Document:

Exhibit 10.2

                                 AMENDMENT NO. 3

                         Decommissioning Trust Agreement
                                 (PVNGS Unit 1)

     This Amendment No. 3 dated as of March 18, 2002, to the Decommissioning
Trust Agreement (PVNGS Unit 1), dated as of July 1, 1991, as amended by
Amendment No. 1 thereto dated as of December 1, 1994 and Amendment No. 2 thereto
dated as of December 16, 1996 (the "Decommissioning Trust Agreement", terms used
herein as therein defined), is entered into between Arizona Public Service
Company ("APS") and Mellon Bank, N.A., as Decommissioning Trustee
("Decommissioning Trustee").

                                R E C I T A L S:

     WHEREAS, the parties hereto wish to amend the Agreement.

     NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     SECTION 1. Amendment.

     (a)  The period at the end of clause (iii) in Section 8, paragraph (a) is
          deleted and ";or" is added in its place and the following subparagraph
          (iv) shall be added to Section 8, paragraph (a):

               "(iv) in any property safekept or settled outside of the United
               States".

     (b)  The third and fifth sentences of clause (ii) of Paragraph (c) of
          Section 8 shall be restated as follows;

               Upon proper notification from the Investment Manager(s),
               Decommissioning Trustee shall execute and deliver instruments in
               accordance with the appropriate trading authorizations; provided
               that the Trustee shall not follow any direction that would result
               in assets of the Second Fund being invested in assets other than
               those investments permitted for a qualified nuclear
               decommissioning reserve fund under Section 468A of the Code and
               the regulations thereunder.

               Such notification shall be proper authority for Decommissioning
               Trustee to pay for portfolio securities purchased against receipt
               thereof, and to deliver portfolio securities sold against payment
               therefor, as the case may be.

     (c)  Clause (ii) of Paragraph (d) of Section 8 shall be restated as
          follows:

          (ii) Decommissioning Trustee is required to supervise and review the
               securities and other assets and investments authorized for
               purchase by the Investment Managers(s) within two weeks of the
               end of the calendar month during which such purchase was made to
<PAGE>
               determine that such securities, assets and/or investments are
               Permitted Investments and satisfy the further conditions of this
               Agreement as set out in Exhibit B. Upon the completion of such
               review, the Decommissioning Trustee shall promptly notify APS in
               writing if any securities, assets or investments are not
               Permitted Investments or fail to satisfy such further conditions.

     (d)  The following shall be added to Section 11:

               Notwithstanding the foregoing, if the Decommissioning Trustee
               advances cash or securities for any purpose or in the event that
               the Decommissioning Trustee shall incur or be assessed taxes,
               interest, charges, expenses, assessments, or other liabilities in
               connection with the performance of this Agreement, except such as
               may arise from its own negligent action, negligent failure to act
               or willful misconduct, any property at any time held for the
               Funds or under this Agreement shall be security therefor and the
               Decommissioning Trustee shall be entitled to collect from the
               Funds sufficient cash for reimbursement, and if such cash is
               insufficient, dispose of the assets held under this Agreement to
               the extent necessary to obtain reimbursement. To the extent the
               Decommissioning Trustee advances funds to the Funds for
               disbursements or to effect the settlement of purchase
               transactions, the Decommissioning Trustee shall be entitled to
               collect from the Funds an amount equal to what would have been
               earned on the sums advanced (an amount approximating the "federal
               funds" interest rate).

     (e)  The second sentence of the fourth paragraph of Section 21 shall be
          restated as follows:

               Decommissioning Trustee shall promptly advise APS if it has
               actual knowledge that any of the investments do not constitute
               Permitted Investments or otherwise satisfy the further conditions
               of this Agreement.

     (f)  The first sentence of Section 23 shall be restated as follows:

               Decommissioning Trustee shall not be liable for any acts,
               omissions, or defaults of any agent (other than its officers and
               employees), provided such agent was selected with reasonable care
               and the performance and status of such agent is monitored with
               reasonable care.

