Pinnacle West Capital (PNW) 10-K risk factor changes: FY2024 vs FY2023

The ACC must also approve APS’s issuance of equity and debt [removed: securities] [added: 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, including the infusion of equity into APS.

These agencies regulate many aspects of APS’s utility operations, including safety and performance, emissions, siting and construction of facilities, [added: labor and employment,] customer service and the rates that APS can charge retail and wholesale customers.

In particular, new or revised laws or interpretations of existing laws or regulations may impact or call into question the ACC’s permissive regulatory authority, which may result in uncertainty as to jurisdictional authority within our state, and uncertainty as to whether [added: ACC decisions will be binding or challenged by other agencies or bodies asserting jurisdiction.]

[removed: These] [added: Additionally, these] laws and regulations generally require APS to obtain and comply with a wide variety of environmental licenses, permits, and other approvals.

[removed: If there is a delay or failure to obtain any required environmental regulatory approval, or if APS fails to obtain,] maintain, or comply with any such approval, operations at affected facilities could be suspended or subject to additional expenses.

APS [removed: currently] disposes of CCR in ash ponds and dry storage [removed: areas at Cholla and Four Corners.][added: areas.]

To the extent the rule requires the closure or modification of these CCR units, modification or changes to the manner of closure of such units, or the [added: construction of new CCR units beyond what we currently anticipate, APS would incur significant additional costs for CCR disposal.]

*Potential Financial Risks — Greenhouse Gas Regulation, the Clean Power Plan and Potential Litigation.* [removed: Following a U.S. Supreme Court decision on June 30, 2022, which substantially narrowed EPA’s authority to regulate power plant GHG emissions under] [added: On April 25, 2024,] the [removed: Clean Air Act, on May 23, 2023,] EPA [removed: proposed] [added: issued] new GHG emission standards for power plants.

[removed: In contrast to measures finalized in 2015, EPA’s May 2023 proposal is] [added: These new standards are] focused on limiting power plant GHG emissions through control mechanisms that can be implemented at individual power plant facilities.

Depending on the outcome of [removed: future] carbon emission rulemaking under the Clean Air Act targeting new and existing power plants, the utility industry may become subject to more stringent and expansive regulations.

Alternative GHG emission limitations may arise from litigation under either federal or state [added: common laws or citizen suit provisions of federal environmental statutes that attempt to force federal agency rulemaking or impose direct facility emission limitations.]

[removed: On February 12,] 2020, ACC Staff issued its second report regarding possible modifications to the ACC’s retail electric [added: competition rules.]

In April 2022, the Arizona Legislature [removed: passed] [added: passed,] and the Governor [removed: signed] [added: signed,] a bill that repealed the electric deregulation law that had been in place in Arizona since 1998.

Higher temperatures may decrease the snowpack, which might result in lowered soil moisture and an increased threat of [removed: forest fires.][added: wildfires.]

[removed: Forest fires] [added: Wildfires] could threaten APS’s communities and electric transmission lines and facilities.

Any damage caused as a result of [removed: forest fires] [added: wildfires] could negatively impact APS’s financial condition, results of operations, or cash flows.

The distributed renewable energy requirement is 30% of the applicable RES requirement for 2012 and subsequent years [removed: (this] [added: (APS requested a waiver of this] requirement [removed: has] [added: in the 2024 and 2025 RES Implementation Plans, which have not yet] been [removed: waived] [added: approved] by the [removed: ACC for 2023).][added: ACC).]

[removed: Customer participation] in distributed renewable energy programs would result in lower demand since customers would be meeting some of their own energy needs.

[removed: Actual] [added: *Actual and Projected Customer and Sales Growth.* APS’s actual] sales growth, excluding weather-related variations, may differ from [removed: our] [added: its] projections as a result of numerous factors, such as economic conditions, customer growth, [added: the legal, regulatory, and business environment in Arizona,] usage patterns and energy conservation, slower [added: than expected] ramp-up of and/or fewer [added: than expected] data centers and large manufacturing facilities, slower than expected commercial and industrial expansions, impacts of energy efficiency programs and growth in DG, responses to retail price changes, changes in regulatory standards, and impacts of new and existing laws and regulations, including environmental laws and regulations.

