executive-letter

 Updated: April 2024

At Arizona Public Service (APS), more than 6,000 team members work together to deliver on our mission to provide reliable, affordable and clean energy to our customers every day, while advancing our vision to create a sustainable energy future for Arizona.

From record snowfall in the high country to record-setting heat in the desert, we kept power flowing to customers in 2023 through thoughtful planning and partnerships. 

Maintaining Reliability

Reliable electricity is essential for the health and well-being of our customers, especially during major weather events like winter snowstorms and historic heatwaves. In 2023, we kept air conditioners running despite a record 22 days of 115 degrees temperatures or higher. On July 15, 2023, customers shattered the all-time company record with a peak demand of 8,162 megawatts (MW) and exceeded the prior 2020 record on 18 different days in 2023.

We strategize years in advance to ensure we have the capacity to withstand challenges like those of 2023. Our strategy includes monitoring customer growth and weather patterns and using a diverse mix of energy sources from renewables and nuclear to flexible natural gas. Our team worked collaboratively with a diverse group of stakeholders to develop our 2023 Integrated Resource Plan and find pathways to continue providing top-tier reliability into the future, while keeping rates affordable.

Customers are a key partner in maintaining grid reliability. The APS Cool Rewards program is one of the largest smart thermostat programs in the country.  Last year, customers using more than 80,000 smart thermostats combined to conserve 135 MW of power on the hottest summer days—the equivalent of a small power plant’s production.

Building a Clean Energy Future

We continue to make progress on our Clean Energy Commitment to provide 100% clean, carbon-free energy to customers by 2050. Since announcing our commitment in 2020, we have procured nearly 5,000 MW of new clean energy and storage. In 2023, we issued an All-Source RFP for an additional 1,000 MWs of reliable capacity, including at least 700 MW of renewable energy.

We added 448 MW of clean energy to the APS electric system in 2023, including the Agave Solar Plant, our largest owned solar power plant with 150 MW of capacity.  We also added nine energy storage systems that provide about 200 MW of power, enough to serve 32,000 Arizona homes for three to four hours daily.

Combined with other renewables and the Palo Verde Generating Station, one of the largest sources of carbon-free energy currently in the U.S, APS is already 51% clean. Energy efficiency comprises 15% of this total; over 1,600 MW of distributed renewable generation on our system. We are on track to meet our Clean Energy Commitment milestone of being 65% clean and carbon free by 2030—notwithstanding unprecedented growth in Arizona.

Taking Care of Our Employees, Customers and Communities

Our employees remain committed to putting customers first and achieving a best-in-class customer experience. In the 2023 J.D. Power Electric Customer Satisfaction surveys, APS ranked in the second quartile for large investor-owned utilities for both business and residential customer satisfaction – a meaningful accomplishment considering APS was fourth quartile as recently as 2021. In fact, residential customers ranked APS second in our peer set in 2023 for both “Perfect Power” (no brief or lengthy outages) and “Phone Customer Care.”

Giving back to our communities is part of our culture and thousands of employees volunteered their time in meaningful ways. Whether serving on the board of 150 unique partner organizations, planting nearly 400 trees to provide shade cover in vulnerable communities or surprising 500 teachers at K-12 Title 1 schools with gift cards to buy much-needed school supplies, we invest resources to improve lives today and build for the future.

In 2023, APS collaborated with Salt River Project and Tucson Electric Power to provide support to communities impacted by planned exits from coal-fired generation. Nine organizations serving Arizona communities were selected to receive economic development grants from the Joint Utilities Grant Funding Program.

The Phoenix Business Journal recognized APS for its efforts to support vulnerable citizens at risk from intense summer heat. We worked with key nonprofits to develop a comprehensive heat relief program to expand services for vulnerable populations and initiated a pilot program that provides emergency air conditioning repairs or replacements for low-income households at no cost.

We support low-income customers and those struggling to pay their bills with a robust portfolio of programs to help during times of need. This includes a network of agencies across the state that can qualify customers for various utility bill assistance programs, as well as a new tiered discount program for qualifying customers. We offer the highest discount for limited income utility customers in Arizona, helping reduce their energy burden.

Looking Ahead

We’ve come a long way in 2023 and will need to be more creative and collaborative than ever to maintain reliability and manage costs to customers, while transitioning to a cleaner energy future. We’re doing just that by implementing future-focused strategies, including:

  • A strategic transmission plan to support growing energy needs, strengthen reliability and connect to additional generation resources;

  • Solutions to strengthen data integrity and cross-functional collaboration to implement process improvements and solutions; and

  • Expanded fire mitigation tools to better protect customers from extreme weather events like wildfires.

Customers know they can count on us to power their lives and businesses. Our job is to continue the excellent service they have come to expect by making responsible, necessary investments that ensure reliability, maintain affordability and secure a clean, balanced energy supply. As Arizona stewards, we are committed to the people and prosperity of our state for years to come.

Jeff Guldner
Chairman of the Board, President and
Chief Executive Officer
Pinnacle West Capital Corporation

Ann Becker
Vice President, Sustainability
Arizona Public Service Company

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