PHOENIX, Ariz. - Pinnacle West Capital Corporation (NYSE:PNW) today announced a dividend increase of ten cents per share annually, or approximately eight percent. The board's action results in an indicated annual dividend of $1.30 per share (32.5 cents per quarter). The quarterly dividend declared today is payable December 1, 1998 to shareholders of record on November 2, 1998.

Chairman Richard Snell said the company dividend policy calls for annual increases by relatively consistent dollar amounts, which will continue dividend growth at a pace well above the industry average but at payout ratios well below the industry average.

"Our dividend policy provides us with considerable flexibility that we think is very important in today's rapidly changing electric utility environment," Snell said.

Pinnacle West is a Phoenix-based holding company with consolidated assets of $7 billion. Its major subsidiary is Arizona Public Service, the state's largest electric utility. SunCor, its real estate subsidiary, has some 13,000 acres under development.

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.