     (g)  Clause (b) of the second paragraph of Section 23 shall be restated as
          follows:

               (b) any direct damages and any consequential damages permitted
               under Section 28 arising from the violation of the restrictions
               on the investment of Fund assets under this Agreement 1) where
               the decision to invest Fund assets in such investments was made
               by the Decommissioning Trustee, or 2) if not made by the
               Decommissioning Trustee, such damages could have been prevented
               by the Decommissioning Trustee through the exercise of reasonable
               care in the exercise of its duties hereunder, including but not
               limited to its duties of supervision and review under Section 8
               hereof, and/or
<PAGE>
     (h)  The following Section 28 shall be added:

               Section 28: Notwithstanding anything in this Agreement to the
               contrary, the Decommissioning Trustee shall not be responsible or
               liable for its failure to perform under this Agreement or for any
               losses to the Funds resulting from any event beyond the
               reasonable control of the Decommissioning Trustee, its agents or
               subcustodians, including but not limited to nationalization,
               strikes, expropriation, devaluation, seizure, or similar action
               by any governmental authority, de facto or de jure; or enactment,
               promulgation, imposition or enforcement by any such governmental
               authority of currency restrictions, exchange controls, levies or
               other charges affecting the Funds' property; or the breakdown,
               failure or malfunction of any utilities or telecommunications
               systems; or any order or regulation of any banking or securities
               industry including changes in market rules and market conditions
               affecting the execution or settlement of transactions; or acts of
               war, terrorism, insurrection or revolution; or acts of God; or
               any other similar event. The Decommissioning Trustee shall not be
               liable for any indirect, consequential, or special damages with
               respect to its role as Decommissioning Trustee to the extent such
               damages exceed the Trustee's annual compensation under this
               Agreement for the previous calendar year. This Section shall
               survive the termination of this Agreement.

     (i)  EXHIBIT B to the Decommissioning Trust Agreement is hereby deleted and
          replaced in its entirety by EXHIBIT B hereto.

     SECTION 2. Miscellaneous

          (a)  Full Force and Effect.

     Except as expressly provided herein, the Decommissioning Trust Agreement
shall remain unchanged and in full force and effect. Each reference in the
Decommissioning Trust Agreement and in any exhibit or schedule thereto to `this
Agreement," "hereto," "hereof" and terms of similar import shall be deemed to
refer to the Decommissioning Trust Agreement as amended hereby.

          (b)  Counterparts/Representations.

     The Amendment No. 3 may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Amendment No. 3 by signing any such
counterpart. Each party represents and warrants to the other that it has full
authority to enter into this Amendment upon the terms and conditions hereof and
that the individual executing this Amendment on its behalf has the requisite
authority to bind that Party.
<PAGE>
     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to
the Decommissioning Trust Agreement to be duly executed as of the day and year
first above written.

                                        ARIZONA PUBLIC SERVICE COMPANY

                                        By Barbara M. Gomez
                                           -------------------------------------

                                        Title Treasurer
                                              ----------------------------------

                                        MELLON BANK, N.A. as
                                        Decommissioning Trustee

                                        By Robert F. Sass
                                           -------------------------------------

                                        Title Vice President
                                              ----------------------------------
<PAGE>
STATE OF ARIZONA           )
                           )  ss:
County of Maricopa         )

     The foregoing instrument was acknowledged before me this 20th day of March,
2002, by Barbara M. Gomez, the Treasurer of ARIZONA PUBLIC SERVICE COMPANY, an
Arizona corporation, on behalf of said corporation.

                                        Suzanne W. Debes
                                        ----------------------------------------
                                        Notary Public

My commission expires:

June 20, 2003
----------------------

COMMONWEALTH OF PENNSYLVANIA        )
                                    )  ss:
County of Allegheny                 )

     The foregoing instrument was acknowledged before me this 28th day of March,
2002, by Robert F. Sass, a Vice President of Mellon Bank, N.A. a national
banking association having trust powers, as Decommissioning Trustee, on behalf
of said national banking association.

