APS System Improvements Help Provide Arizona Customers With Outstanding Summer Service and Reliability

October 22, 2008

During a summer in which monsoon storms and high temperatures dominated local news, APS continued to provide reliable service to the Company’s more than 1.1 million customers throughout Arizona.

“It’s our job to be prepared for any potential contingency, and to ensure the lights come on and air conditioning is available when our customers flip the switch,” said APS President and CEO Don Brandt. “And, while the summer of 2008 brought its share of challenges, APS was well-prepared to deal with once-in-a-generation storms and 20 days of 110-degree temperatures in the Valley.”

Brandt said electricity ranks as the most important infrastructure element of a modern economy, and that without plentiful, affordable and reliable electric power, the economy simply cannot grow.

“Unlike the need for a new freeway or public park, the demand for electricity cannot be deferred,” said Brandt. “Even in the midst of an economic downturn, Arizona continues to grow, and we must address our customers’ energy needs today – and in the future.”

Among APS’ efforts to preserve, ensure and improve reliability and customer service:

 -- Strong Palo Verde Operations. All three units of the Palo Verde Nuclear Generating Station operated simultaneously for 100 continuous days this summer. During this period, the plant operated at a 99.6 percent capacity factor, setting a Palo Verde record for producing 9.4 million megawatt-hours (MWh) of energy.  With the completion of steam generator replacements earlier this year, coupled with other equipment changes and upgrades, the plant's capacity increased by more than 5 percent or about 210 megawatts (MW), bringing the plant total to approximately 4,010 megawatts, enough to serve more than 1.2 million customers.  -- Storm Preparation and Reliability. Through extensive training and practice, APS employees successfully dealt with one of the most damaging monsoon seasons in more than 20 years. Despite the monsoon's impact, APS once again provided outstanding service to its customers, with reliability measures among the best in the electric utility industry. Through the end of September, the Company was on pace to establish all-time best years in reliability measurements that track average number of service interruptions per customer and average outage duration per customer. In fact, comparing APS' 2000 figures with 2008's projected numbers, customers are experiencing a 34 percent reduction in outages per customer and a 14 percent decrease in average outage duration per customer.  -- New Generating Resources. The Company brought online two new units at APS' Yucca Power Plant in Yuma in June. The two 48-MW gas- fired units helped ensure a reliable supply of power for the growing Yuma area.  -- Keeping Pace with Growth. In anticipation of meeting 2008 summer demand, APS constructed or rebuilt 47 miles of transmission lines and upgraded several substations around the state. These capital improvements helped APS manage a 2008 system peak of 7,026 MW on Aug. 1. The peak was within 2.5 percent of the pre-summer forecast of 7,202 MW.  -- Vegetation Management. As part of its effort to protect the state from wildfire risk and enhance system reliability, the Company cleared brush, tree limbs and other vegetation from more than 900 miles of transmission line corridors.  -- New Technology Implementation. APS began implementation of its Distributions Operations Management System (DOMS), which is replacing the industry-tried wall maps that have been used to manage the company's distribution system with a series of large- scale monitors. In addition to providing an automated view of the system, DOMS tracks outages in real time, manages electrical loads, and manages the company's construction and repair crews. Lastly, APS received the electric utility industry's highest honor for developing a landmark system that monitors major transformers in near-real-time. The Transformer Oil Analysis and Notification (TOAN) system allows APS to automatically monitor transformer oil data, receive notification of abnormalities nearly in real time, and take necessary preventive actions. The net result is that catastrophic transformer fires may one day be a thing of the past - resulting in fewer customer outages and greater reliability. 

APS, Arizona’s largest and longest-serving electricity utility, serves about 1.1 million customers in 11 of the state’s 15 counties. In 2008, APS won its second Edison Award in recognition of innovative leadership and operational excellence in the electric industry. Given annually by the Edison Electric Institute, the Edison Award is considered the industry’s most prestigious honor. With headquarters in Phoenix, APS is the principal subsidiary of Pinnacle West Capital Corp. (NYSE: PNW)

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