Based on past experience, a 1% variation in our annual residential and small commercial and industrial kWh sales projections under normal business conditions can result in increases or decreases in annual net income of approximately [removed: $20] [added: $24] million, and a 1% variation in our annual large commercial and industrial kWh sales projections under normal business conditions can result in increases or decreases in annual net income of approximately [removed: $5] [added: $6] million.

The operation of power generation, transmission and distribution facilities involves certain risks, including the risk of breakdown or failure of equipment, fuel interruption, and performance below expected [added: levels of output or efficiency.]

Concerns over the physical security of these assets could include damage to certain of our [removed: facilities due to vandalism or other deliberate acts that could lead to outages or other adverse effects.]

Risks related to the timely completion [removed: of] [added: of,] and costs associated [removed: with] [added: with,] these projects may be exacerbated by a constrained supply chain limiting the availability of necessary parts and materials as well as APS’s use, in some cases, of older, obsolete, or unsupported equipment.

The potential likelihood [added: and severity] of wildfires has increased due to many of the same weather and climate change impacts existing in Arizona as those that led to catastrophic wildfires in [removed: California.][added: other states.]

[removed: While such technology is intended to mitigate fire risk, it also introduces additional risks to APS and its customers, such as claims for damages, and the timing and effectiveness of such] [added: However, APS’s] fire mitigation efforts may be insufficient to prevent wildfires in APS’s expansive service territory and surrounding [removed: areas.][added: areas and could result in claims alleging damages due to the use, non-use, timing, or effectiveness of such measures.]

[added: In addition,] APS could be [removed: held liable] [added: sued regardless of fault] for damages incurred as a result of wildfires [removed: regardless of fault] and may not be able to recover all or a substantial portion of any such damages or costs from insurance or through rates.

In addition, APS is required by the ACC to meet certain energy resource portfolio [added: requirements, including those related to renewables development and energy efficiency measures, in addition to specific competitive resource procurement requirements.]

The development and operation of any generation facility is also subject to many risks, including those related to financing, siting, permitting, new and evolving technology, extreme weather events, workforce issues, cybersecurity attacks, supply [removed: chain constraints for critical spare parts, and the construction of sufficient transmission capacity to support these facilities among others.]

There appears to be an increasing level of activity, sophistication, and maturity of threat actors, including from both nation-state and non-nation state actors, that seek to exploit potential vulnerabilities in the electric utility industry and wish to disrupt the U.S. bulk power system, our information technology systems, generation (including our Palo Verde nuclear facility), transmission and distribution facilities, and other infrastructure facilities and [added: systems and physical assets.]

One of these agencies, NERC, has issued comprehensive regulations and standards surrounding the security of bulk power [removed: systems,] [added: systems] and is continually in the process of developing updated and additional requirements with which the utility industry must comply.

[removed: In the future, adequate insurance] [added: We] may not [added: have adequate insurance coverage for liabilities.]

[added: In the future, adequate insurance may not] be available at rates that we believe are reasonable, and the costs of responding to and recovering from a cyber incident may not be covered by insurance or recoverable in rates.

APS has an ownership interest in and operates on behalf of a group of participants, Palo Verde, which is the largest nuclear electric generating facility in the [added: western] United States.

In addition, APS is subject to retrospective premium adjustments under its nuclear property insurance policies with Nuclear Electric Insurance Limited (“NEIL”) for approximately [removed: $22.4] [added: $23.1] million if NEIL’s losses in any policy year exceed accumulated funds and if the retrospective premium assessment is declared by NEIL’s Board of Directors.

[removed: Widespread installation and] acceptance of new technologies could also enable the entry of new market participants, such as technology companies, into the interface between APS and its customers and could have other unpredictable effects on APS’s traditional business model.

Like many companies in the electric utility industry, our workforce is maturing, with approximately [removed: 28%] [added: 27.4%] of employees eligible to retire by the end of [removed: 2028.][added: 2029.]

Additionally, the valuation of liabilities related to our pension plan and other postretirement benefit plans are impacted by a discount rate, which is the interest rate used to discount future pension and other postretirement [removed: benefit obligations.]

[added: Changes in demographics, including increased number of retirements or] changes in life expectancy and changes in other actuarial assumptions, may also result in similar impacts.

[removed: Our ability to have the benefit of their cash flows, particularly in the case of any] insolvency or financial distress affecting our subsidiaries, would arise only through our equity ownership interests in our subsidiaries and only after their creditors have been satisfied.

