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media con ac december 31, 2013

aps completes purchase at four corners

Steven Gotfried power plant

602-250-3040 ç

closure of units 1 2 & 3 results in reduced emissions

analyst contact PHOENIX — Arizona Public Service completed on Monday its purchase of Southern

California Edison’s Ownership in Units 4 and 5 of the Four Corners Power Plant near Paul Mountain Farmington, N.M. As part of its plan — originally announced in November 2010— APS has 4 —

602 250 4952ç permanently closed the plant’s older, less efficient Units 1, 2 and 3, and will install

additional emission controls on the remaining cleaner, more efficient units. ii ,i.T___

24 hour media “This is a milestone occasion,” said Don Brandt, APS Chairman, President and Chief

hotline Executive Officer. “We have completed a transaction that will benefit the environment

allow us to continue to support the economy of the Navajo Nation and surrounding

602-250-2277 ç community, and help electric users in the Southwest with an important low-cost generating

resource.” for members of the

news media only. Reflecting on the significance of the transaction, Brandt added, “It is bittersweet because This is a milestone

generations of Four Corners employees have dedicated their careers to running those ~ A

three units to keep the lights on for our customers.” occasion. e ave

completed a

With the closing of the APS-owned Units 1, 2 and 3, capacity at Four Corners is reduced transaction that will

from 2,100 megawatts to 1,540 megawatts, enabling the plant to serve half a million

homes Acquir ng SCE’s 48% interest in the larger Units 4 and 5 will increase APS’s total benefit the

Four Corners capacity from 791 megawatts to 970 megawatts APS now owns 63% of environment, allow

Units 4 and 5, which constitute the plant moving forward

us to continue to

Environmental benefits derived from reduced emissions and more efficient fuel use will support the

increase significantly. Emissions of particulates are expected to decline by 43%, nitrogen

oxides (NOx) by 36%, carbon dioxide (C02) by 30%, mercury by 61% and sulfur dioxide economy of the

(S02) by 24%. Navajo Nation and

On Monday afternoon, Units 1 2 and 3 — which helped ensure a reliable supply of energy surrounding

forAPS customers since 1963 (Units 1 and 2) and 1964 (Unit 3)—were permanently shut Community, and

down in a ceremony for plant employees. Closure of the three older units by Jan. 1 2014, hel electric r

and the installation of selective catalytic reduction equipment on Units 4 and 5 by July 31,

2018, will satisfy Best Available Retrofit Technology (BART) requirements for the plant in the Southwest

issued by the U.S. Environmental Protection Agency in August 2012 with an important,

Decommissioning work, including complete dismantle and removal of the older units and low-cost generating

any associated structures, will begin immediately and is expected to last about three years. resource

Employees with responsibilities operating and maintaining Units 1 2 and 3 now will focus

on decommissioning activities. - Don Brandt, APS

Chairman, President & The final purchase pnce for the Southern California Edison share is approximately $182 Chief Executive Officer

million, which is substantially less than other generation alternatives.

“Our plan for the plant moving forward saves APS customers nearly a half-billion dollars

over other energy sources and maintains a highly reliable, cost-effective source of

electncity generation for APS and other users in the Southwest,” said Mark Schiavoni, APS

Executive Vice President, Operations. “Along with natural gas, nuclear, renewables and

energy efficiency, coal has an important place in our company’s balanced energy portfolio.”

As APS committed when the agreement was announced in 2010, Schiavoni reiterated that

no layoffs are planned at the plant, which employs 434 workers (82% of whom are Native

American). Any required reduction in workforce will come through normal attrition. The Four

Corners Power Plant and supporting mining operations create an estimated $225 million

annual economic impact on the Navajo and New Mexico economies. During the next 30

years their operation could generate more than $6.3 billion in economic value for the

region, at least 70% of which will benefit the Navajo Nation

Also, APS on Monday filed an application with the Arizona Corporation Commission to

recover costs associated with the purchase of SCE a interest in the plant The company’s

2012 rate case settlement includes a provision that allows APS to seek rate relief for those

expenses prior to its next rate case. The filing amounts to a bill impact of about 2 For a

typical APS residential customer, monthly bills would increase from $140 12 to $142 89

APS, Arizona’s largest and longest-serving electricity utility, serves more than 1.1 million

customers in 11 of the state’s 15 counties. With headquarters in Phoenix, APS is the

principal subsidiary of Pinnacle West Capital Corp. lhttp I/www pinnaciewesi com/) (NYSE

PNV1I)

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