APS 2015 Annual Report Download - page 30

Table of Contents
WHERE TO FIND MORE INFORMATION
We use our website (www.pinnaclewest.com) as a channel of distribution for material Company information. The following
filings are available free of charge on our website as soon as reasonably practicable after they are electronically filed with, or furnished
to, the Securities and Exchange Commission (“SEC”): Annual Reports on Form 10-K, definitive proxy statements for our annual
shareholder meetings, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports. Our board
and committee charters, Code of Ethics for Financial Executives, Code of Ethics and Business Practices and other corporate governance
information is also available on the Pinnacle West website. Pinnacle West will post any amendments to the Code of Ethics for Financial
Executives and Code of Ethics and Business Practices, and any waivers that are required to be disclosed by the rules of either the SEC
or the New York Stock Exchange, on its website. The information on Pinnacle West’s website is not incorporated by reference into this
report.
You can request a copy of these documents, excluding exhibits, by contacting Pinnacle West at the following address: Pinnacle
West Capital Corporation, Office of the Corporate Secretary, Mail Station 8602, P.O. Box 53999, Phoenix, Arizona 85072-3999
(telephone [phone]).
ITEM 1A. RISK FACTORS
In addition to the factors affecting specific business operations identified in the description of these operations contained
elsewhere in this report, set forth below are risks and uncertainties that could affect our financial results. Unless otherwise indicated or
the context otherwise requires, the following risks and uncertainties apply to Pinnacle West and its subsidiaries, including APS.
REGULATORY RISKS
Our financial condition depends upon APS’s ability to recover costs in a timely manner from customers through regulated rates and
otherwise execute its business strategy.
APS is subject to comprehensive regulation by several federal, state and local regulatory agencies that significantly influence its
business, liquidity, results of operations and its ability to fully recover costs from utility customers in a timely manner. The ACC
regulates APS’s retail electric rates and FERC regulates rates for wholesale power sales and transmission services. The profitability of
APS is affected by the rates it may charge and the timeliness of recovering costs incurred through its rates. Consequently, our financial
condition and results of operations are dependent upon the satisfactory resolution of any APS rate proceedings and ancillary matters
which may come before the ACC and FERC, including in some cases how court challenges to these regulatory decisions are resolved.
Arizona, like certain other states, has a statute that allows the ACC to reopen prior decisions and modify otherwise final orders under
certain circumstances.
APS is currently pursuing certain activities, such as microgrid investments and construction of renewable facilities intended for
specific customers. To date, APS has not received regulatory assurance of cost recovery for such investments. As APS engages in these
activities, we will have to demonstrate to regulators that these investments are both prudent and useful in providing electric service to
customers.
The ACC must also approve APS’s issuance of securities and any significant transfer or encumbrance of APS property used to
provide retail electric service, and must approve or receive prior notification of certain transactions between us, APS and our respective
affiliates. Decisions made by the ACC or FERC could have a material adverse impact on our financial condition, results of operations
or cash flows.
27