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Pinnacle West Capital is essentially the Verizon or AT&T of electricity for Arizona residents.

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• Electricity Generation: Producing electricity using various fuel sources such as coal, nuclear, gas, oil, and solar.
• Electricity Transmission: Operating infrastructure to transport high-voltage electricity from generation sources to distribution networks.
• Electricity Distribution: Managing the network of lines and cables that deliver electricity from substations to end-use customers.
• Retail Electric Sales: Providing generated and transmitted electricity directly to approximately 1.3 million residential and commercial customers.
• Wholesale Electric Sales: Selling bulk electricity to other utilities or large industrial consumers.

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Pinnacle West Capital (PNW), through its subsidiary Arizona Public Service Company (APS), operates as a regulated electric utility primarily serving a broad base of electricity consumers in Arizona. The company sells electricity directly to a large number of end-users rather than to a few major corporate customers.

The company serves the following categories of customers:

• Residential Customers: Individual households, apartment complexes, and other domestic users for their electricity needs.
• Commercial Customers: Various businesses, including offices, retail establishments, restaurants, and other small to medium-sized enterprises.
• Industrial Customers: Large-scale operations such as manufacturing plants, mining facilities, data centers, and other industrial enterprises 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 Arizona Public Service (APS) effective April 1, 2025. He joined APS in 2001 and has held executive team positions since 2018, including nearly three years as President of APS (May 2022–April 2025) and Chief Financial Officer (2020–2022). His diverse leadership experience includes roles as Chief Information Officer, General Manager of Transmission and Distribution Operations, and Director of Corporate Strategy. Geisler is a third-generation Arizonan and is actively involved in the community, serving as Chairman of the Board of the Arizona Chamber of Commerce and on the boards of the Greater Phoenix Economic Council and Greater Phoenix Leadership. He holds a Bachelor of Science degree from Colorado State University and an MBA from Arizona State University, and is a graduate of the Nuclear Reactor Technology Course at the Massachusetts Institute of Technology and the Strategic Financial Leadership Program at Stanford University’s Graduate School of Business.

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 is responsible for the organization's accounting, corporate treasury, financial planning and budgeting, internal audit, investor relations, pension and trust investments, and tax services. Before joining Pinnacle West in 2020, Cooper served as director of corporate finance at Consolidated Edison Company of New York. He began his career as an investment banker, with more than a decade at Barclays, where he served clients in the power and utilities sector. Cooper earned a Bachelor of Arts degree in government with a citation in Spanish from Harvard College and a law degree from Harvard Law School, and is admitted to the New York Bar. He is also a graduate of the Nuclear Reactor Technology Course at the Massachusetts Institute of Technology.

Shirley A. Baum Senior Vice President, General Counsel and Corporate Secretary

Shirley A. Baum was promoted to Senior Vice President and General Counsel on February 19, 2025. She also serves as Corporate Secretary for Pinnacle West Capital Corporation and Arizona Public Service Company.

Elizabeth “Beth” Blankenship Vice President, Controller and Chief Accounting Officer

Elizabeth “Beth” Blankenship is the Vice President, Controller, and Chief Accounting Officer for Pinnacle West Capital Corporation and Arizona Public Service Company.

Chris Bauer Vice President and Treasurer

Chris Bauer serves as the Vice President and Treasurer for Pinnacle West Capital Corporation and Arizona Public Service Company.

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Key Risks to Pinnacle West Capital (PNW)

1. Regulatory Risks: As a regulated electric utility in Arizona, Pinnacle West Capital Corporation (PNW), through its subsidiary Arizona Public Service Company (APS), faces significant regulatory risks. These include uncertainties related to changes in regulatory policies by the Arizona Corporation Commission (ACC), the potential for adverse judicial decisions, and "regulatory lag" in rate cases, which can delay the company's ability to recover costs and earn a reasonable return on its investments. Historical and ongoing tensions with the ACC regarding rate increases and clean energy standards further underscore this risk, with past instances of prudency disallowances and penalties. There have also been concerns raised about the stability of the regulatory environment and potential challenges to APS's monopoly status.
2. High Capital Intensity and Cost Recovery Amidst Energy Transition and Demand Growth: The utility industry requires substantial ongoing investments in infrastructure. PNW has significant capital requirements for maintaining and upgrading its generation, transmission, and distribution facilities, including substantial investments in clean energy sources and grid modernization to meet environmental standards and increasing demand. A key risk is the ability to timely recover these high capital expenditures through approved rate mechanisms, particularly in the face of regulatory lag and pushback on rate hikes. Additionally, the rapid growth of energy-intensive data centers in Arizona is driving a sharp rise in peak electricity demand, posing challenges regarding who will bear the costs of necessary infrastructure expansion to serve these large industrial loads. The transition from traditional fossil fuels to renewable energy also necessitates investments in backup generating capacity, which can further strain financial resources and potentially lead to higher costs for ratepayers.
3. Climate-Related and Operational Risks: Pinnacle West operates in Arizona, a state increasingly susceptible to climate threats such as extreme heat, drought, and wildfires. Extreme heat drives up electricity demand, straining the grid and generation equipment, while increased wildfire risk poses significant financial liability and threats to service reliability. The company also faces inherent operational risks, including the constant threat of cybersecurity attacks and data breaches that could disrupt operations and compromise customer data. Physical assets are vulnerable to catastrophic events like severe storms, pandemics, or other unforeseen occurrences.

