APS 2013 Annual Report Download - page 26

Table of Contents
Mexico against APS and the other Four Corners participants alleging violations of the NSR provisions of the Clean Air Act. Subsequent to filing its original
complaint, on January 6, 2012, Earthjustice filed an amended complaint adding claims for violations of the Clean Air Act’s NSPS program. Among other
things, the environmental plaintiffs seek to have the court enjoin operations at Four Corners until APS applies for and obtains any required NSR permits and
complies with the NSPS. The plaintiffs further request the court to order the payment of civil penalties, including a beneficial mitigation project. On April 2,
2012, APS and the other Four Corners participants filed motions to dismiss. The case is being held in abeyance while the parties seek to negotiate a
settlement. On March 30, 2013, upon joint motion of the parties, the court issued an order deeming the motions to dismiss withdrawn without prejudice
during pendency of the stay. At such time as the stay is lifted, APS and the other Four Corners participants may reinstate their motions to dismiss. We are
unable to determine a range of potential losses that are reasonably possible of occurring.
Superfund-Related Matters. The Comprehensive Environmental Response, Compensation and Liability Act (“Superfund”) establishes liability
for the cleanup of hazardous substances found contaminating the soil, water or air. Those who generated, transported or disposed of hazardous substances at
a contaminated site are among those who are potentially responsible parties (“PRPs”). PRPs may be strictly, and often are jointly and severally, liable for
clean-up. On September 3, 2003, EPA advised APS that EPA considers APS to be a PRP in the Motorola 52 Street Superfund Site, Operable Unit 3 (“OU3”)
in Phoenix, Arizona. APS has facilities that are within this Superfund site. APS and Pinnacle West have agreed with EPA to perform certain investigative
activities of the APS facilities within OU3. In addition, on September 23, 2009, APS agreed with EPA and one other PRP to voluntarily assist with the
funding and management of the site-wide groundwater remedial investigation and feasibility study work plan. We estimate that our costs related to this
investigation and study will be approximately $2 million. We anticipate incurring additional expenditures in the future, but because the overall investigation is
not complete and ultimate remediation requirements are not yet finalized, at the present time expenditures related to this matter cannot be reasonably estimated.
On August 6, 2013, the Roosevelt Irrigation District (“RID”) filed a lawsuit in Arizona District Court against APS and 24 other defendants, alleging
that RID’s groundwater wells were contaminated by the release of hazardous substances from facilities owned or operated by the defendants. The lawsuit also
alleges that, under Superfund laws, the defendants are jointly and severally liable to RID. The allegations against APS arise out of APS’s current and former
ownership of facilities in and around OU3. We are unable to determine a range of potential losses that are reasonably possible of occurring.
Manufactured Gas Plant Sites. Certain properties which APS now owns or which were previously owned by it or its corporate predecessors were
at one time sites of, or sites associated with, manufactured gas plants. APS is taking action to voluntarily remediate these sites. APS does not expect these
matters to have a material adverse effect on its financial position, results of operations or cash flows.
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