                                        Julie Ann Mosco
                                        ----------------------------------------
                                        Notary Public

My commission expires:

October 13, 2003
----------------------
<PAGE>
                                    EXHIBIT B
                                     UNIT 1

                          PERMITTED INVESTMENTS FOR THE
                 DECOMMISSIONING TRUST FUND AND THE SECOND FUND

     The Second Fund must meet all applicable requirements of the Code, and
applicable rules and regulations promulgated by the Internal Revenue Service
with respect to a Nuclear Decommissioning Reserve Fund.

     Subject to the foregoing, the Decommissioning Trust Fund and the Second
Fund may invest in any of the following:

SECURITIES

     Except as may be constrained elsewhere in these guidelines, the following
types of taxable or tax-exempt securities are eligible for investment, including
any investment in a common or collective trust fund (including but not limited
to, any such fund maintained by the Decommissioning Trustee or any of its
affiliates, including but not limited to, the Decommissioning Trustee's Nuclear
Decommissioning Trust Equity Index Fund) holding any securities listed in items
1 through 3 below:

     1.   Debt Obligations of

          -    The U.S. Government and its agencies or instrumentalities

          -    States, U.S. possessions, District of Columbia, and any agency or
               political subdivision thereof

          -    Domestic corporations

          -    Municipalities and municipal agencies

     2.   Asset-backed and mortgage-backed securities

     3.   Equities

     4.   FDIC Certificates of Deposit, including but not limited to, those of
          the Decommissioning Trustee or any of its affiliates

     5.   Shares of regulated investment companies, including but not limited
          to, mutual funds, including but not limited to, those for which the
          Decommissioning Trustee performs advisory management or other services
          for a fee
<PAGE>
     6.   Cash equivalent securities, including but not limited to, the
          Decommissioning Trustee's STIF accounts or those of any of its
          affiliates

QUALITY

     1.   Debt obligations other than U.S. Government and agency securities must
          have a rating of at least A by both Moody's Investors Services, Inc.
          ("Moody's") and Standard & Poor's Ratings Group ("S & P") at time of
          purchase. This limitation shall not apply to securities that have been
          pre-refunded where a third party trustee holds direct U.S. Government
          or agency obligations sufficient to pay debt service and the specified
          call price to a specific call or maturity date.

     2.   Commercial paper must be rated at least A-1 by S&P and P-1 by Moody's.

     3.   Certificates of Deposit must be at a bank with a minimum of one
          billion dollars in assets as of such bank's most recent report of
          condition.

DIVERSIFICATION

No investment shall represent more than 10% of the aggregate assets held under
this Decommissioning Trust Agreement, the Unit 2 Trust Agreement, and the Unit 3
Trust Agreement combined, except for:

     1.   Positions in securities issued by the U.S. Government or fully
          government backed securities or instruments fully pre-refunded where a
          third party trustee holds direct U.S. Government or agency obligations
          sufficient to pay debt service and the specified call price to a
          specific call or maturity date.

     2.   Units of a common or collective trust fund.

Equity securities are limited to 60% of the aggregate assets held under this
Decommissioning Trust Agreement, the Unit 2 Trust Agreement, and the Unit 3
Trust Agreement combined.

     Notwithstanding the foregoing, the following restrictions are placed on the
investment of the assets of the Funds:

     1.   Securities of APS, APS' parent corporation, Pinnacle West Capital
          Corporation, or its affiliates, are not permitted.

     2.   Securities issued by Maricopa County, Arizona Pollution Control
          Corporation in connection with the financing of certain facilities at
          the Palo Verde Nuclear Generation Station are not permitted.
<PAGE>
     3.   Securities issued by or on behalf of any participant in the Palo Verde
          Nuclear Generating Station are not permitted.

     4.   Investments in any bank, savings and loan association, or other
          financial institution whose deposits are not insured by the Federal
          Deposit Insurance Corporation or other comparable federal agency are
          not permitted, except that this restriction does not apply to
          investments in the Decommissioning Trustee's STIF.