Additionally, [removed: global] supply chains have been [removed: impacted,] [added: impacted and could be further impacted by inflation, tariffs, and other sociopolitical factors,] resulting in equipment delays and increased costs.

They could also impact the overall business environment in Arizona and affect APS’s customer and sales growth rates.

If there is a delay or failure to obtain any required environmental regulatory approval, or if APS fails to obtain,

The new regulations are currently being challenged in federal court.

Additionally, the Trump administration has stated that it intends to reverse or substantially revise these standards.

See Item 1 - Environmental Matters - Climate Change for more information.

On February 12,

On August 27, 2024, the ACC administratively closed this docket due to inactivity and obsolescence.

Modification of the ACC’s retail electric competition rules or other efforts of deregulation could result in increased competition, which could have a significant adverse impact on APS’s business and results of operations.

Customer participation

APS is exploring available options for securing sufficient electric generation and transmission to meet these projections of future customer needs; however, there are difficulties in properly forecasting the demands of these extra-large customers due to factors such as the nascent nature of the industries (e.g., artificial intelligence) that these customers are supporting and the multiple variables that impact their usage ramp-up and ultimate level of demand.

As data center and other extra-large customer opportunities evolve and develop, we may also enter into arrangements with customers and potential customers that require us to invest capital and assume credit risk related to such developments and the related generation and transmission investments before we receive any potential return.

APS is implementing strategies to attempt to reduce this risk; however, the difficulty in forecasting these demands and the additional risk of these arrangements could lead to stranded costs and other effects that could have material adverse impacts on APS’s financial condition, results of operations, and cash flows.

facilities due to vandalism or other deliberate acts that could lead to outages or other adverse effects.

Extreme weather events such as severe storms and strong wind gusts may also increase the likelihood of a wildfire in our service territory.

APS has a Comprehensive Wildfire Mitigation Plan (“CWMP”) that employs various strategies designed to prevent, mitigate, and respond to wildfire risks.

APS’s CWMP includes vegetation management and clearing protocols, operational measures and a public safety power shut off program (“PSPS”) on certain feeders, among other practices.

chain constraints for critical spare parts, and the construction of sufficient transmission capacity to support these facilities among others.

APS’s strategy, including the timing of such strategy, in adopting new technologies, such as artificial intelligence, could also adversely impact APS’s business.

For example, if APS fails to strategically implement artificial intelligence, it could miss the opportunity for cost savings, face increasing costs on legacy systems, insufficiently integrate internal and external data sets, or invest in low data quality, risk misusing artificial intelligence, impact employee satisfaction with its implementation of or failure to implement artificial intelligence and other technologies.

Widespread installation and

benefit obligations.

The operation of power generation, transmission and distribution facilities involves hazardous activities.

We may become exposed to significant liabilities for which we may not have adequate insurance coverage or risk mitigation.

Additionally, through our captive insurance cell, we take certain insurance risk on our business, such as certain wildfire coverage, excess property insurance, and excess employment practice liability.

We maintain an amount of insurance protection that we believe is customary, but there can be no assurance it will be sufficient or effective in light of all circumstances, hazards or liabilities to which we may be subject.

Our insurance does not cover every potential risk associated with our operations.

Adequate coverage at reasonable rates is not always obtainable.

We cannot provide assurance that insurance coverage will continue to be available in the amounts or on terms similar to our current policies.

These issues could have a material adverse effect on our business, results or operations, and financial condition.

Our ability to have the benefit of their cash flows, particularly in the case of any

In particular, in recent years the United States’ economy experienced a substantial rise in the inflation rate and more recently in 2025, the Trump administration has implemented tariffs and discussed additional tariffs, which would further increase costs.

transaction that some, or a majority, of our shareholders might believe to be in their best interests and, in that case, may prevent or discourage attempts to remove and replace incumbent directors.

ACC decisions will be binding or challenged by other agencies or bodies asserting jurisdiction.

In November 2021, the Arizona Court of Appeals issued an opinion that called into question the ACC-approved limitation of liability provision found in the APS Service Schedules.

APS sought review of the decision at the Arizona Supreme Court, which was denied; however, the Supreme Court depublished portions of the Court of Appeals’ decision.