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Distributed Generation and Storage: The increasing adoption of customer-sited renewable energy generation, primarily rooftop solar, combined with rapidly decreasing costs of battery storage, poses a clear threat. As customers generate and store more of their own electricity, their reliance on the utility's traditional centralized generation and grid services diminishes. This trend can reduce electricity sales volume, impact the utility's ability to recover fixed infrastructure costs, and potentially lead to "grid defection" for some customers, challenging the utility's traditional revenue model and its role as the primary energy provider.

Accelerated Decarbonization and Transition to Renewables: Growing environmental concerns, regulatory pressure, and rapidly falling costs of utility-scale renewable energy (solar, wind) and advanced energy storage solutions represent a threat to utilities with significant investments in traditional fossil fuel generation (coal, natural gas) or nuclear power. This can lead to the premature retirement of existing assets, creating stranded asset risk and requiring substantial capital investment to transition to a cleaner energy portfolio, which may not always be easily recoverable through regulated rates, especially if the pace of change outstrips regulatory adaptation.

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Pinnacle West Capital Corporation (PNW), through its subsidiary Arizona Public Service Company (APS), primarily provides retail and wholesale electric services in the state of Arizona. The addressable market for their main product, electricity services, can be estimated based on the total retail electricity sales within Arizona.

The addressable market size for electricity services in Arizona is approximately $11.57 billion annually. This figure is derived from the total retail sales of electricity in Arizona, which were 90,843,288 megawatthours (MWh) in 2024, and the average retail price of electricity in Arizona, which was 12.74 cents per kilowatt-hour (kWh) in the same year.

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1. Customer Growth: Arizona, Pinnacle West Capital's primary service territory, is experiencing significant population and economic expansion, leading to a consistent increase in its customer base. Arizona Public Service (APS), a subsidiary of Pinnacle West, reported a 2.4% retail customer growth in 2025 and anticipates average annual growth in the range of 1.5% to 2.5% through 2027. This sustained influx of new residents and businesses directly contributes to higher electricity sales.
2. Increased Energy Demand from Commercial and Industrial Customers: Beyond general customer growth, there is a substantial increase in energy consumption, particularly from commercial and industrial (C&I) customers. This surge is driven by new large manufacturing facilities, such as semiconductor plants (e.g., TSMC's expanded investments in Arizona), and the proliferation of energy-intensive data centers. These extra high-load factor customers are expected to contribute 3% to 5% of the company's weather-normalized sales growth in 2026, with long-term sales growth guidance of 5% to 7% through 2030.
3. Rate Cases and Price Adjustments: Pinnacle West (through APS) regularly undertakes rate cases to adjust its pricing. A significant rate case is in progress and is anticipated to conclude in late 2026. This is expected to materially increase revenues by resetting rates to account for inflation, capital investments, and other operational factors. These rate adjustments are crucial for the company to recover costs and earn a regulated return on its investments.
4. Capital Investments and Infrastructure Expansion: The company is making substantial capital investments to expand and modernize its generation, transmission, and distribution infrastructure. Pinnacle West has a capital investment plan totaling approximately $2.6 billion for 2026, and anticipates rate base growth of 7% to 9% through 2028. These investments are necessary to meet the growing energy demand and enhance reliability. As a regulated utility, a larger rate base allows the company to earn a return on these assets, thereby driving future revenue growth.

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Share Repurchases

• Pinnacle West Capital had net common equity repurchases of approximately $3 million in 2022 and $4 million in 2023.

Share Issuance

• Net common equity issued amounted to $0.341 billion in 2024 and $0.338 billion for the twelve months ending September 30, 2025.
• The company plans to fund its 2026-2028 capital program with $1.0-$1.2 billion in parent company equity, having already priced approximately 75% of its 2026 equity needs, equating to $485 million of the planned $650 million.
• Common shares outstanding increased by 0.2% in 2022, 0.34% in 2023, 2.13% in 2024, and 4.13% for the twelve months ending September 30, 2025.

Outbound Investments

• Pinnacle West's subsidiary, El Dorado, committed $25 million to the Energy Impact Partners fund, with approximately $20 million funded as of December 31, 2025.
• El Dorado also committed $25 million to AZ-VC, a fund primarily focused on privately-held early-stage and emerging growth technology companies in Arizona, with approximately $16 million funded by December 31, 2025.
• Other investments include a minority ownership position in the 250 MW Nobles 2 wind farm and an equity investment in SAI, a private corporation manufacturing electrical switchgear equipment for data centers.

Capital Expenditures

• Pinnacle West has outlined a capital plan totaling approximately $10.35 billion for 2025-2028, with annual spending projected to rise from $2.40 billion in 2025 to $2.70 billion by 2028.
• The capital investment plan for 2026 is approximately $2.6 billion.
• These capital expenditures are primarily focused on new gas generation, expanded transmission, distribution upgrades, and additional Palo Verde nuclear investments to support rising demand, maintain grid reliability, and enhance grid resiliency.