     5.   Property that is settled or safekept outside of the United States is
          not permitted.

     6.   The following securities and transactions are explicitly prohibited
          unless engaged in in the ordinary course by a common or collective
          trust fund described under the heading "Securities" above:

          (a)  put and call options on securities, securities indices and
               foreign currencies;

          (b)  financial futures contracts including bond, bond index, foreign
               currency futures contracts and options thereon;

          (c)  spot and forward currency transactions both to effect securities
               transactions and to manage currency;

          (d)  private placements;

          (e)  preferred stock;

          (f)  warrants;

          (g)  margin purchases or borrowing money; and

          (h)  short selling or securities lending.Exhibit 10.3

                                 AMENDMENT NO. 6

                         Decommissioning Trust Agreement
                                 (PVNGS Unit 2)

     This Amendment No. 6 dated as of March 18, 2002, to the Amended and
Restated Decommissioning Trust Agreement (PVNGS Unit 2), dated as of January 31,
1992, as amended by Amendment No. 1 thereto dated as of November 1, 1992,
Amendment No. 2 thereto dated as of November 1, 1994, Amendment No. 3 thereto
dated as of June 20, 1996, Amendment No. 4 thereto dated as of December 16,
1996, and Amendment No. 5 thereto dated as of June 30, 2000 (the
"Decommissioning Trust Agreement", terms used herein as therein defined), is
entered into between Arizona Public Service Company ("APS"), State Street Bank
and Trust Company, as successor to The First National Bank of Boston, as Owner
Trustee and as Lessor, and Mellon Bank, N.A., as Decommissioning Trustee
("Decommissioning Trustee").

                                    RECITALS:

          WHEREAS, the parties hereto wish to amend the Agreement.

     NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     SECTION 1. Amendment.

     (a)  The third and fifth sentences of clause (ii) of Paragraph (c) of
          Section 9 shall be restated as follows;

               Upon proper notification from the Investment Manager(s),
               Decommissioning Trustee shall execute and deliver instruments in
               accordance with the appropriate trading authorizations; provided
               that the Trustee shall not follow any direction that would result
               in assets of the Second Fund being invested in assets other than
               those investments permitted for a qualified nuclear
               decommissioning reserve fund under Section 468A of the Code and
               the regulations thereunder.

               Such notification shall be proper authority for Decommissioning
               Trustee to pay for portfolio securities purchased against receipt
               thereof, and to deliver portfolio securities sold against payment
               therefor, as the case may be.

     (b)  Clause (ii) of Paragraph (d) of Section 9 shall be restated as
          follows:

          (ii) Decommissioning Trustee is required to supervise and review the
               securities and other assets and investments authorized for
               purchase by the Investment Managers(s) within two weeks of the
               end of the calendar month during which such purchase was made to
               determine that such securities, assets and/or investments are
               Permitted Investments and satisfy the further conditions of this
               Agreement as set out in Exhibit B. Upon the completion of such
               review, the Decommissioning Trustee shall promptly notify APS and
               the Secured Parties and Equity Participants in writing if any
<PAGE>
               securities, assets or investments are not Permitted Investments
               or fail to satisfy such further conditions.

     (c)  The second sentence of the fourth paragraph of Section 24 shall be
          restated as follows:

               Within two weeks of the end of each calendar quarter, the
               Decommissioning Trustee shall send a written statement to APS and
               the Secured Parties and Equity Participants indicating whether
               during that previous quarter such securities, assets and/or
               investments held in the Funds during that quarter were Permitted
               Investments and satisfied the further conditions of this
               Agreement; provided however, the Decommissioning Trustee shall
               promptly advise APS and the Secured Parties and Equity
               Participants if it has actual knowledge that any of the
               investments do not constitute Permitted Investments or otherwise
               satisfy the further conditions of this Agreement.

     (d)  The words "any such consequences" shall be added after the words "as
          provided in this Agreement or" and before the words "could have been
          prevented" in clause (b) of the first sentence of the second paragraph
          of Section 26.

