Pinnacle West Capital : April Investor Meetings

About this update from Pinnacle West Capital Corporation

Powering Arizona's Future April Investor Meetings Table of Contents Company Profile Growth Outlook & Energy Future Financial Outlook 2025 Rate Case Company Profile Service Territory Key facts as of Dec. 31, 2025 Consolidated assets $30B Market cap $10.62B Generating capacity owned or leased (year end) 6.3GW Customers 1.4M Current % from clean energy 58% Retail sales mix (Residential/Non-Residential) 50%/50% As of December 31, 2025. Arizona's largest electric company Growth Outlook & Energy Future Arizona economy continues to be robust and attractive Phoenix housing is affordable compared to major cities in the region Maricopa County ranked top county for economic development in 2025 by Site Selection Magazine Ranked #1 in the nation for semiconductor manufacturing by Business Facilities Magazine Phoenix is ranked #1 out of 15 top growth markets for manufacturing by Newmark Group, a global real estate firm Arizona State University ranked #1 in Innovation for 11 th straight year by U.S. News and World Report Phoenix remains #1 as best positioned industrial real estate market by Commercial Café Report New APS Customer Meter Sets 40,000 30,000 20,000 10,000 - 2013 2017 2021 2025 Residential Customer Growth 1 3% 2.4% 2.5% 1.5%-2.5% 2% 2.2% 2.3% 2.1% 1% 0% 2021 2022 2023 2024 2025 2026E APS Residential Growth Natn'l Avg.-Residential 1 National average from 2025 Itron Annual Energy Survey Report. Arizona continues to be an attractive service territory with strong customer growth Best-in-class service territory supports high tech growth and economic development Arizona is an attractive location for business growth Infrastructure ─ close proximity to major markets in the West with accessibility by rail or truck Weather predictability ─ low propensity for natural disasters and greatest solar irradiance in America Workforce availability ─ three major universities graduating a skilled labor force Affordability ─ business friendly policies and regulation Large C&I customers as a growth driver Accounts for 4%-6% of the 5%-7% long-term weather normalized sales growth 1 guidance Amplifier effect for jobs and surrounding communities leading to residential growth Proposed rate design modifications including direct assignment of generation costs to ensure growth pays for growth 1 Forecasted guidance range through 2030. Arizona's commercial and industrial growth is diverse Source: Arizona Commerce Authority 5.2% Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 0% 1% 2% 3% 4.0%* 4% 5.4% 5% 5.9% 5.5% 5.5% 5.9% 6% 6.8% 7% Weather-Normalized Retail Sales Growth 9 consecutive quarters of growth within or exceeding the original long-term guidance range of 4%-6% Strong C&I sales growth as extra high load factor customers continue to ramp Total retail sales continued strength in 2025 2.0% Residential Sales Growth in 2025 7.5% C&I Sales Growth in 2025 2026 sales growth guidance of 4%-6% Long term sales growth increased to 5%-7% and extended through 2030 Continued trend of robust sales growth * Excludes $11M reduction to unbilled revenues in January 2025 Strong track record of consistently robust sales growth We have an improved regulatory environment Improvements at the Arizona Corporation Commission Balanced, constructive and more consistent outcomes, including improved ROE to APS Approval of Formula Rate Policy Statement Reaffirmation of Rate Case Settlement Policy Continued support of adjustor mechanisms to improve cost recovery Commitments by the Company Sustain investment in customer experience improvements Continue to find alignment with regulators and work with stakeholders on common issues Advocate for reduced regulatory lag Focus on customer affordability Which is requiring us to invest There is significant additional load we need to be ready to serve Significant investment opportunity to serve increased demand 8.6GW 2025 System Peak 4.5GW Committed Load ~20GW Uncommitted Load Opportunity New gas generation: Announced new gas generation build of up to 2 GWs Anchor shipper on new gas pipeline, expected to be in service by late 2029 Palo Verde generating station: Approximately $200 million incremental investment made during Q3 2025 on buyout option for nearly 100 MW of nuclear capacity previously under sale-leaseback Increased investment in Palo Verde capital program of approximately $500M over the next 10 years Strategic transmission: Several major transmission investments to support new resources and the overall system buildout Additional investment in large transmission projects to enable access to out of state generation and additional markets Cumulative Transmission CapEx $6 billion + of investment $2.1B $0.6B 2026 2028 2035 Major Transmission Projects in Development Transmission Investment Strategy Project Miles/kV Est. in-service Investments in