PHOENIX, Ariz -- Pinnacle West Capital Corporation (NYSE: PNW) today reported consolidated net income for the quarter ended June 30, 1996 of $59.0 million or $0.67 per share of common stock, compared with $42.2 million or $0.48 per share for the corresponding prior-year period.

Results for the second quarter 1996 included an extraordinary charge of $2.5 million after tax (three cents per share) for debt prepayment penalties.

Weather effects, 4.1 percent customer growth and lower interest expense, due to lower debt levels and interest rates, were major contributors to the higher earnings.

Electric revenues were up approximately $46 million, of which almost 60 percent was due to warmer than normal weather in the quarter and milder than normal weather a year ago.

Our system and our employees are meeting the strong demand for electricity this summer and are performing exceptionally, said Chairman Richard Snell.

Snell said the Company was particularly pleased with the Nuclear Regulatory Commission s assessment of Palo Verde operations, which was released this month.

In that report, the NRC stated, It is clear that Arizona Public Service has established the programs and processes necessary to achieve and sustain superior performance.

The second quarter extraordinary charge related to the prepayment of $30 million of parent debt. Pinnacle West also prepaid $30 million of its debt in the first quarter of this year.

Snell said the parent company is in the process of refinancing the remaining $150 million of its high-coupon debt and the associated prepayment penalties, which will be recorded in the third quarter.

The Company has said earnings growth in 1996 and 1997 would be dampened by major provisions in APS recent agreement with the Arizona Corporation Commission, which took effect July 1 and included a 3.40 percent rate reduction and accelerated amortization of regulatory assets.

We are looking to customer growth, continued cost reductions and cash strategies for future earnings progress, Snell said.

For the quarter ended June 30, 1996, APS earned $66.1 million compared with $48.7 million for the corresponding prior-year period.

SunCor Development, Pinnacle West s real estate development subsidiary, and El Dorado Investment, its venture capital subsidiary, reported combined net income of $215,000, versus $1.4 million for the prior-year period.

For the six-month period ended June 30, 1996, Pinnacle West reported net income of $90.2 million (after extraordinary charges) or $1.03 per share of common stock, compared with $66.9 million or $0.77 per share for the prior-year period.

Pinnacle West is a Phoenix-based company with consolidated assets of approximately $7 billion. Its major subsidiary is Arizona Public Service, the state s largest electric utility.

This press release contains forward-looking statements that involve risks and uncertainties, which include, but are not limited to, the ongoing restructuring of the electric industry; the outcome of the regulatory proceedings relating to the restructuring; regional economic and market conditions, which could affect customer growth and the cost of power supplies; the cost of debt and equity capital; weather variations affecting customer usage; and the strength of the real estate market. These factors and the other matters discussed above may cause future results to differ materially from historical results, or from results or outcomes currently expected or sought by the Company.