Here are 1-2 brief analogies for Pinnacle West Capital (PNW):

• Like the historical AT&T was for phone service, but for electricity in Arizona – a regulated essential utility.
• Think of it as the "Comcast for electricity" in Arizona, delivering essential power as a primary regional provider.

• Electricity Generation: Production of electricity from various sources to meet customer demand.
• Electricity Transmission: High-voltage transfer of electricity from generation facilities to distribution networks.
• Electricity Distribution: Delivery of electricity through local networks to residential, commercial, and industrial customers.

Pinnacle West Capital (symbol: PNW) is a utility holding company whose primary subsidiary is Arizona Public Service (APS), an electric utility serving customers in Arizona. As such, it sells primarily to individuals and businesses within its service territory rather than to a few specific other companies.

The company serves the following categories of customers:

1. Residential Customers: Individuals and families who use electricity for their homes.
2. Commercial Customers: Businesses, offices, retail establishments, and other non-industrial enterprises.
3. Industrial Customers: Large-scale manufacturing facilities, mines, data centers, and other heavy industries that require significant amounts of electricity.

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Theodore N. Geisler, Chairman of the Board, President, and Chief Executive Officer

Theodore N. Geisler assumed the roles of Chairman of the Board, President, and Chief Executive Officer of Pinnacle West Capital Corporation and its subsidiary, Arizona Public Service Company (APS), effective April 1, 2025. He began his career at APS in 2001 and has held positions on the executive team since 2018. His leadership journey at the company includes serving as President of APS, Senior Vice President and Chief Financial Officer, Vice President and Chief Information Officer, General Manager of Transmission and Distribution Operations, and Director of Corporate Strategy.

Andrew Cooper, Senior Vice President and Chief Financial Officer

Andrew Cooper is the Senior Vice President and Chief Financial Officer for Pinnacle West Capital Corporation and its primary subsidiary, Arizona Public Service Company (APS). He joined Pinnacle West in 2020 as Vice President and Treasurer. Before joining Pinnacle West, Cooper served as the Director of Corporate Finance at Consolidated Edison Company of New York. He began his career as an investment banker, spending more than a decade with Barclays, where he served clients in the power and utilities sector.

Elizabeth A. Blankenship, Vice President, Controller, and Chief Accounting Officer

Elizabeth A. Blankenship has served as Vice President, Controller, and Chief Accounting Officer of Pinnacle West since 2019. Prior to this role, she was the General Manager of Accounting Operations of APS and its Director of Accounting Operations from 2014 to 2019. Ms. Blankenship also held accounting positions in the banking and healthcare industries.

Robert E. Smith, Executive Vice President, Chief Legal Officer, and Chief Development Officer

Robert E. Smith was appointed Executive Vice President, Chief Legal Officer, and Chief Development Officer on February 19, 2025, with a planned retirement date of August 1, 2025.

Adam C. Heflin, Executive Vice President and Chief Nuclear Officer

Adam C. Heflin is the Executive Vice President and Chief Nuclear Officer.

The key risks to Pinnacle West Capital (PNW) primarily revolve around its heavily regulated operating environment, the impacts of climate change, and the significant capital expenditures coupled with its debt levels.

1. Regulatory and Compliance Risks: Pinnacle West Capital operates in a highly regulated industry, making its financial condition and operations heavily dependent on decisions from regulatory bodies such as the Arizona Corporation Commission (ACC) and the Federal Energy Regulatory Commission (FERC). Changes in laws, regulations, or their interpretations, particularly concerning rate adjustments, can significantly impact the company's financial results and its ability to recover costs. The fact that ACC commissioners are publicly elected can introduce political uncertainty into regulatory outcomes.
2. Climate Change and Environmental Risks: The company faces substantial risks related to climate volatility and environmental regulations. Prolonged drought, extreme heat, and wildfire risks in Arizona can strain grid capacity, affect operational efficiency, and pose existential threats to utility infrastructure. Furthermore, Pinnacle West Capital is subject to numerous environmental laws and regulations, and its commitment to achieving 100% clean, carbon-free electricity by 2050 requires significant investments and poses compliance challenges. Climate change litigation and efforts to limit greenhouse gas emissions could also lead to increased operational costs and financial liabilities.
3. High Capital Expenditures, Debt Levels, and Economic Uncertainties: Pinnacle West Capital has substantial capital expenditure requirements for maintaining and upgrading its extensive infrastructure, including investments in generation, distribution, and transmission projects to support growth and reliability. These significant investments can strain the company's financial resources and impact profitability. The company also carries a considerable amount of debt, with substantial liabilities compared to its cash and receivables, raising concerns about its balance sheet health and ability to manage these obligations without potential shareholder dilution. Additionally, broader economic uncertainties such as inflation, supply chain disruptions, and volatile capital markets can affect customer growth, demand for electricity, and the company's ability to effectively manage its capital projects and operations.

The clear emerging threat for Pinnacle West Capital (PNW) is the accelerating adoption of Distributed Energy Resources (DERs), primarily rooftop solar and battery storage technology, by its customers.

