Document:

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                                                                Exhibit 4.21

      UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO PINNACLE WEST
CAPITAL CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                        PINNACLE WEST CAPITAL CORPORATION

                       Floating Rate Senior Note due 2005

No. 1                                                  $165,000,000
                                                       CUSIP No. 723484 AF 8

      Pinnacle West Capital Corporation, a corporation duly organized and
existing under the laws of Arizona (herein called the "Company" which term
includes any successor person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to Cede & Co., as nominee of The
Depository Trust Company, or registered assigns, the principal sum of One
Hundred Sixty-Five Million Dollars on November 1, 2005 (the "Maturity Date"),
and to pay interest at the rate set forth below on the outstanding principal
amount hereof from time to time from and including November 12, 2003 or from the
most recent Interest Payment Date (as defined below) to which interest has been
paid or duly provided for, quarterly in arrears on February 1, May 1, August 1
and November 1 in each year, commencing February 1, 2004, and on the Maturity
Date (each, an "Interest Payment Date"), until the principal hereof is paid or
made available for payment and at the same per annum rate set forth below on any
overdue principal and premium and on any overdue installment of interest. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date shall, as provided herein, be paid to the person in whose name this
Note (or one or more predecessor Notes) is registered at the close of business
on the fifteenth calendar day preceding each Interest Payment Date, (each a
"Regular Record Date"); PROVIDED, HOWEVER, that interest payable on the Maturity
Date, or any redemption date, shall be payable to the person to whom the
principal amount of this Note is payable. Any interest payable on any Interest
Payment Date other than the Maturity Date and not so punctually paid or duly
provided for shall forthwith cease to be payable to the person in whose name
this Note is registered at the close of business on such Regular Record Date and
shall instead be payable to the person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on a special record
date for the payment of such interest to be fixed by the Trustee hereinafter
referred to, notice whereof shall be given to the registered holder of this Note
(or one or more predecessor Notes) not less than ten days prior to such special
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this Note
may be listed and upon such notice as may be required by such exchange, as more
fully provided in the Indenture. Principal of this Note shall be payable against
surrender hereof at the corporate trust office of the Trustee or at such other
office or agency of the Company as may be designated by it for such purpose in
the Borough of Manhattan, The City of New York.

      "Business Day" means any day other than a Saturday or a Sunday or a day on
which banking institutions in The City of New York are authorized or required by
law or executive order to remain closed or a day on which the corporate trust
office of the Trustee is closed for business.

      "Calculation Agent" means The Bank of New York or its successor appointed
by the Company, acting as calculation agent.

      "Interest Determination Date" means the second London Business Day
immediately

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preceding the first day of the relevant Interest Period.

      "Interest Period" means the period commencing on an Interest Payment Date
for this Note (or commencing on the issue date for this Note, if no interest has
been paid or duly made available for payment since that date) and ending on the
day before the next succeeding Interest Payment Date for this Note.

      "LIBOR" for any Interest Determination Date will be the London interbank
offered rate for deposits in U.S. dollars having an index maturity of three
months for a period commencing on the second London Business Day immediately
following such Interest Determination Date (the "Three Month Deposits") in
amounts of not less than $1,000,000, as such rate appears on Telerate Page 3750,
at approximately 11:00 a.m., London time, on such Interest Determination Date.

      "London Business Day" means a day on which dealings in deposits in U.S.
dollars are transacted, or with respect to any future date, are expected to be
transacted, in the London interbank market.

      "Telerate Page 3750" means the display designated on page "3750" on
Moneyline Telerate (or such other page as may replace the 3750 page on that
service or such other service or services as may be nominated by the British
Bankers' Association for the purpose of displaying London interbank offered
rates for U.S. dollar deposits).

      Payment of the principal of and any interest on this Note will be made at
the corporate trust office of the Trustee or at such other office or agency of
the Company as may be designated by it for such purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that, at the option of the Company payment of
interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the register for the Notes.

      If any Interest Payment Date falls on a day that is not a Business Day,
the Interest Payment Date will be the next succeeding Business Day (without any
interest or other payment in respect of such delay). If the maturity date of the
Notes or any redemption date falls on a day that is not a Business Day, the
payment of principal and interest (to the extent payable with respect to the
principal amount being redeemed if on a redemption date) will be made on the
next succeeding Business Day, and no interest on such payment shall accrue for
the period from and after the maturity date or such redemption date.

      Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

      Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Note shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.

