suspected wrongdoing.

Attracting Employees
As leaders in the electric utility industry the businesses of Pinnacle West take seriously the need to attract, retain and develop a strong workforce. This is why we actively seek highly-skilled, diverse and engaged employees to ensure our company’s success and competitive advantage. Our company’s Web site connects potential job seekers with employment opportunities as well as information about our family of companies.

Pinnacle West also targets students who are attending community colleges or universities, or who are enrolled in vocational programs tailored for the utility industry. The company also works with Arizona State University, University of Arizona, Northern Arizona University, Community Colleges, area high schools and local organizations on scholarship opportunities, career expos and more in order to help develop and hire the local workforce.

APS also partners with the local Chandler-Gilbert Community College Electric Utility Technology (EUT) program. The program, the first of its kind in Arizona, is a collaboration between APS and the college to address our industry’s needs. The two-year program provides community college students with a foundation in lineman training. The program covers an array of areas including the basics of electricity, pole climbing, cross arm installation and safety. Participants earn an associate degree in Electric Utility Technology

APS’ affiliation with the National Association of Colleges and Employers (NACE) allows it to research graduation rates, new graduates’ compensation and other vital information the company can use to attract top talent.

We also have an active intern program, which is discussed more in the Training section of this report.

Total Rewards
Our company offers competitive compensation and rewards for outstanding performance. APS offers competitive salaries, comprehensive benefits and a sound work environment. All of our full-time employees are covered by a defined benefit plan and approximately 80 percent of our employees participate in our defined contribution plan. As of January 1, 2008 our projected benefit obligation for the defined benefit plan is 82 percent.

Employees hold 3 percent of the shares outstanding through the Pinnacle West 401(k) savings plan. Pinnacle West's compensation and benefits plan are discussed in more detail on the Pinnacle West Web site.

Family-Friendly Benefits

• The company offers unpaid sabbaticals to employees who have been employed for five years. General leaves of absence are also available
• Time off for mothers after giving birth falls under the company's Short-Term Disability policy
• We have a listing of child care centers that provide a discount to Pinnacle West employees
• We have a Healthcare flexible spending account and a dependent care flexible spending account for our employees
• Where appropriate, flextime/job share schedules are used in the company
• Based on business needs, part-time work is available upon return in certain circumstances
• The company provides adoption aid reimbursement up to certain limits of qualified adoption expenses

Union Representation
The Company has Collective Bargaining Agreements (CBAs) with two Unions: The International Brotherhood of Electrical Workers Local #387 (IBEW 387), and the Security, Police, Fire Professionals of America (SPFPA). Nearly 30 percent of the company’s employees are represented by one of these Unions.

In each case there is a negotiated Labor agreement that establishes the working rules and other terms and conditions of employment. The company’s philosophy is to work cooperatively with unions where they are in effect and to honor the agreements we have made in our negotiations.

Pinnacle West and APS enjoy a healthy mutual respect with IBEW Local 387, the largest union representing employees within the company. Through this partnership with IBEW, several initiatives have been implemented, including a multi-skill-training program, a process to hire supplemental workers, a drug-free workplace program, an apprenticeship program, a driver qualification program and numerous safety projects. The union and the company often join in community-minded causes such as the Valley of the Sun United Way's Community Service Fund campaign and a baseball field building program with Major League Baseball’s Arizona Diamondbacks.

We respect the rights of our union employees to bargain collectively. We strive to retain positive labor relations and we always try to resolve issues internally and at the lowest level possible to ensure positive outcomes for the employee and for the company.

The company also has a positive discipline program in which leaders work in conjunction with employees and human resources representatives to achieve positive resolution.