APS 2013 Annual Report Download - page 21

Table of Contents
the United States Supreme Court to reverse all or part of the appeals court’s decision upholding EPA’s GHG rules. On October 15, 2013, the Supreme Court
granted these petitions limiting the question it would review to whether EPA permissibly determined that its regulation of GHG emissions from new motor
vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit such gasses, including power plants. The Court is expected
to issue its decision in the case no later than mid-2014.
APS does not expect that any resulting Supreme Court decision or the tailoring rule will have a significant impact on its current operations. The
rule will require APS to consider the impact of GHG emissions as part of its traditional NSR analysis for new sources and major modifications to existing
plants.
On June 25, 2013, President Obama unveiled his Climate Action Plan addressing his plans to reduce GHG emissions in the United States. While
the plan identifies a wide range of strategies for cutting GHG emissions, most important to APS and the electric utility industry is the implementation of carbon
pollution standards for new, modified, and existing fossil-fired electric generating units. Concurrent with the President’s speech, the White House issued a
Presidential Memorandum directing EPA to use its existing authorities under the Clean Air Act to develop GHG emission standards for new, modified, and
existing power plants. The Presidential Memorandum directs EPA to propose GHG emission standards for modified and existing units by June 1, 2014 and to
finalize them by June 1, 2015. The memorandum further directed EPA to reissue proposed standards of performance for new power plants by September 20,
2013 and to finalize them in a timely fashion.
Consistent with President Obama’s June 2013 directive, pursuant to its authority under the Clean Air Act and its endangerment finding, on
September 20, 2013, EPA issued a proposed rule, which would establish New Source Performance Standards (“NSPS”) for new fossil-fired power plants.
Once finalized, APS does not expect that the GHG NSPS will have any material impact on its current operations. EPA indicated in its proposal that the
rule will not apply to modified or reconstructed electric generating units, which are to be addressed in a subsequent rulemaking. We cannot currently predict
the shape of any final rules or standards for existing fossil-fired power plants or assess how they might potentially impact the company. APS will continue to
monitor these standards as they are developed.
Company Response to Climate Change Initiatives . We have undertaken a number of initiatives to address emission concerns, including
renewable energy procurement and development, promotion of programs and rates that promote energy conservation, renewable energy use, and energy
efficiency. (See “Energy Sources and Resource Planning — Current and Future Resources” above for details of these plans and initiatives.) APS currently
has a diverse portfolio of renewable resources, including solar, wind, geothermal, biogas, and biomass, and we expect the percentage of renewable energy in
our resource portfolio to increase over the coming years.
APS prepares an inventory of GHG emissions from its operations. This inventory is reported to EPA under the EPA GHG Reporting Program and is
voluntarily communicated to the public in Pinnacle West’s annual Corporate Responsibility Report, which is available on our website
(www.pinnaclewest.com). The report provides information related to the Company and its approach to sustainability and its workplace and environmental
performance. The information on Pinnacle West’s website, including the Corporate Responsibility Report, is not incorporated by reference into this report.
18