APS is seeking revised tariff language to mitigate potential adverse impacts on APS’s future, potential litigation exposure which may result from this court decision.

construction of new CCR units beyond what we currently anticipate, APS would incur significant additional costs for CCR disposal.

These mechanisms would include carbon capture and sequestration, hydrogen co-firing, natural gas co-firing, and limits on facility output, among other measures.

EPA expects to take final action on this proposal in the spring or summer of 2024.

common laws or citizen suit provisions of federal environmental statutes that attempt to force federal agency rulemaking or impose direct facility emission limitations.

In 1999, the ACC approved rules for the introduction of retail electric competition in Arizona.

Retail competition could have a significant adverse financial impact on APS due to an impairment of assets, a loss of retail customers, lower profit margins or increased costs of capital.

Although some very limited retail competition existed in APS’s service area in 1999 and 2000, there are currently no active retail competitors offering unbundled energy or other utility services to APS’s customers.

This is in large part due to a 2004 Arizona Court of Appeals decision that found critical components of the ACC’s rules to be violative of the Arizona Constitution.

The ruling also voided the operating authority of all the competitive providers previously authorized by the ACC.

On May 9, 2013, the ACC voted to re-examine the facilitation of a deregulated retail electric market in Arizona.

The ACC subsequently opened a docket for this matter and received comments from a number of interested parties on the considerations involved in establishing retail electric deregulation in the state.

One of these considerations is whether various aspects of a deregulated market, including setting utility rates on a “market” basis, would be consistent with the requirements of the Arizona Constitution.

On September 11, 2013, after receiving legal advice from the ACC staff, the ACC voted 4-1 to close the current docket and await full Arizona Constitutional authority before any further examination of this matter.

competition rules.

*Actual and Projected Customer and Sales Growth.* Retail customers in APS’s service territory increased 2.0% for the year ended December 31, 2023, compared with the prior-year period.

For the three years through 2023, APS’s customer growth averaged 2.1% per year.

We currently project annual customer growth to be 1.5% to 2.5% for 2024 and the average annual growth to be in the range of 1.5% to 2.5% through 2026 based on anticipated steady population growth in Arizona during that period.

Retail electricity sales in kWh, adjusted to exclude the effects of weather variations, increased 1.5% for the year ended December 31, 2023, compared with the prior-year period.

While steady customer growth was somewhat offset by weaker usage among residential customers, energy savings driven by customer conservation, energy efficiency, and distributed renewable generation initiatives, the main drivers of positive sales for this period were continued strong sales to commercial and industrial customers and the ramp-up of new data center customers.

For the three years through 2023, annual retail electricity sales growth averaged 2.7%, adjusted to exclude the effects of weather variations.

Due to the expected growth of several large data centers and new large manufacturing facilities, we currently project that annual retail electricity sales in kWh will increase in the range of 2.0% to 4.0% for 2024 and that average annual growth will be in the range of 4.0% to 6.0% through 2026, including the effects of customer conservation, energy efficiency, and distributed renewable generation initiatives, but excluding the effects of weather variations.

These projected sales growth ranges include the impacts of several large data centers and new large manufacturing facilities, which are expected to contribute to 2024 growth in the range of 2.5% to 3.5% and to average annual growth in the range of 3.0% to 5.0% through 2026.

In April 2023, APS notified prospective extra-large customers without existing commitments from APS that it is not able to commit at this time to their future extra-large projects (over 25 MW).

Because of the high growth in demand for such projects, APS has developed a prioritization queue that identifies and prioritizes projects while maintaining system reliability and affordability for existing APS customers.

APS is exploring available options for securing sufficient electric generation and transmission to meet these projections of future customer needs.

levels of output or efficiency.

APS currently intends to implement a public safety power shutoff (“PSPS”) program in addition to its current fire mitigation efforts.

requirements, including those related to renewables development and energy efficiency measures, in addition to specific competitive resource procurement requirements.

systems and physical assets.

Changes in demographics, including increased number of retirements or

In particular, from 2021 to 2023, the United States’ economy has experienced a substantial rise in the inflation rate.

There is increased uncertainty as to whether the rise in inflation will continue and for how long.

Increases in inflation raise the Company’s costs for commodities, labor, materials and services.

The following discussion should be read in conjunction with Pinnacle West’s Consolidated [added: Financial Statements and APS’s Consolidated Financial Statements and the related Notes that appear in Item 8 of this report.]