                                       2
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      IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

                                        PINNACLE WEST CAPITAL CORPORATION

                                        By   /s/ Nancy C. Loftin
                                           -------------------------------------
                                                Vice President

Attest:

          /s/ Betsy A. Pregulman
---------------------------------------------
             Associate Secretary

      This Note is one of a duly authorized issue of securities of the Company
(herein called the "Notes"), issued and to be issued in one or more series under
an Indenture, dated as of December 1, 2000, as amended and supplemented from
time to time (herein called the "Indenture", which term shall have the meaning
assigned to it in such instrument), between the Company and The Bank of New
York, as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), and reference is hereby made to the Indenture for
a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the holders of the Notes
and of the terms upon which the Notes are, and are to be, authenticated and
delivered. This Note is one of the series designated on the face hereof, limited
in aggregate principal amount to $165,000,000, subject to increase as provided
in Section 101 of the Second Supplemental Indenture, dated as of November 1,
2003, providing for the Notes.

      The Notes are not redeemable prior to November 1, 2004. The Notes will be
redeemable at the Company's option in whole, on not less than 30 days' nor more
than 60 days' notice, beginning on November 1, 2004 and on each Interest Payment
Date thereafter, prior to maturity of the Notes, at a redemption price equal to
100% of the principal amount thereof plus accrued and unpaid interest thereon to
the date of redemption.

      If notice has been given as provided in the Indenture and funds for the
redemption of Notes shall have been made available on the redemption date
referred to in such notice, the Notes will cease to bear interest on the date
fixed for such redemption specified in such notice and the only right of the
holders of the Notes will be to receive payment of the redemption price.

                                       3
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      The Company will mail notice of the redemption, first-class mail postage
prepaid, to each holder of Notes at the holder's address in the register for the
Notes. Notice to the holders will be given at least 30 but not more than 60 days
before the redemption date. Notes to be redeemed become due on the redemption
date, and interest will cease to accrue on the Notes on the redemption date.

      The Notes will not be subject to any sinking fund.

      The Notes will bear interest for each Interest Period at a per annum rate
determined by the Calculation Agent as described below (the "Rate of Interest").
The per annum interest rate will be equal to LIBOR on the relevant Interest
Determination Date plus 0.80%; PROVIDED, HOWEVER, that in certain circumstances
described below, the interest rate will be determined by the Calculation Agent
in an alternative manner without reference to LIBOR. Promptly upon such
determination, the Calculation Agent will notify the Trustee of the interest
rate for the new Interest Period. The interest rate determined by the
Calculation Agent, absent manifest error, shall be binding and conclusive upon
the beneficial owners and holders of the Notes, the Company and the Trustee.

      If the following circumstances exist on any Interest Determination Date,
the Calculation Agent shall determine the interest rate for the Notes as
follows:

            (1) In the event LIBOR cannot be determined from the Moneyline
      Telerate service as described herein as of approximately 11:00 a.m. London
      time on such Interest Determination Date, the Calculation Agent shall
      request the principal London offices of each of four major banks in the
      London interbank market selected by the Calculation Agent (after
      consultation with the Company) to provide a quotation of the rate (the
      "Rate Quotation") at which Three Month Deposits in amounts of not less
      than $1,000,000 are offered by it to prime banks in the London interbank
      market, at approximately 11:00 a.m. London time on such Interest
      Determination Date, that is representative of single transactions at such
      time (the "Representative Amounts"). If at least two Rate Quotations are
      provided, the interest rate will be the arithmetic mean of the Rate
      Quotations obtained by the Calculation Agent, plus 0.80%.

            (2) In the event LIBOR cannot be determined from the Moneyline
      Telerate service as described herein and fewer than two Rate Quotations
      are available as provided in (1) above, the interest rate will be the
      arithmetic mean of the rates quoted at approximately 11:00 a.m. New York
      City time on such Interest Determination Date, by three major banks in New
      York City, selected by the Calculation Agent (after consultation with the
      Company), for loans in Representative Amounts in U.S. dollars to leading
      European banks, having an index maturity of three months for a period
      commencing on the second London Business Day immediately following such
      Interest Determination Date, plus 0.80% PROVIDED, HOWEVER, that if fewer
      than three banks selected by the Calculation Agent are quoting such rates,
      the interest rate for the applicable Interest Period will be the same as
      the interest rate in effect for the immediately preceding Interest Period.

                                       4
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      Upon the request of a holder of the Notes, the Calculation Agent will
provide to such holder the interest rate in effect on the date of such request
and, if determined, the interest rate for the next Interest Period.

