PHOENIX – Pinnacle West Capital Corporation (NYSE: PNW) today reported consolidated net income for the quarter ended March 31, 2007, of $16.5 million, or $0.16 per diluted share of common stock. This result compares with net income of $12.5 million, or $0.13 per share, for the comparable quarter a year ago.

The improved results were driven largely by higher retail sales at Arizona Public Service (APS) due to cooler weather and by fewer power plant outages, partially offset by lower results from the Company’s real estate operations. Weather effects, highlighted by the coldest Arizona January in nearly two decades, contributed $8 million, or $0.08 per share, to the quarterly improvement.

Compared with the first quarter a year ago, electricity consumption by APS retail customers increased 7.1 percent in 2007 with a customer base that grew 3.8 percent, according to Chairman Bill Post.

“Serving Arizona’s growth continues to drive our business and our strategies,” he said. “During the first quarter alone, we invested more than $180 million in capital improvements to Arizona’s electric infrastructure. And, over the balance of the year, we expect to invest an additional $750 million to continue reliably serving our retail customers.”

APS reported earnings of $4.3 million for the first quarter of 2007, compared with a net loss of $5.5 million in the 2006 first quarter. Operationally, the 2007 quarter reflected significantly improved performance at the Palo Verde Nuclear Generating Station, which recorded a site capacity factor of 94 percent.

SunCor Development Co., Pinnacle West’s real estate subsidiary, reported net income of $9.3 million, down from $22.0 million for the same period a year ago, primarily due to decreased sales of land parcels and residential property.

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 $12 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 2007 first quarter earnings and recent developments at 2 p.m. (ET), today, Wednesday, April 25, 2007. 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 5864791. A replay of the call also will be available until 11:55 p.m. (ET), Tuesday, May 1, 2007, 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