This discussion provides a comparison of the [removed: 2023] [added: 2024] results with [removed: 2022] [added: 2023] results.

For the discussion of [removed: 2022] [added: 2023] compared to [removed: 2021,] [added: 2022,] see Part II.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of Pinnacle West Capital Corporation’s Annual Report on Form 10-K for the year ended December 31, [removed: 2022,] [added: 2023,] which specific discussion is incorporated herein by reference.

Pinnacle West is an investor-owned electric utility holding company based in Phoenix, Arizona with consolidated assets of approximately [removed: $25] [added: $26] billion.

[removed: For over 130 years,] [added: Since 1886,] Pinnacle West and our affiliates have provided energy and energy-related products to people and businesses throughout Arizona.

The [removed: IRA] [added: Inflation Reduction Act of 2022 (“IRA”)] significantly expands the availability of tax credits for investments in clean energy generation technologies and energy storage.

Key provisions that are relevant to APS’s clean energy commitment include (i) an extension of tax credits for solar and wind generation, including a new option for solar investments to claim a Production Tax Credit (“PTC”) in lieu of the Investment Tax Credit (“ITC”) beginning in 2022; (ii) expansion of the ITC to cover stand-alone energy storage technology beginning in 2023; [removed: and] (iii) introduction of [added: technology neutral clean energy ITCs and PTCs beginning in 2025; and (iv) introduction of] a new PTC for nuclear energy produced by existing nuclear energy [removed: plants (“Nuclear PTC”),] [added: plants,] available from 2024 through 2032.

The Internal Revenue Service and U.S. Treasury [added: Department] have issued preliminary guidance related to various provisions of the IRA that have enabled APS to claim credits related to its [removed: 2023] solar and [removed: battery] [added: energy storage] investments.

The Company continues to await regulations and other guidance, including with respect to the [removed: Nuclear] [added: nuclear] PTC, which will provide additional details and clarifications regarding how the Company may be able to claim IRA tax [removed: credits in future years.][added: credits.]

[removed: Recognizing that creating customer value is inextricably linked to increasing shareholder value,] APS’s focus remains on its customers and the communities it serves.

Accordingly, it is APS’s goal to achieve an industry-leading, best-in-class customer [removed: experience, while demonstrating compassion and advocacy for its customers.][added: experience.]

This multi-year objective includes incrementally improving APS’s J.D. Power (“JDP”) [removed: overall] [added: residential and business] customer satisfaction ratings [added: from the fourth] to [removed: achieve a first] [added: the top of second] quartile [removed: ranking in] [added: for] its [removed: peer set comprised of large investor-owned utilities.][added: customers.]

While our energy mix evolves, APS’s [removed: obligation] [added: commitment] to deliver reliable service to our customers remains.

APS is managing through significant growth in the Phoenix metropolitan area while experiencing supply chain issues similar to [added: those experienced in] other industries.

To prioritize reliability and meet substantial growth in [removed: residential and commercial] [added: customer] energy needs, APS has developed a future-focused, strategic transmission [removed: plan.][added: plan (the “Ten-Year Transmission Plan”).]

[removed: This] [added: The] Ten-Year [added: Transmission] Plan includes five critical transmission projects that comprise the APS strategic transmission portfolio, which [removed: represents] [added: represent] a significant upgrade to [removed: APS’s] [added: our] transmission system.

These five projects, along with other projects included in the Ten-Year [added: Transmission] Plan, [removed: are intended to] [added: will] support growing energy needs, strengthen reliability, and allow for the connection of new resources.

With recent wildfire events in [removed: Hawaii] [added: Hawaii, California,] and across North America, we have been devoting and will continue to devote substantial efforts to analyzing and developing enhancements to our systems and processes to mitigate fire risk within our service territory and communities, including by hardening our infrastructure, deploying new technologies where appropriate, increasing our awareness, implementing operational [added: changes, and enhancing our wildfire response capabilities.]

[removed: APS completed implementation of best-in-class fire modelling software that we are utilizing to more surgically identify and calculate risk and target future] system improvement investments such as fire-resistant pole wrapping, wood to steel pole conversions, and additional remote-controllable field devices like reclosers and switches.

[removed: We continue] [added: APS continues] to evaluate policy and regulatory options, as well as insurance programs, to mitigate the impact of wildfire events.