     (e)  The following Section 33 shall be added:

               Section 33: Notwithstanding anything in this Agreement to the
               contrary, the Decommissioning Trustee shall not be responsible or
               liable for its failure to perform under this Agreement or for any
               losses to the Funds resulting from any event beyond the
               reasonable control of the Decommissioning Trustee, its agents or
               subcustodians, including but not limited to nationalization,
               strikes, expropriation, devaluation, seizure, or similar action
               by any governmental authority, de facto or de jure; or enactment,
               promulgation, imposition or enforcement by any such governmental
               authority of currency restrictions, exchange controls, levies or
               other charges affecting the Funds' property; or the breakdown,
               failure or malfunction of any utilities or telecommunications
               systems; or any order or regulation of any banking or securities
               industry including changes in market rules and market conditions
               affecting the execution or settlement of transactions; or acts of
               war, terrorism, insurrection or revolution; or acts of God; or
               any other similar event. The Decommissioning Trustee shall not be
               liable for any indirect, consequential, or special damages with
               respect to its role as Decommissioning Trustee to the extent such
               damages exceed the Trustee's annual compensation under this
               Agreement for the previous calendar year. This Section shall
               survive the termination of this Agreement.

     (f)  EXHIBIT B to the Decommissioning Trust Agreement is hereby deleted and
          replaced in its entirety by EXHIBIT B hereto.
<PAGE>
     SECTION 2. Miscellaneous

     (a)  Full Force and Effect.

     Except as expressly provided herein, the Decommissioning Trust Agreement
shall remain unchanged and in full force and effect. Each reference in the
Decommissioning Trust Agreement and in any exhibit or schedule thereto to "this
Agreement," "hereto," "hereof" and terms of similar import shall be deemed to
refer to the Decommissioning Trust Agreement as amended hereby.

     (b)  Counterparts/Representations.

     The Amendment No. 6 may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Amendment No. 6 by signing any such
counterpart. Each party represents and warrants to the other that it has full
authority to enter into this Amendment upon the terms and conditions hereof and
that the individual executing this Amendment on its behalf has the requisite
authority to bind that Party.

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 6 to
the Decommissioning Trust Agreement to be duly executed as of the day and year
first above written.

                                        ARIZONA PUBLIC SERVICE COMPANY

                                        By Barbara M. Gomez
                                           -------------------------------------

                                        Title Treasurer
                                              ----------------------------------
<PAGE>
                                        MELLON BANK, N.A. as
                                        Decommissioning Trustee

                                        By Robert F. Sass
                                           -------------------------------------

                                        Title Vice President
                                              ----------------------------------

                                        STATE STREET BANK AND TRUST COMPANY, as
                                        Owner Trustee under a Trust Agreement
                                        with Security Pacific Capital Leasing
                                        Corporation and as Lessor under a
                                        Facility Lease with Arizona Public
                                        Service Company

                                        By Kenneth R. Ring
                                           -------------------------------------

                                        Title Assistant Vice President
                                              ----------------------------------

                                        STATE STREET BANK AND TRUST COMPANY, as
                                        Owner Trustee under a Trust Agreement
                                        with Emerson Finance Co. and as Lessor
                                        under a Facility Lease with Arizona
                                        Public Service Company

                                        By Kenneth R. Ring
                                           -------------------------------------

                                        Title Assistant Vice President
                                              ----------------------------------
<PAGE>
STATE OF ARIZONA                  )
                                  )  ss:
County of Maricopa                )

     The foregoing instrument was acknowledged before me this 20th day of March,
2002, by Barbara M. Gomez, the Treasurer of ARIZONA PUBLIC SERVICE COMPANY, an
Arizona corporation, on behalf of said corporation.

                                        Suzanne W. Debes
                                        ----------------------------------------
                                        Notary Public

My commission expires:

June 20, 2003
----------------------

COMMONWEALTH OF PENNSYLVANIA       )
                                   ) ss:
County of Allegheny                )

     The foregoing instrument was acknowledged before me this 28th day of March,
2002, by Robert F. Sass, a Vice President of Mellon Bank, N.A. a national
banking association having trust powers, as Decommissioning Trustee, on behalf
of said national banking association.