Extra High Voltage (EHV) transmission to support reliability, resiliency, and integration of new resources - Over 600 miles of 345kV and above and over 300 miles of 230kV lines in planning period Investments in large transmission projects to enable access to out of state generation and additional markets Constructive and timely recovery through annual FERC Formula rate with wheeling revenue benefiting retail customers Helios to Milligan ~23 mi/230kV 2027 Pinnacle Peak to Ocotillo ~50 mi/230kV 2030 Cotton Transmission Corridor: Panda to Freedom Lines #2 & #1 Jojoba to Rudd ~80 mi/230kV ~29 mi/500kV 2030/2031 2031 Proposed Transmission for New Gas TBD 2030 Source: APS 2026-2035 Ten Year Transmission System Plan Transmission expansion could drive significant capital investment APS rates have remained well below the rate of inflation Average annual % change 2018-2025 CPI CPI (PHX) APS Rates 4.24% 3.62% 2.67% 2018 2019 2020 2021 2022 2023 2024 2025 Maintaining Affordability Disciplined cost management: Process improvements and preventative maintenance to reduce operating costs Customer growth: Long-term goal of declining O&M per MWh as service territory grows Customer Programs: Innovative customer programs to help customers save energy and money Balanced long-term capital plan: Infrastructure investments designed to maintain reliability yet minimize annual customer impact Stakeholder engagement: Working with partners to ensure reliability, affordability, and recovery through appropriate rate design We are focused on maintaining customer affordability Future Financial Outlook Our investor goals going forward Long-term EPS growth of 5%-7% off original 2024 midpoint, supporting competitive total shareholder return Optimized capital plan to reliably serve growing service territory, driving strong rate base growth Managing a healthy capital structure with accretive equity to support investment Declining O&M per MWh with focus on customer affordability Competitive shareholder dividend Solid balance sheet and credit ratings 5%-7% CAGR EPS Growth off original 2024 midpoint 1 Reduction of regulatory lag including formula rates Rate case cadence and potential settlement of future rate cases Continued support of adjustor mechanisms Continued economic development driving sales and customer growth Continued cost management Potential drivers for more consistent and timely cost recovery 1 Long-term EPS growth target based on the Company's current weather normalized compound annual growth rate projections from 2024-2028. Long-term outlook potential remains solid Capital plan to support reliability and continued growth within our service territory APS Total 2025-2028 $10.35B $380 $750 $860 $710 $420 $795 $695 $740 $460 $765 $550 $825 $2.60B $2.65B $2.70B $2.40B $335 $710 $465 $890 Generation Transmission Distribution Other 2025A 2026E 2027E 2028E Source: 2025-2028 as disclosed in the 2025 Form 10-K End-of-Year Rate Base and Growth Guidance 1 ACC FERC 2024 2025 2026 2027 2028 Projected Rate base $ in billions, rounded $12.2 3 $2.5 2 $15.7 $4.0 Current Approved Rate Base and Test Year Detail ACC FERC Rate Effective Date 03/08/2024 06/01/2025 Test Year Ended 6/30/2022 1 12/31/2024 Equity Layer 51.93% 52.28% Allowed ROE 9.55% 10.75% Rate Base $10.36B 2 $2.47B 1 Adjusted to include post-test year plant in service through 06/30/2023. 2 Rate Base excludes $215M approved through Joint Resolution in Case No. E-01345A-19-0236. 1 Guidance excludes CWIP amounts of $1.6B in 2024 and $2.7B-$3.2B in 2028. 2 Derived from APS annual update of formula transmission service rates. 3 Represents unadjusted ACC jurisdictional rate base consistent with regulatory filings. Increased rate base growth within our service territory 2026 Financing Plan DEBT Estimated Amount 4 Maturities Completed APS $1.2B $250M $600 PNW 5 $550M $350M $0 EQUITY Estimated Amount Priced 6 Settled PNW $650M $485M $0 $300M-$350M PNW Debt 2 $1.0B-$1.2B PNW Equity 3 Approx. $3.8B Total Capital Investment Cash from Operations 1 $2.6B-$2.9B APS Debt 2 Approx. $8.0B 2026-2028 Financing Plan Funding Strategy External equity to support balanced APS capital structure and expanded, accretive capital investment Approximately 75% of the 2026 equity need has been priced Maintain strong balance sheet and current credit ratings 1 Cash from operations is net of shareholder dividends. 2 APS and PNW debt issuance is net of maturities. 3 PNW equity is net of $485M already priced. 4 Includes maturities. 5 Excludes refinancing of existing term loan. 6 As of January 2026, amount represents $275M priced under PNW's Block Equity Forward in February 2024 and $210M priced through the At-the-Market (ATM) program. Optimized financing plan to support balanced capital structure Attention : This is an excerpt of the original content. To continue reading it, access the original document here .

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