WHY THE CURRENT RATE CASE IS SO IMPORTANT

We remain focused on the future, just as we were in 1999. But today we’re in a state of regulatory transition, without sufficient structure to meet our rapidly growing customer demand. That regulatory structure is needed now so we can continue our outstanding performance for customers and investors.

The unresolved issues in the rate case we filed last year include consolidating Pinnacle West Energy’s Arizona units into APS and restoring the $234 million write-off we were ordered to take as part of the 1999 Settlement Agreement. These issues, while important in themselves, point to the central regulatory issue confronting the ACC and this company – establishing the rules for the future.

In the past, we have been clear that a focus on the future required a firm grounding in regulatory consistency. We thought with the signing of the 1999 Agreement, we had achieved sufficient predictability and certainty, and we kept our commitments. With our agile approach to regulation and competition, we were able to secure the power we needed to keep the lights on, our customers satisfied and Arizona’s economy running.

Today, that predictability and consistency are lacking. We have unfinished business, but we are confident we and our regulators can work together to re-establish a framework that balances customer value with investment risk and reward.

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