                                        Julie Ann Mosco
                                        ----------------------------------------
                                        Notary Public

My commission expires:

October 13, 2003
----------------------
<PAGE>
COMMONWEALTH OF MASSACHUSETTS      )
                                   ) ss:
County of Suffolk                  )

     The foregoing instrument was acknowledged before me this 18th day of March,
2002, by Kenneth R. Ring, an Assistant Vice President of State Street Bank and
Trust Company, a Massachusetts trust company, in its capacity as Owner Trustee
under a Trust Agreement with Security Pacific Capital Leasing Corporation and as
Lessor under a Facility Lease with Arizona Public Service Company, on behalf of
said association in such capacities.

                                        James M. Coolidge
                                        ----------------------------------------
                                        Notary Public

My commission expires:

June 19, 2003
----------------------

COMMONWEALTH OF MASSACHUSETTS      )
                                   ) ss:
County of Suffolk                  )

     The foregoing instrument was acknowledged before me this 18th day of March,
2002, by Kenneth R. Ring, an Assistant Vice President of State Street Bank and
Trust Company, a Massachusetts trust company, in its capacity as Owner Trustee
under a Trust Agreement with Emerson Finance Company and as Lessor under a
Facility Lease with Arizona Public Service Company, on behalf of said
association in such capacities.

                                        James M. Coolidge
                                        ----------------------------------------
                                        Notary Public

My commission expires:

June 19, 2003
----------------------
<PAGE>
                                    EXHIBIT B
                                     UNIT 2

                          PERMITTED INVESTMENTS FOR THE
                 DECOMMISSIONING TRUST FUND AND THE SECOND FUND

     The Second Fund must meet all applicable requirements of the Code, and
applicable rules and regulations promulgated by the Internal Revenue Service
with respect to a Nuclear Decommissioning Reserve Fund.

     Subject to the foregoing, the Decommissioning Trust Fund and the Second
Fund may invest in any of the following obligations or securities maturing at
such time or times as to enable payments or transfers to be made from the Funds
or which shall be readily marketable prior to the final maturity thereof:

     (a) bills, notes, bonds and savings bonds of the Treasury of the United
States of America;

     (b) obligations of the United States of America not included in clause (a)
taken into consideration for purposes of determining the public debt limit of
the United States of America;

     (c) time or demand deposits in a bank (as defined in Section 581 of the
Code) or an insured credit union (within the meaning of Section 101(6) of the
Federal Credit Union Act, 12 U.S.C. 1752(7) (1982)) (for the purposes of this
paragraph, "time or demand deposits" shall include checking accounts, savings
accounts, certificates of deposit, and other time or demand deposits but shall
not include common or collective trust funds);

     (d) obligations of the Federal National Mortgage Association and Government
National Mortgage Association;

     (e) AAA rated collateralized mortgage obligations; interest only, principal
only, and inverse floaters are specifically prohibited;

     (f) commercial paper maturing within 60 days and rated the highest grade by
Moody's Investor's Services, Inc. ("Moody's") or Standard & Poor's Corporation
("S & P") or if one of such agencies does not rate such paper, rated the highest
grade by the other;

     (g) deposit accounts (which may be represented by certificates of deposit)
payable on demand or maturing within 180 days, in Federally insured national or
state banks; provided, however, if the aggregate amount of such deposit accounts
in a bank is $100,000 or more, such bank shall have combined capital and surplus
as of its last report of condition exceeding $250,000,000 and a senior unsecured
debt rating of Investment Grade;
<PAGE>
     (h) The Decommissioning Trustee's Short Term Investment Fund ("STIF")
account; provided, however, that no more than fifteen percent (15%) of the
aggregate assets of the Funds may be invested in the Decommissioning Trustee's
STIF account at any one time, except that the full amount of APS' quarterly
contribution to the Funds or any portion thereof may be invested in the
Decommissioning Trustee's STIF account for a period of up to seven (7) business
days after such contribution is made and, during such period, the amount of such
contribution or portion thereof that shall have been so invested shall not count
against the fifteen percent (15%) limitation in this paragraph (h):