      No liability shall (in the absence of gross negligence, willful misconduct
or bad faith) attach to the Calculation Agent in connection with the exercise or
non-exercise by it of its powers, duties and discretions.

      The Indenture contains provisions for defeasance at any time of the entire
indebtedness of this Note or certain restrictive covenants and events of default
with respect to this Note, in each case upon compliance with certain conditions
set forth in the Indenture.

      If an event of default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Notes to be affected under the
Indenture at any time by the Company and the Trustee without the consent of such
Holders in certain limited circumstances or with the consent of the Holders of
66 2/3% in principal amount of the securities at the time outstanding of each
series to be affected. The Indenture also contains provisions permitting the
holders of specified percentages in principal amount of the securities of each
series at the time outstanding, on behalf of the holders of all securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Note shall be conclusive and
binding upon such holder and upon all future holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof, whether or not notation of such consent or waiver is made upon
this Note.

      As provided in and subject to the provisions of the Indenture, the holder
of this Note shall not have the right to institute any proceeding with respect
to the Indenture or for the appointment of a receiver or trustee or for any
other remedy thereunder, unless such holder shall have previously given the
Trustee written notice of a continuing event of default with respect to the
Notes, the holders of not less than 25% in principal amount of the Notes at the
time outstanding shall have made written request to the Trustee to institute
proceedings in respect of such event of default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from the
holders of a majority in principal amount of Notes at the time outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the holder of
this Note for the enforcement of any payment of principal hereof or any premium
or interest hereon on or after the respective due dates expressed herein.

      No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay

                                       5
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the principal of and any premium and interest on this Note at the times, place
and rate, and in the coin or currency, herein prescribed.

      As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the register of the
Notes, upon surrender of this Note for registration of transfer at the office or
agency of the Company in any place where the principal of and any premium and
interest on this Note are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the registrar of
the Notes duly executed by the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.

      The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes and of like tenor of
a different authorized denomination, as requested by the holder surrendering the
same.

      No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

      Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

      All terms used in this Note which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.

      This Note shall be governed by and construed in accordance with the law of
the State of New York, without regard to conflicts of laws principles thereof.

                                        6
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                          CERTIFICATE OF AUTHENTICATION

      This is one of the Notes of the series designated therein referred to in
the within-mentioned Indenture.

Dated: November 12, 2003                  THE BANK OF NEW YORK
                                          AS TRUSTEE

                                          By   Van K. Brown
                                               ---------------------------------
                                                     AUTHORIZED SIGNATORY

                                        7<PAGE>
                                                                    Exhibit 4.22

                          CALCULATION AGENCY AGREEMENT
                                    BETWEEN
                       PINNACLE WEST CAPITAL CORPORATION
                                      AND
                              THE BANK OF NEW YORK
                      FLOATING RATE SENIOR NOTES DUE 2005

            THIS AGREEMENT is made as of November 1, 2003, between PINNACLE WEST
CAPITAL CORPORATION, an Arizona corporation, whose principal executive office is
at 400 North Fifth Street, Phoenix, Arizona 85004 (the "Corporation"), and THE
BANK OF NEW YORK, a New York banking corporation, whose principal corporate
trust office is at 101 Barclay Street, New York, New York 10286 (together with
any successor, called the "Calculation Agent").

                             W I T N E S S E T H :

            WHEREAS, the Corporation proposes to issue and sell certain of its
securities designated as Floating Rate Senior Notes due 2005 (the "Notes"). The
Notes are to be issued under an Indenture dated as of December 1, 2000, between
the Corporation and The Bank of New York, as Trustee (the "Trustee"), as amended
and supplemented to the date hereof and as further amended and supplemented by
the Second Supplemental Indenture thereto dated as of November 1, 2003
(collectively, the "Indenture"). Terms used but not defined herein shall have
the meanings assigned to them in the Indenture and the Notes.

            For the purpose of appointing an agent to calculate the Rate of
Interest on the Notes, the Corporation and The Bank of New York agree as
follows:

            1.    Upon the terms and subject to the conditions contained herein,
the Corporation hereby appoints the Calculation Agent as its Calculation Agent
and Calculation Agent hereby accepts such appointment as the Corporation's agent
for the purpose of calculating the Rate of Interest on the Notes. The
Calculation Agent shall determine the Rate of Interest in the manner and at the
times provided in the Second Supplemental Indenture and the Notes.

