APS Safety Performance Improves Significantly in 2008
Safety is the overriding value of all aspects of our business. A primary responsibility of all APS employees is to ensure their safety, that of their co-workers and the public at large. While the growth of our service territory dictates greater efficiency and productivity, these added demands cannot come at the expense of the health and safety of our employees. Every employee must have the opportunity to return home at the end of their shift in the same condition in which they arrived.

In 2008, we continued our efforts to improve our safety performance, which had decreased in 2006 and 2007. At the beginning of 2008 all leaders were required to participate in a Leader Safety Awareness training program and to conduct special safety meetings with their employees to discuss the importance of safety in the company. Throughout 2008 emphasis was placed on employee participation in behavior-based initiatives designed to focus the attention of our workforce on safety awareness and minimizing at-risk behavior and conditions. These efforts resulted a 39-percent reduction in OSHA recordable injuries in 2008 compared to the previous year.

APS Safety Performance     2004 2005 2006 2007 2008 Total Recordable Cases           APS Total 99 152 156 177 108 APS Injury Incident Rate (AIIR)(a) 1.53 2.28 2.31 2.49 1.52 Electric & Gas Utility Industry Average(b) 3.78 3.07 3.21 3.12 2.70 Lost Work Day Cases           APS Total 31 43 41 61 47 APS Injury Incident Rate (LWIR)(a) 0.48 0.64 0.61 0.86 0.64 Electric & Gas Utility Industry Average(b) 0.75 0.73 0.75 0.63 0.70 Lost Work Days           APS Total 2217 1070 1056 1636 1198 APS Injury Incident Rate (SIR)(a) 34.36 16.02 15.60 22.97 16.40 Electric & Gas Utility Industry Average(b) 37.14 30.85 24.64 25.59 24.25 APS Fatalities 0 0 0 0 1 (a)All injury Incident Rate (AIIR) : The total of all recordable cases multiplied by 200,000 and divided by the actual employee exposure hours worked. Lost Work Day Incident Rate (LWIR) : The total of all recordable cases multiplied by 200,000 and divided by the actual employee exposure hours worked. Severity Incident Rate (SIR) : The total of all recordable cases multiplied by 200,000 and divided by the actual employee exposure hours worked. (b)Source: Edison Electric Institute Safety Survey.

While APS significantly improved our overall safety performance in 2008, the Company also experienced its first on-the-job fatality since May, 2000. The APS family is deeply sadened by this tragic event and is determined to continue our efforts in continuously working to create and anchor an accident-free culture.

Safety Goal
Our 2008 to 2013 APS business plan includes a safety goal: Create a "zero incidents" culture & operating model. The peformance measure for this goal is to achive the top quartile of utilities nationwide in OSHA recordable injuries.

In 2009, we are continuing our emphasis on safety improvement with a focus to encourgage employees to have zero accidents.  Employees are expected to model three simple but critically important safety behaviors:

1. If its not safe - don't do it.
2. If you're not sure - ask.
3. If you think its unsafet - say something.

In addition, we continue to ask employees to focus on six fundamental principles of safety:

• Use the right tool for the job
• Get the necessary training
• Wear appropriate personal protective equipment
• Conduct thorough tailboard (pre-job) briefings
• Stop work if there is a safety concern or question
• Report all close calls

Safety Organization
Our management team is responsible and accountable for safety performance. However, we recognize that employees and their immediate supervisors also have a key role in driving personal behavior and therefore are key to our safety results. Working in concert with our full-time safety and health professionals also is critical to our success. 

Our Safety and Health Advisory Team is responsible for providing cross-functional strategic direction and leadership on companywide health and safety issues. The team consists of safety and health professionals from each of the company’s business units. These professionals represent their respective business unit and communicate health and safety issues. The team makes recommendations to the company’s officers on all matters requiring executive oversight. 

The team is supported by the Prevention Team, which advances programs and practices that promote employee wellness and accident prevention, and the Compliance Team, which addresses regulatory compliance matters and interpretation of best management practices.  We also have an Accident Prevention Manual (APM) Rules/Revision Committee comprised of company and Local IBEW employees who review the safety rules and any employee requests for revisions to the manual. In addition to fielding requests, the Committee periodically reviews the manual to ensure it remains timely and useful in helping to prevent accidents.  Craft Observation Teams conduct field observations of membership work practices and work conditions. This practice enhances trust among union membership and creates an environment that is open to immediate corrective or improvement actions. The Palo Verde Nuclear Generation Station has adopted this same approach utilizing the talents of performance review craft personnel and leadership through a rotational assignment. A similar approach is used at several APS Generation facilities during critical overhauls and outages.

Incident and Close Call Tracking
Safety related incidents are reported through an electronic Event Notification and Tracking System, and managers are strongly encouraged to also report close calls. By evaluating close calls and making corrections when appropriate, we believe we can identify potential problem areas before they result in an accident. The number of close calls reported has increased over the past several years as we have communicated our reason for doing so.

Contractor Safety Program
Pinnacle West also employs a contractor safety program which communicates the minimal requirements we expect of our contractors in terms of environmental compliance and employee safety. This program is available to the public online.