     (i) repurchase agreements fully secured (and perfected) by any of the
foregoing obligations or securities maturing within 30 days with any Federally
insured national or state bank (including Decommissioning Trustee) or any other
financial institution that is a nationally recognized dealer that reports to the
Market Reports Division of the Federal Reserve Bank of New York; provided,
however, if the aggregate face amount of such repurchase agreements with an
issuer is $1,000,000 or more, the issuer shall have combined capital and surplus
as of its last report of condition exceeding $250,000,000 and a senior unsecured
debt rating of Investment Grade;

     (j) obligations rated Investment Grade of a State, a possession of the
United States of America, the District of Columbia or any political subdivision
of the foregoing, the interest on which is exempt from tax under Section 103(a)
of the Code;

     (k) corporate debt obligations rated Investment Grade; and

     (l) (x) corporate equity securities, including, but not limited to,
investment in units of common or collective trust funds investing in corporate
equity securities; including, but not limited to, the Decommissioning Trustee's
Nuclear Decommissioning Trust Equity Index Fund (the "NDT Equity Index Fund")
and (y) obligations not included in clauses (a) through (k) issued or guaranteed
by a person controlled or supervised by and acting as an instrumentality of the
United States of America pursuant to authority granted by the Congress of the
United States of America, including Federal Intermediate Credit Bank, Banks for
Cooperatives, Federal Land Banks, Federal Home Loan Banks, Federal Home Loan
Mortgage Corporation; provided, that no more than fifty percent (50%) of the
aggregate assets of the Funds may be invested in securities described in (x) and
(y) of this subparagraph (1) during the period from June 27, 1996 through
December 31, 2003, no more than thirty percent (30%) during the period from
January 1, 2004 through December 31, 2006, and no more than fifteen percent
(15%) during the period from January 1, 2007 through January 31, 2010; and
provided further that after January 31, 2010, no investments shall be made in
such securities.

     Notwithstanding the foregoing, the following restrictions are placed on the
investment of the assets of the Funds:

     1. Securities of APS, APS' parent corporation, Pinnacle West Capital
Corporation, or its affiliates, are not permitted.
<PAGE>
     2. Securities issued by Maricopa County, Arizona Pollution Control
Corporation in connection with the financing of certain facilities at the Palo
Verde Nuclear Generation Station are not permitted.

     3. Securities issued by or on behalf of any participant in the Palo Verde
Nuclear Generating Station are not permitted.

     4. Investments in any bank or other financial institution whose deposits
are not insured by the Federal Deposit Insurance Corporation or other comparable
federal agency are not permitted, except that this restriction does not apply to
investments in the Decommissioning Trustee's STIF.

     5. There shall be no short-selling, securities lending, options trading,
financial futures, over-the-counter derivative transactions, or other
specialized investment activity, except as specifically allowed in paragraphs
(a) through (1) hereof, or except as may be effected in the ordinary course of
operation of the Decommissioning Trustee's STIF account or its NDT Equity Index
Fund.

     6. No investment shall be made which would cause the holding of any one
issue (excluding obligations of the United States Government and agencies of or
guaranteed by the United States Government and excluding units of a common or
collective trust fund), to exceed ten percent (10%) of the aggregate assets held
under this Decommissioning Trust Agreement, the Unit 1 Trust Agreement, and the
Unit 3 Trust Agreement, valued at cost.

     7. Bank certificates of deposit must be at banks with a minimum of one
billion ($1,000,000,000) in assets as of such banks' most recent report of
condition.

     8. Short-term taxable and non-taxable debt securities are not permitted
unless such securities have a rating of at least P-1 by Moody's or at least A-1
by S&P.

     9. Long-term taxable and non-taxable debt securities are not permitted
unless such securities have a rating of at least "A" by Moody's or S&P.

     10. No investment shall be made which would cause sixty percent (60%) or
more of the aggregate assets held under this Decommissioning Trust Agreement and
the Unit 1 Trust Agreement and the Unit 3 Trust Agreement to be invested in
equity securities.

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