|
Our Competitive Advantages
Compared to 10, or even five years ago, we’re a stronger company. We are better positioned to serve customers, protect our environment and increase our value to shareholders. We’re more productive, our product is more reliable and our future is more sustainable.
Thanks to our cost – control efforts, since 1992 our customers experienced an unprecedented period of electric price stability, with rates falling through 2003 while the Consumer Price Index climbed more than 40 percent. Even with our recent price increases, our customers paid about the same for power last year as in 1992. During that same time period, gasoline prices doubled and median home prices in Arizona tripled.
In every area except fuel, we’ve held the line on, or reduced, unit costs. Compared with a decade ago, our non-fuel costs are 4 percent lower in nominal terms. Through our hedging program, we’ve greatly reduced the volatility of our fuel costs and in five years our hedging saved customers more than $200 million.
In 2006, our customers experienced outstanding reliability, and our coal units achieved record capacity factors. In an independent survey by J.D. Power & Associates, APS ranked number one with business customers and number two with residential customers among all investor-owned electric utilities in the West.
Technology has played a large role in higher productivity and helped improve customer satisfaction. Technology also provides greater convenience for customers. For example, year-over-year at aps.com we had 14 percent more new customer account sign-ups and 41 percent more customer transactions.
Though we are working through issues at our Palo Verde nuclear plant, which I’ll address more in the next section, our generation performance continues to be strong. In 2006, our coal units performed 15 percentage points better than the 2005 national average (the 2006 national average was not available at press time) achieving a combined capacity factor of 87 percent. On the natural gas side, our newest combined cycle units – Redhawk 1 and 2 and West Phoenix 4 and 5 – also made a strong contribution, producing about a quarter of our total generation for 2006.
After obtaining our first rate increase in 14 years in 2005, APS successfully tested a key component of our regulatory platform last year when we received several fuel-related increases totaling 14 percent. The Arizona Corporation Commission (ACC) not only responded to our need for emergency relief; they also improved the fuel adjustment process. This provided a much-needed boost to cash flow and will expedite future recovery of fuel-related costs.
Page 2 of 4
Previous Page Next page
|
