PHOENIX - Pinnacle West Capital Corporation (NYSE: PNW) today reported a consolidated net loss for the quarter ended December 31, 2008, of $38.9 million, or $0.39 per diluted share of common stock. This result compares with consolidated net income of $2.9 million, or $0.03 per diluted share, for the same quarter a year ago. The lower quarterly results were due largely to real estate impairment charges of $32.5 million, net of tax, for SunCor, the Company’s real estate subsidiary.

Arizona Public Service (APS), the Company’s principal subsidiary, reported a 2008 fourth-quarter net loss of $16.4 million, compared with net income of $0.3 million for the same period a year ago. The utility’s 2008 results were negatively impacted by higher expenditures for continuing infrastructure additions and improvements and lower mark-to-market valuations of fuel and purchased power contracts.

“Our fourth-quarter results reflect the need to continue to meet our customers’ electric demand in the future,” said Chairman Bill Post. “While our growth rate has dropped significantly, we still ended the year with more than 10,000 new customers.”

Earlier this year, APS filed a comprehensive long-term resource plan with the Arizona Corporation Commission to address the future energy needs of Arizona. “Although our economy has been damaged by the real estate downturn and national recession, we must stay diligent in our focus to ensure Arizonahas the energy resources to meet our future needs,” said APS CEO Don Brandt. “We are working aggressively to minimize our costs while maintaining our electric reliability.”

For the year 2008 as a whole, Pinnacle West reported 2008 consolidated net income of $242.1 million, or $2.40 per diluted share, compared with 2007 net income of $307.1 million, or $3.05 per diluted share.

For more information on Pinnacle West’s operating statistics and earnings, please visit www.pinnaclewest.com/financials.

Conference Call

Pinnacle West invites interested parties to listen to the live web cast of management’s conference call to discuss the Company’s fourth-quarter and year-end results, as well as recent developments at 12:00 noon (ET), today, Friday, February 20, 2009. The web cast can be accessed at www.pinnaclewest.com/presentations and will be available for replay on the web site for 30 days. To access the live conference call by telephone, dial (877) 356-3961 and enter Conference ID Number 81428217. A replay of the call also will be available until 11:55 p.m. (ET), Friday, February 27, 2009, by calling (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally and entering the same Conference ID number as above.

Pinnacle West is a Phoenix-based company with consolidated assets of about $11.6 billion. Through its subsidiaries, the Company generates, sells and delivers electricity and sells energy-related products and services to retail and wholesale customers in the western United States.  It also develops residential, commercial, and industrial real estate projects.

Media:
Alan Bunnell, (602) 250-3376

Analyst:
Rebecca Hickman, (602) 250-5668
Lisa Malagon, (602) 250-5671