            2.    The Calculation Agent shall exercise due care to determine the
Rate of Interest on the Notes and shall communicate the same to the Corporation,
the Trustee, The Depository Trust Company and any paying agent identified to it
in writing promptly after each determination. The Calculation Agent will, upon
the request of the holder of any Note, provide the Rate of Interest then in
effect with respect to such Note and, if determined, the Rate of Interest with
respect to such Floating Rate Note which will become effective on the next
Interest Payment Date. No amendment to the
<PAGE>
provisions of the Notes relating to the duties or obligations of the Calculation
Agent hereunder may become effective without the prior written consent of the
Calculation Agent, which consent shall not be unreasonably withheld.

            3.    The Calculation Agent accepts its obligations set forth
herein, upon the terms and subject to the conditions hereof, including the
following, to all of which the Corporation agrees:

                  (a)   The Calculation Agent shall be entitled to such
compensation as may be agreed upon with the Corporation for all services
rendered by the Calculation Agent, and the Corporation promises to pay such
compensation and to reimburse the Calculation Agent for the out-of-pocket
expenses (including reasonable attorneys' and other professionals' fees and
expenses) incurred by it in connection with the services rendered by it
hereunder upon receipt of such invoices as the Corporation shall reasonably
require. The Corporation also agrees to indemnify the Calculation Agent for, and
to hold it harmless against, any and all loss, liability, damage, claim or
expense (including the costs and expenses of defending against any claim
(regardless of who asserts such claim) of liability) incurred by the Calculation
Agent that arises out of or in connection with its accepting appointment as, or
acting as, Calculation Agent hereunder, except such as may result from the gross
negligence, willful misconduct or bad faith of the Calculation Agent or any of
its agents or employees. The Calculation Agent shall incur no liability and
shall be indemnified and held harmless by the Corporation for, or in respect of,
any actions taken, omitted to be taken or suffered to be taken in good faith by
the Calculation Agent in reliance upon (i) the opinion or advice of legal or
other professional advisors satisfactory to it or (ii) written instructions from
the Corporation. The Calculation Agent shall not be liable for any error
resulting from the use of or reliance on a source of information used in good
faith and with due care to calculate any Rate of Interest hereunder. The
provisions of this section shall survive the termination of this Agreement.

                  (b)   In acting under this Agreement and in connection with
the Notes, the Calculation Agent is acting solely as agent of the Corporation
and does not assume any obligations to or relationship of agency or trust for or
with any of the owners or holders of the Notes.

                  (c)   The Calculation Agent shall be protected and shall incur
no liability for or in respect of any action taken or omitted to be taken or
anything suffered by it in reliance upon the terms of the Notes, any notice,
direction, certificate, affidavit, statement or other paper, document or
communication reasonably believed by it to be genuine and to have been approved
or signed by the proper party or parties.

                                     - 2 -
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                  (d)   The Calculation Agent, its officers, directors,
employees and shareholders may become the owners of, or acquire any interest in,
any Notes, with the same rights that it or they would have if it were not the
Calculation Agent, and may engage or be interested in any financial or other
transaction with the Corporation as freely as if it were not the Calculation
Agent.

                  (e)   Neither the Calculation Agent nor its officers,
directors, employees, agents or attorneys shall be liable to the Corporation for
any act or omission hereunder, or for any error of judgment made in good faith
by it or them, except in the case of its or their gross negligence, willful
misconduct or bad faith.

                  (f)   The Calculation Agent may consult with counsel of its
selection and the advice of such counsel or any opinion of counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.

                  (g)   The Calculation Agent shall be obligated to perform such
duties and only such duties as are herein specifically set forth, and no implied
duties or obligations shall be read into this Agreement against the Calculation
Agent.

                  (h)   Unless herein otherwise specifically provided, any
order, certificate, notice, request, direction or other communication from the
Corporation made or given by it under any provision of this Agreement shall be
sufficient if signed by any officer of the Corporation.

                  (i)   The Calculation Agent may perform any duties hereunder
either directly or by or through agents or attorneys, and the Calculation Agent
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.

                  (j)   The Corporation will not, without first obtaining the
prior written consent of the Calculation Agent, make any change to the Notes in
the forms filed as exhibits to the Corporation's Form S-3 Registration Statement
No. 333-101457 by Form 8-K dated November 6, 2003 if such change would
materially and adversely affect the Calculation Agent's duties and obligations
under this Agreement.

