Whether 2003 or 2008, customer growth is the fuel that powers our industry’s financial engine. In this area, APS has few peers. In 2003, our customer growth was again rapid and unique. APS experienced 3.3 percent customer growth (roughly 30,000 new customers). This was about three times the industry average.

The epicenter of this growth is found in the heart of our service territory – the Greater Phoenix area. In 2003, approximately 3.4 million residents called the Phoenix area home – a 17 percent increase from just five years earlier. In 2003, the Phoenix metro area also issued more than 47,000 building permits, the highest number of permits in the last 18 years.

Of course, growth benefits the company’s bottom line only if it is met with sufficient resources. In 2003, our company completed a 530-megawatt unit at the West Phoenix Power Plant. By the end of 2004, the company will have added nearly 2,400 megawatts of new generating capacity (including about 1,800 megawatts in Arizona) in the last four years.

In addition to increasing our generating capabilities, we continue to expand our transmission and distribution system. In 2003, we energized a new 37-mile 500-kilovolt transmission line that runs from the Palo Verde Nuclear Generating Station to the Phoenix area. Completion of the line allowed more than 1,200 megawatts of additional power to flow into Arizona’s largest metropolitan area and played a vital role in APS’ ability to avoid severe delivery problems during the summer of 2003.

Renewable energy resources will clearly be a large part of Arizona’s energy future. Construction is currently underway on the Prescott (Ariz.) Airport Solar Power Plant, which will be one of the largest photovoltaic solar plants in the world. We are also a major participant in a new biomass plant in northeastern Arizona, which can take the by-products of negative situations – Arizona’s vast Rodeo-Chedeski fires of 2002 and our state’s devastating bark beetle infestation – and convert them into fuel. Most recently, APS announced it will partner with Western Wind Energy Corporation to establish Arizona’s first commercial wind farm.

No other electric utility in the U.S. can match our dividend growth over the last 10 years. In that period, Pinnacle West’s average dividend growth rate was 8.4 percent per year, ranking us number one industry-wide. In 2003, our annual dividend was increased 10 cents per share for the 10th consecutive year. We recognize that dividends underpin stock performance. Our track record in growing our dividend has been a distinguishing investment characteristic for our company.