APS 2012 Annual Report Download - page 66

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Morgan to Pinnacle Peak 500kV, is currently in-service. The second phase, Delaney to Palo Verde
500kV, is under construction. The third and fourth phases, Delaney to Sun Valley 500kV and Morgan
to Sun Valley 500kV, have been permitted and are in various stages of final design and development.
In total, the projects consist of over 100 miles of new 500kV lines, with many of those miles
constructed as capable of stringing a 230kV line as a second circuit.
APS continues to work with regulators to identify transmission projects necessary to support
renewable energy facilities. Two such projects, which are included in APS’s 2013 transmission plan,
are the Delaney to Palo Verde line and the North Gila to Hassayampa line, both of which are intended
to support the transmission of renewable energy to Phoenix and California.
Plant and Transmission Line Leases and Rights-of-Way on Indian Lands
The Navajo Plant and Four Corners are located on land held under leases from the Navajo
Nation and also under rights-of-way from the federal government. The right-of-way and lease for the
Navajo Plant expire in 2019 and the right-of-way and lease for Four Corners expire in 2016. On
March 7, 2011, the Navajo Nation Council signed a resolution approving a 25-year extension to the
existing Four Corners lease term and providing Navajo Nation consent to renewal of the related rights-
of-way. APS is filing applications for renewal of these rights-of-way with the DOI. Before it may
approve the Four Corners lease extension and issue the renewed rights-of-way, the United States must
complete an analysis under the federal National Environmental Policy Act, the ESA and related
statutes.
Certain portions of the transmission lines that carry power from several of our power plants
are located on Indian lands pursuant to rights-of-way that are effective for specified periods. Some
of these rights-of-way have expired and our renewal applications have not yet been acted upon by
the appropriate Indian tribes or federal agencies. Other rights expire at various times in the future
and renewal action by the applicable tribe or federal agencies will be required at that time. The
majority of our transmission lines residing on Indian lands are on the Navajo Nation. In March
2011, the Navajo Nation provided its consent to renew the rights-of-way for the transmission lines
specified in the lease extension. However, some of our rights-of-way are not covered by the
leases, or are granted by other Indian tribes or federal agencies. In recent negotiations with other
utilities or companies for renewal of similar rights-of-way, certain of the affected Indian tribes
have required payments substantially in excess of amounts that we have paid in the past for such
rights-of-way. The ultimate cost of renewal of the rights-of-way for our transmission lines not
addressed in the lease extension is uncertain. We are monitoring these right-of-way issues and
have had extensive discussions with the respective tribes regarding the rights-of-way. We are
currently unable to predict the outcome of this matter.