Pinnacle West Capital Corporation · NYSE:PNW
Pinnacle West Capital — Investor Day (November 2012)
19 slides from Pinnacle West Capital's investor day presentation, Nov 9, 2012
Slide 1: Delivering Superior Shareholder Value: Operations Overview
DELIVERING SUPERIOR SHAREHOLDER VALUE OPERATIONS OVERVIEW Mark Schiavoni
Slide 2: Operations Overview Agenda
2 OPERATIONS OVERVIEW AGENDA Planning and operational execution position APS for success. Safety • Top decile in the industry Resource Planning • Meeting growing energy needs through a balanced resource mix Energy Innovation • Strategically piloting and implementing advanced technologies Energy Deli
Slide 3: Safety = #1 Critical Area of Focus
3 SAFETY = #1 CRITICAL AREA OF FOCUS APS continues to build and maintain a safety-first culture that strives for “zero incidents.” OSHA Recordable Incidents Accident Injury Rate 2007 – 3Q2012 200 2.8 177 2.4 160 2.0 120 108 1.6 97 80 1.2 65 2011 EEI Top Quartile 58 49 0.8 40 2011 EEI Top Decile 0.4
Slide 4: Resource Planning for Reliability and Sustainability
RESOURCE PLANNING FOR 4 RELIABILITY AND SUSTAINABILITY We will meet future load growth through a balanced resource mix including renewable resources and energy efficiency programs. Additional Resources by 2027 MW 14,000 Load Requirement Including Reserves 3% Four Corners Transactions, Net 12,000 21%
Slide 5: Resource Planning for Reliability and Sustainability
RESOURCE PLANNING FOR 5 RELIABILITY AND SUSTAINABILITY APS has multiple resources options to serve future energy growth. • Plans to meet near-term needs include renewable energy and energy efficiency additions • Options for future resource decisions • Intermediate term: renewable energy and natural
Slide 6: Renewable Energy Rises with the Sun
6 RENEWABLE ENERGY RISES WITH THE SUN We are helping Arizona become the “Solar Capital of the World.” Arizona Arizona Germany and Japan are among countries with highest installed solar capacity, yet have solar conditions far inferior to Arizona
Slide 7: APS AZ Sun Program Provides Earnings Growth Potential
APS AZ SUN PROGRAM PROVIDES 7 EARNINGS GROWTH POTENTIAL Owning solar resources makes sense for our customers and the environment and provides returns to shareholders. • Up to 200 MW utility-scale photovoltaic solar plants owned by APS • Up to $975 million capital investment • In service 2011 through
Slide 8: Solana
8 SOLANA Solana will provide more than one-quarter of APS’s renewable energy target by 2015. • 250 MW 30-year PPA for all output (~900 GWh/year) • Concentrating solar trough facility 70 miles southwest of Phoenix • On target for 2013 commercial operation • 90%+ on-peak capacity factor with use of th
Slide 9: Arizona's Renewable Resource and Energy Efficiency Standards
ARIZONA’S RENEWABLE RESOURCE 9 AND ENERGY EFFICIENCY STANDARDS Our programs address Arizona’s aggressive renewable energy and energy efficiency standards. Renewable Energy (RES) Minimum Requirements Portion of retail sales to be supplied by renewable resources • 5% by 2015 • 15% by 2025 Distributed
Slide 10: APS Energy Innovation Initiatives
10 APS ENERGY INNOVATION INITIATIVES APS is strategically piloting and implementing a number of advanced technologies. INFORMATION TECHNOLOGY APS’s primary objectives to Cyber Security deploying a smarter Communications Infrastructure grid: • Optimize System Reliability & Performance • Empower GENER
Slide 11: Transmission Investment Essential
11 TRANSMISSION INVESTMENT ESSENTIAL Strategic transmission is necessary to maintain reliability and deliver diversified resources to our customers. • 10-Year Transmission Plan NAVAJO FOUR NORTH CORNERS 100 MW (115-kV and above) 970 MW • $550 million of new transmission investment • 269 miles of new
Slide 12: Energy Delivery Performance
12 ENERGY DELIVERY PERFORMANCE Top-quartile reliability is reducing the frequency of customer outages. Average number of customer System Average Interruption • Comprehensive maintenance and interruptions/year Frequency Index (SAIFI) inspection program includes: 1.20 • EEI Edison Award winning TOAN,
Slide 13: Fossil Fleet Summer Performance
13 FOSSIL FLEET SUMMER PERFORMANCE APS’s Fossil Fleet is delivering exceptional performance during the summer peak season. Summer Performance June – September GWh EAF Fossil Summer 7,000 94% Equivalent Availability Factor (EAF) 2010 2011 2012 6,900 93% Coal 79.2% 90.9% 86.6% 6,800 92% 6,700 Gas & Oi
Slide 14: Environmental Update
14 ENVIRONMENTAL UPDATE APS is actively pursuing options to comply with environmental regulations. • Mercury and Air Toxics Standards (MATS) • EPA program to control mercury and other air pollutants • Regional Haze • EPA program to reduce visibility impact of SO2 and NOx • Cooling Water Intake Struc
Slide 15: Environmental, Sustainability and Governance Leadership
ENVIRONMENTAL, SUSTAINABILITY 15 AND GOVERNANCE LEADERSHIP We are recognized internationally for our achievements. Ranked on Dow Jones Rated 4th Highest Intelligent Sustainability Index since 2005 Utility in 2011 Environmental Certification Gas/Oil Fleet – 2011 Coal Fleet - 2012 1st utility in world
Slide 16: Operations Overview Appendix
Operations Overview Appendix
Slide 17: A Well-Balanced Generation Portfolio
17 A WELL-BALANCED GENERATION PORTFOLIO Ownership Net Capacity Fuel / Plant Location Units Dispatch Commercial Ops. Date Interest1 (MW) Nuclear Palo Verde Wintersburg, AZ 1-3 Base 1986 - 1989 29.1% 1,146 Total Nuclear 1,146 Coal Cholla Joseph City, AZ 1-3 Base 1962 - 1980 100 647 Four Corners Farmin
Slide 18: Renewable Purchase Power Contracts
18 RENEWABLE PURCHASE POWER CONTRACTS Commercial Owner/ PPA Operation Term Capacity Fuel / Contract Location Developer Status1 Signed Date (years) Net (MW) Solar Solana Gila Bend, AZ Abengoa UC Feb-2008 2013 30 250 Ajo Ajo, AZ Duke Energy Gen Svcs IO Jan-2010 2011 25 5 Prescott Prescott, AZ SunEdiso
Slide 19: Four Corners Power Plant Facts & Figures
FOUR CORNERS POWER PLANT 19 FACTS & FIGURES Common Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Commercial Operation Date 1963 1963 1964 1969 1970 Original Cost ($M) $41 $382 $164 Net Book Value at 6/30/12 ($M) $27 $0 $130 Current Depreciation Ends 2038 Mid-2012 2038 2038 Current Expiration Dates Site Lease J