PHOENIX - Pinnacle West Capital Corporation (NYSE: PNW) today reported lower consolidated net income for the quarter ended March 31, 2006, of $12.5 million, or $0.13 per diluted share of common stock. This result compares with net income of $24.4 million, or $0.27 per share, for the comparable quarter a year ago.

Arizona Public Service (APS) reported a net loss of $5.5 million for the first quarter of 2006, compared with net income of $27.0 million for the same period a year ago. Whereas, SunCor Development Co., Pinnacle West’s real estate subsidiary, delivered solid performance, reporting net income of $22.0 million, compared with $9.4 million in the 2005 first quarter.

“APS’ first quarter sales growth was strong, increasing 4 percent in 2006. But the associated revenue growth was more than offset by high natural gas and purchased power prices,” said Chairman Bill Post. “The power supply adjustor approved by the Arizona Corporation Commission (ACC) last week allows us to begin collecting a significant portion of our fuel cost increases on a timely basis.

“And, the ACC’s order will improve APS’ cash flow, which is essential to maintaining its financial integrity and investment grade credit ratings so as to allow us to continue supporting Arizona’s growth in the most cost-effective manner for our customers.”

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

Pinnacle West is a Phoenix-based company with consolidated assets of about $11 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.

Conference Call

Pinnacle West invites interested parties to listen to the live web cast of management’s conference call to discuss the Company’s 2006 first quarter earnings and recent developments at 1:00 p.m. (ET), today, Tuesday, May 9, 2006. 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 reservation number 8073391. A replay of the call also will be available until 11:55 p.m. (ET), Tuesday, May 16, 2006, by calling (800) 642-1687 in the U.S. and Canada or (706) 645-9291 internationally and entering the same reservation number as above.

Contacts

Media:
Alan Bunnell, (602) 250-3376

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