PHOENIX - Pinnacle West Capital Corporation (NYSE: PNW) today reported consolidated net income for the quarter ended March 31, 2002, of $53.8 million, or $0.63 per diluted share of common stock. This result compares with $59.5 million, or $0.70 per share, for the comparable quarter a year ago.

The lower earnings resulted primarily from decreased contributions from power marketing due to significantly lower wholesale prices in the western United States and by a retail electricity price decrease. However, the quarter-to-quarter comparison benefited from lower replacement power costs, and decreased power plant maintenance and generation reliability expenses.

"Although we’ll never be pleased with a decline in earnings, we still produced solid results despite the significant drop in wholesale market prices" said Chairman Bill Post. "We maintain our position from last October that matching 2001 earnings this year will be a challenge due to the lower western wholesale power prices, a sluggish economy, weather effects and retail price decreases."

The 1.5 percent retail price decrease, totaling about $27 million annually, became effective July 1, 2001, as part of Arizona Public Service’s (APS) commitment to reduce residential customer prices a total of 16 percent during the 10-year period ending 2004. APS plans to again decrease its retail prices 1.5 percent this July, bringing the total reduction for residential and small commercial customers to approximately 14.5 percent since 1994.

APS’ retail service territory continued to experience strong customer growth of about 3.2 percent, about three times the national average. However, retail sales were impacted by milder weather and were flat at 4.9 billion kilowatt-hours (kWh) compared with the same period last year. First quarter wholesale power sales were 4.4 billion kWh, up 2.9 percent from the 4.3 billion kWh sold in the comparable 2001 period.

The Company’s electricity operations earned $51.7 million for the quarter ended March 31, 2002, compared with $58.4 million for the year-ago quarter. These operations include APS’ regulated retail business and the Company’s wholesale marketing functions.

SunCor Development Co., the Company’s real estate subsidiary, and El Dorado Investment Co., its investment subsidiary, recorded combined net income of $2.1 million compared with $1.1 million for the prior-year quarter. The difference was primarily due to increased land and home sales.

Pinnacle West is a Phoenix-based company with consolidated assets of $8 billion. Through its subsidiaries, the company generates, sells and delivers electricity and sells electricity and 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.

For more information on Pinnacle West’s operating statistics and earnings, please visit www.pinnaclewest.com/main/pnw/investors/financials/quarterly/default.html.

Pinnacle West invites interested parties to listen to the live webcast of management’s conference call to discuss the Company’s 2002 first quarter earnings at 8 a.m. (ET) on Tuesday, April 23, 2002. The conference call will be available online live on Pinnacle West’s website at http://www.pinnaclewest.com/investor/presentations/ and will remain available on the website through May 22, 2002. To access the live conference call by telephone, dial (212) 346-7472, reservation number 20476746. A replay of the call will also be available until 10 a.m. (ET), April 30, 2002, by calling (800) 633-8284 and entering reservation number 20476746.

	PINNACLE WEST CAPITAL CORPORATION
	CONSOLIDATED STATEMENTS OF INCOME
	(Dollars in Thousands, Except Per Share Amounts)
	(Unaudited)
		THREE MONTHS ENDED				TWELVE MONTHS ENDED
		March				March
		2002		2001		2002		2001
Operating Revenues
	Electric	$ 579,772		$ 906,494		$ 4,055,743		$ 3,992,076
	Real estate	41,185		32,335		177,758		148,811
	Total	620,957		938,829		4,233,501		4,140,887
Operating Expenses
	Purchased power and fuel	221,036		516,424		2,368,830		2,323,784
	Operations and maintenance	117,430		125,250		522,275		465,006
	Real estate operations	37,358		31,008		159,812		132,610
	Depreciation and amortization	99,913		104,781		423,035		433,553
	Taxes other than income taxes	26,758		25,303		102,523		99,691
	Total	502,495		802,766		3,576,475		3,454,644
Operating Income		118,462		136,063		657,026		686,243
Other Income (Expense)		1,088		(738)		(3,939)		(36,635)
Interest Expense
	Interest charges	44,688		42,749		177,761		169,697
	Capitalized interest	(14,123)		(10,427)		(51,558)		(28,216)
	Total	30,565		32,322		126,203		141,481
Income Before Income Taxes		88,985		103,003		526,884		508,127
Income Taxes		35,228		40,798		207,965		197,660
Income Before Accounting Change		53,757		62,205		318,919		310,467
Cumulative Effect of a Change in Accounting
for Derivatives - Net of Income Tax		-		(2,755)		(12,446)		(2,755)
Net Income		$ 53,757		$ 59,450		$ 306,473		$ 307,712
Weighted Average Common Shares Outstanding - Basic		84,735		84,727		84,719		84,732
Weighted Average Common Shares Outstanding - Diluted		84,884		84,966		84,910		84,974
Earnings Per Weighted Average Common Share Outstanding
	Income Before Accounting Change - Basic	$ 0.63		$ 0.73		$ 3.76		$ 3.66
	Net Income - Basic	$ 0.63		$ 0.70		$ 3.62		$ 3.63
	Income Before Accounting Change - Diluted	$ 0.63		$ 0.73		$ 3.76		$ 3.65
	Net Income - Diluted	$ 0.63		$ 0.70		$ 3.61		$ 3.62
Certain prior year amounts have been restated to conform to the 2002 presentation.

Media:
Alan Bunnell, (602) 250-3376

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