Maintaining reliability and affordability for [removed: our] customers during the clean energy transition is fundamental to [removed: our] [added: APS’s] strategy.

In October 2021, APS announced plans to evaluate regional market solutions as part of the [removed: informal] Western Markets Exploratory Group (“WMEG”).

As a member of WMEG, APS [removed: is exploring] [added: explored] the potential for a staged approach to new market services, including day-ahead energy sales, transmission system expansion, and other power supply and grid solutions consistent with existing [removed: state regulations.][added: regulations and known and expected market design.]

[added: APS utilizes the work done by] WMEG [removed: hopes] to [added: help] identify market solutions that can help achieve carbon reduction goals while supporting reliable, affordable service for customers.

APS [removed: is unable to] [added: cannot] predict the outcome of these [removed: discussions.][added: proceedings.]

APS [removed: will go] [added: went] live with a new Energy Management System (“EMS”) in [removed: March of] [added: April] 2024.

[removed: It] [added: APS] also [added: believes it will] better [removed: positions] [added: position] APS to participate in market opportunities that [removed: may] develop [removed: through] [added: over] the next decade.

APS’s key elements to delivering reliable power include resource [added: and transmission] planning, sufficient reserve margins, [removed: customer partnerships] [added: partnering with customers] to manage peak demand, fire mitigation, and operational [removed: preparedness.][added: preparedness, among others.]

Seasonal readiness procedures at APS [removed: also] include inspections to ensure good material conditions and critical control system surveys.

APS also plans for the unexpected by conducting emergency operations drills and coordinating [removed: on fire and emergency management] with federal, state, and local [removed: agencies.][added: agencies on fire and emergency management.]

APS continues to focus on mitigating the cost pressures related to [removed: the current inflationary environment.][added: inflation and other factors, such as tariffs.]

There are also external opportunities under APS’s customer affordability initiative, such as APS’s participation in the [removed: Western Energy Imbalance Market (“WEIM”).][added: WEIM.]

APS [removed: is participating] [added: participated] in market design and tariff development of Markets+, a day-ahead and real-time market offering from Southwest Power [removed: Pool.][added: Pool (“SPP”).]

In addition, APS is participating in the Western Resource Adequacy Program administered by Western Power [removed: Pool.][added: Pool and is transitioning to full binding participation as early as summer 2027.]

These [added: regional] efforts are driven by [removed: three] [added: the] objectives of reducing customer [removed: cost, improving reliability,] [added: cost] and [removed: incorporating more clean energy on APS’s system.][added: improving reliability.]

In terms of generation affordability, every three years, APS performs a comprehensive study, called an Integrated Resource [removed: Plan,] [added: Plan (“IRP”),] to identify [removed: how much energy our customers will need over the next 15 years and] what resources will be [removed: used] [added: necessary] to [added: safely and reliably] meet [removed: those needs.][added: the demand and energy needs of its customers over the next 15 years.]

In November 2023, APS released its latest IRP, which [removed: shows that energy] [added: identified forecasted customer] demand [removed: is] [added: and energy needs] growing at an unprecedented rate.

These [removed: RFPs] [added: ASRFPs] are open to [added: bids for] all [removed: technologies,] [added: resource types,] including customer-scale (behind the meter) and utility-scale [removed: (front] [added: (in front] of the meter) resources.

Through [removed: this] [added: the ASRFP] process, APS has [removed: consistently] found that clean resources like [removed: wind and] [added: wind,] solar, [removed: when coupled with] [added: and] energy storage technology, are [removed: among the most affordable options available today.][added: important elements of a least cost portfolio.]

For 2024, APS ranked at the top of the second quartile for large investor-owned utilities for both business and residential customers, with the residential results being APS’s highest rank and placement since 2016.

In furtherance of a customer-centric culture, APS employees have delivered an enhanced customer experience in recent years through a number of past and ongoing initiatives, such as improving the ease-of-use of APS’s automated phone system, improving the speed of answering customer calls, advancing phone advisor soft skill development through updated training curriculum, and adding 1,100-plus in-person payment locations, as well as introducing new customer payment channels.

Recently, APS redesigned its customer bills with the aim of increasing personalization and helping customers better understand their

energy use and find ways to save.

APS also implemented numerous enhancements to its website, including improving page-loading speeds, adding user-friendly dashboards, and making content more simple, relevant, and useful.