This trend poses a direct threat to the traditional utility business model in several ways:

• Load Defection and Reduced Electricity Sales: As more residential and commercial customers install rooftop solar and increasingly pair it with battery storage, they generate a significant portion of their own electricity. This reduces their reliance on the utility for power purchases, leading to decreased electricity sales volume for PNW's subsidiary, Arizona Public Service (APS).
• Revenue Erosion and Fixed Cost Recovery Challenges: Utilities like PNW have substantial fixed costs associated with maintaining and upgrading the grid infrastructure (transmission and distribution lines, substations). When sales volumes decline due to DERs, it becomes more challenging to recover these fixed costs through volumetric electricity rates, potentially requiring rate design changes (e.g., higher fixed charges) that can be controversial.
• Changes in Grid Dynamics and Investment Needs: The influx of distributed generation alters the demand profile on the grid, requiring utilities to invest in new technologies and strategies for grid modernization, reliability, and the integration of intermittent renewables, rather than solely focusing on central generation and traditional grid expansion.

This threat is analogous to historical disruptions where new technologies or business models empower consumers to bypass traditional service providers. For example, similar to how Netflix allowed consumers to stream content directly, bypassing Blockbuster's physical stores, or how the iPhone enabled new communication and app ecosystems, challenging traditional mobile phone manufacturers and carriers. In PNW's case, declining costs of solar and batteries, coupled with consumer desire for energy independence or lower bills, are empowering customers to generate their own power, directly impacting the utility's core revenue streams and historical role.

• Total Retail Sales: 85,918,798 MWh
• Average Retail Price: $0.1219 per kWh (12.19 cents/kWh)
• Converting MWh to kWh: 85,918,798 MWh * 1,000 kWh/MWh = 85,918,798,000 kWh
• Addressable Market Size (Retail Electricity): 85,918,798,000 kWh * $0.1219/kWh = approximately $10,473,500,746.22

Pinnacle West Capital (PNW) is expected to experience future revenue growth over the next 2-3 years, driven by several key factors:

1. Customer Growth in Arizona: The company anticipates continued robust customer growth within its Arizona service territory. Customer growth guidance was narrowed to the high end of 2%–2.5% for 2025 and is projected at 1.5%–2.5% for 2026. This expansion is fueled by Arizona's strong economic and population growth, particularly from businesses in high-tech industries and general population expansion.

2. Increased Retail Electricity Sales: Beyond new customer additions, Pinnacle West expects growth in retail electricity sales, excluding the impact of weather. The company projects weather-normalized retail electricity sales growth of 4%–6% for 2025, and 5%–7% annually through 2030. This growth is primarily driven by higher usage from both residential and commercial/industrial customers, with a notable contribution from large load customers, including data centers and semiconductor facilities.

3. Higher Transmission Revenues: Enhanced transmission revenues are a significant contributor to the company's financial outlook. Higher transmission revenues were explicitly cited as a factor in the improved EPS outlook for 2025. Pinnacle West has strategic investments planned for transmission infrastructure, with cumulative investments of $2.6 billion through 2028 and identified projects exceeding $6 billion through 2034, supporting an increasing annual spend.

4. Rate Base Growth and Rate Cases: Revenue growth will also be supported by strategic capital investments in transmission, baseload generation, and infrastructure, targeting 7%–9% annual rate base growth through 2028. Furthermore, the company's 2025 APS rate case application seeks a net revenue increase of $580 million, with new rates anticipated to take effect in the second half of 2026. This regulatory mechanism allows the company to earn a return on its invested capital, ensuring stable revenue generation.

Share Repurchases

• Pinnacle West Capital's net common equity issued/repurchased for 2023 was a repurchase of approximately $4 million.
• In 2022, the net common equity issued/repurchased was a repurchase of approximately $3 million.
• For 2021, the net common equity issued/repurchased was also a repurchase of approximately $3 million.

Share Issuance

• In February 2024, Pinnacle West Capital priced a public offering of 9,774,436 shares of its common stock, with approximate net proceeds of $630.5 million.
• Pinnacle West Capital's net common equity issued/repurchased for 2024 was an issuance of approximately $341 million.

Outbound Investments

• As of September 30, 2025, El Dorado, a wholly-owned subsidiary of Pinnacle West, has funded approximately $20 million of its $25 million investment in the Energy Impact Partners fund.
• In August 2023, Pinnacle West entered into an agreement to sell all its equity interest in its wholly-owned subsidiary Bright Canyon Energy Corporation (BCE) to Ameresco.

Capital Expenditures

• Pinnacle West has an ambitious capital expenditure plan of $10.35 billion for 2025-2028, with annual investments projected to increase from $2.40 billion in 2025 to $2.70 billion in 2028.
• APS plans to invest more than $2.5 billion annually through 2028 for infrastructure additions and upgrades, including a proposed natural gas power plant near Gila Bend, Arizona, capable of adding up to 2,000 MW of generation.
• The primary focus of these capital expenditures is on generation, transmission, and distribution investments to meet growing demand in Arizona, as well as continued clean energy initiatives, including renewable energy and energy storage systems.