Updated: April 2023

2022 was one of the most challenging years on record for Arizona Public Service Company (APS), and our employees met these challenges with resiliency and reliability – cornerstones of our operating philosophy. 

During the summer, powerful monsoon storms created widespread damage across Arizona. From May to September, APS replaced a record 811 damaged power poles, which compares to the average of approximately 290 poles our crews typically replace during this time period. In one week alone, our dedicated teams worked around the clock to replace more than 400 damaged power poles following a string of unusually strong storms that hit the communities of Eloy, Arizona City and Douglas. They worked day and night in rainy, hot, humid and muddy conditions to repair damage while their colleagues coordinated with community partners to mobilize cooling stations. Extreme weather conditions such as intense storms and hot temperatures are just some of the challenges brought on by climate change in Arizona.

At APS, a subsidiary of Pinnacle West, we take seriously our responsibility to support our customers, invest in local communities, and build a sustainable future for our state. We are guided by our purpose to do what is right for the people and prosperity of Arizona. This purpose – and the overall APS Promise – guides our Environmental, Social and Governance (ESG) strategies.

In this web-based Corporate Responsibility Report, we detail our company’s actions and highlight the progress we made in 2022 to power Arizona forward. 

Protecting Our Natural Resources

As committed stewards of our state’s natural resources, we’re working to find sustainable solutions to help protect our natural resources by developing clean energy policies and programs that contribute to a cleaner Arizona for future generations.
 
Three years ago, we made an ambitious commitment to provide 100% clean, carbon-free energy to customers by 2050 – while maintaining the reliability and affordability our customers expect.

Since announcing our Clean Energy Commitment in 2020, we have procured 2,115 megawatts (MW) of clean energy technology, consisting primarily of carbon-free solar and energy storage facilities across our system. In 2023 alone, we expect to add 210 MW of utility-scale solar energy, 238 MW of wind energy and 341 MW of energy storage.
 
In addition to our focus on clean energy resources, the nexus between energy and water is top of mind here in the desert Southwest. While significant rain and snow this winter have provided some relief, we are entering our third decade of the megadrought here in the Southwest and sustainable water use remains a priority. The global environmental non-profit CDP recognized Pinnacle West for the fourth year in a row for leadership in acting to protect water security. APS reduced annual groundwater use by 34% between 2014 and 2022.

We recognize it will take new innovations and technologies to build a clean energy future. We’re excited to be leading the charge with public universities, sister energy companies and others on one possible pathway – pursuit of an Arizona clean hydrogen economy. In fact, the Southwest clean Hydrogen Innovation Network (SHINe), for which APS is a leading member, received the green light from the Department of Energy to submit a full application for federal funding to help drive this initiative.

Supporting Customers and Communities

Customers are taking notice of our work to deliver a positive customer experience. Overall customer satisfaction, as reported by J.D. Power, continued to improve over the past two years. APS was among the most improved utilities nationally, and we improved in every major driver including Corporate Citizenship.

We also continue to pursue innovative new ways to partner with our customers to achieve our clean energy goals. Last summer, our Cool Rewards customers delivered more than 100 MW of demand response support during the hottest days.

In 2022, a record amount of residential rooftop solar was installed in APS service territory—13% more than in 2021. Nearly 156,500 solar systems on customer rooftops and parking structures are connected to the APS grid. Recognizing solar is a big decision for customers, we launched our new SolarSmart digital tool to help customers determine if solar is right for them.

We’ve evolved our community giving to provide greater impact through strategic programs, partnerships and grants that align with our APS Promise. We proudly partner with organizations throughout the state in impactful ways, from employees planting trees in neighborhood parks to providing heat-relief assistance for the state’s most vulnerable populations to supporting organizations working to provide affordable housing and to protect the homeless.

Building Trust Through Transparency

Our leadership, employees and board of directors lead with integrity and focus on solutions that create shared value. For example, we’re taking an integrated, cross-functional approach to assess our readiness to comply with forthcoming Securities and Exchange Commission requirements addressing ESG disclosures.

The ESG Executive Council, which is comprised of senior executives and stakeholders, and our Sustainability department are dedicated to integrating ESG best practices into the everyday work of APS. We continue to fine tune the governance and oversight of our ESG strategy, to ensure alignment from the top down, and we’re working to provide further clarity around oversight of ESG trends and climate issues.

Powering Arizona Forward

We are proud of what our company and our employees accomplished in 2022 in service to our customers and communities. While much work lies ahead, we remain dedicated to developing smart, affordable, long-term solutions for Arizona’s energy future by making well-informed decisions today. We will do that by staying grounded in our promise: we do what’s right for the people and prosperity of Arizona.