            4.    (a)   The Calculation Agent may at any time resign as
Calculation Agent by giving written notice to the Corporation of such intention
on its part, specifying the date on which its desired resignation shall become
effective; provided, however, that such date shall never be earlier than 30 days
after the receipt of such notice by the Corporation, unless the Corporation
agrees to accept less notice. The

                                     - 3 -
<PAGE>
Calculation Agent may be removed at any time by the filing with it of any
instrument in writing signed on behalf of the Corporation and specifying such
removal and the date when it is intended to become effective. Such resignation
or removal shall take effect upon the date of the appointment by the
Corporation, as hereinafter provided, of a successor Calculation Agent. If
within 30 days after notice of resignation or removal has been given, a
successor Calculation Agent has not been appointed, the Calculation Agent may,
at the expense of the Corporation, petition a court of competent jurisdiction to
appoint a successor Calculation Agent. A successor Calculation Agent shall be
appointed by the Corporation by an instrument in writing signed on behalf of the
Corporation and the successor Calculation Agent. Upon the appointment of a
successor Calculation Agent and acceptance by it of such appointment, the
Calculation Agent so succeeded shall cease to be such Calculation Agent
hereunder. Upon its resignation or removal, the Calculation Agent shall be
entitled to the payment by the Corporation of its compensation, if any is owed
to it, for services rendered hereunder and to the reimbursement of all
out-of-pocket expenses incurred in connection with the services rendered by it
hereunder and to the payment of all other amounts owed to it hereunder.

                  (b)   Any successor Calculation Agent appointed hereunder
shall execute and deliver to its predecessor and to the Corporation an
instrument accepting such appointment hereunder, and thereupon such successor
Calculation Agent, without any further act, deed or conveyance, shall become
vested with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as such
Calculation Agent hereunder, and such predecessor, upon payment of its charges
and disbursements then unpaid, shall thereupon become obliged to transfer and
deliver, and such successor Calculation Agent shall be entitled to receive,
copies of any relevant records maintained by such predecessor Calculation Agent.

                  (c)   Any corporation into which the Calculation Agent may be
merged, or any corporation with which the Calculation Agent may be consolidated,
or any corporation resulting from any merger or consolidation or to which the
Calculation Agent shall sell or otherwise transfer all or substantially all of
its corporate trust assets or business shall, to the extent permitted by
applicable law, be the successor Calculation Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto. Notice of any such merger, consolidation or sale shall
forthwith be given to the Corporation and the Trustee.

                  5.    Any notice required to be given hereunder shall be
delivered in person, sent by letter or telecopy or communicated by telephone
(subject, in the case of communication by telephone, to confirmation dispatched
within twenty-four hours by letter or by telecopy), in the case of the
Corporation, 400 North Fifth Street, Phoenix,

                                     - 4 -
<PAGE>
Arizona 85004, telephone: (602) 250-5677, telecopy: (602) 250-5640, Attention:
Treasurer, in the case of The Bank of New York, to Corporate Trust
Administration, 101 Barclay Street, New York, New York 10286, telephone: (212)
815-5498, telecopy: (212) 815-5131 and, in the case of The Depository Trust
Company, to Manager Announcements, Dividend Department, The Depository Trust
Company, 55 Water Street - 25th Floor, New York, New York 10041, telecopy: (212)
855-4555 or (212) 709-1263, or to any other address of which any party shall
have notified the others in writing as herein provided. Any notice hereunder
given by telephone, telecopy or letter shall be deemed to be received when in
the ordinary course of transmission or post, as the case may be, it would be
received.

                  6.    This Agreement and your appointment as Calculation Agent
hereunder shall be construed and enforced in accordance with the laws of the
State of New York applicable to agreements made and to be performed entirely
within such state, and without regard to conflicts of laws principles, and shall
inure to the benefit of, and the obligations created hereby shall be binding
upon, the successors and assigns of each of the parties hereto.

                  7.    This Agreement may be executed by each of the parties
hereto in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all such
counterparts shall together constitute one and the same agreement.

                  8.    In the event of any conflict relating to the rights or
obligations of the Calculation Agent in connection with the calculation of the
Rate of Interest on the Notes, the relevant terms of this Agreement shall govern
such rights and obligations.

                                     - 5 -
<PAGE>
            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.

                                               PINNACLE WEST CAPITAL CORPORATION

                                              By: Barbara M. Gomez
                                                  ______________________________
                                                  Name:  Barbara M. Gomez
                                                  Title: Treasurer

                                               THE BANK OF NEW YORK,
                                               as Calculation Agent

                                              By: Van Brown
                                                  ______________________________
                                                  Name:  Van Brown
                                                  Title: Vice President

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