APS enhanced other customer touchpoints, such as communications throughout outages and the online outage center in addition to continuing to communicate with customers in their preferred channels about topics that matter most to them, such as reliability, energy-efficiency, financial assistance, the environment, and programs that enable them to design their own personalized energy experience.

Finally, APS continues to focus on employee learning, training, tools, and resources to ensure all employees understand their role in APS customers’ experiences.

Additionally, APS has implemented a variety of financial assistance programs to support customers struggling to pay their energy bills.

Among these assistance programs are discounts for qualified limited-income customers, including a new tier with larger discounts for APS’s lowest income customers added in the second quarter of 2024 and other non-income-based assistance programs, such as flexible payment arrangements and emergency utility bill assistance.

To ensure our most vulnerable customers are connected to these programs, we train and partner with more than one hundred community action agencies across our service territory.

APS completed implementation of fire modelling software that we are utilizing to more surgically identify and calculate risk and target future

In 2024, APS began installing a system of artificial intelligence-based fire sensing cameras with the ability to detect and alert on fire ignitions.

These alerts are sent both to APS and fire response dispatch centers to speed fire response in APS’s service territory regardless of the cause of the fire.

APS also implemented a PSPS program on certain feeders that began in the 2024 fire season, leveraging the additional real-time analysis provided by the new modelling software, and has educated and is continuing education outreach to customers and communities that may potentially be impacted by the PSPS program.

For example, on August 14, 2024, APS filed a request with the ACC for a deferral order that would authorize APS to defer, for future recovery in rates, operations and maintenance expenses associated with wildfire management, including increased insurance costs.

Additionally, APS was selected by the DOE’s Grid Deployment Office (“GDO”) to receive up to $70 million in federal money for fire mitigation and grid infrastructure projects.

This funding is part of the GDO’s Grid Resilience and Innovation Partnership Program and is contingent on APS negotiating and executing final grant agreements with GDO.

Dispatchable natural gas generators provide energy during times when intermittent resources, such as solar and wind, are insufficient to meet customer demand.

In addition to the previously added natural gas units at the modernized Ocotillo Power Plant in 2019 and efficiency improvements to gas units at the Redhawk, Sundance, and West Phoenix Power Plants in 2024, APS has contracted for two simple cycle combustion turbines (approximately 90 MW in total) at Sundance, which are expected to be in service in 2026, and eight simple cycle combustion turbines (approximately 397 MW in total) at Redhawk, which are expected to be in service in 2028.

APS continues to evaluate and pursue options for reliably serving growing customer energy needs and demand.

APS expects the new EMS to provide a better foundation which will improve future integration of the renewable and energy storage assets into APS’s generation resource portfolio, allowing APS to maximize the flexibility of its resources and fully engage in the Western Energy Imbalance Market (“WEIM”).

Overall inflation grew by 1.6% in Phoenix and 2.9% nationally over the twelve months ended December 2024.

Although inflationary impacts to APS began to slow in 2024, APS is still managing the impacts high inflation.

Additionally, the implementation of recent and future tariffs could further escalate costs and introduce supply chain constraints.

The Markets+ tariff was filed with FERC on March 29, 2024 and was approved on January 16, 2025.

APS announced a market decision to pursue participation in SPP Markets+.

In developing the IRP, APS considered how factors such as forecasted economic growth, impacts from weather, and new resource technology availability impact the amount and type of resources required to reliably meet customer needs.

These factors, among others, were used to develop a plan that identified a balanced mix of diverse energy generating resources to reliably serve customers’ future energy needs in the most affordable and sustainable manner possible.

To help ensure competitive costs for resources procured by APS, APS regularly issues competitive bid solicitations through the ASRFP process, with the most recent ASRFPs being issued in 2022, 2023, and 2024.

During the clean energy transition, dispatchable resources will play a vital role in maintaining grid reliability by serving as a back-up to intermittent energy resources when output is insufficient to meet customer needs.

Over the long term, each resource in a balanced and diverse portfolio is expected to provide complementary value and contribute to sustained delivery of reliable electric service.

and organizational approaches to completing high-value work and achieving internal efficiencies.

necessary governmental approvals and conditions associated with changes in plant ownership.

*Renewables.* APS’s IRP identifies a diverse mix of resources adequate to maintain grid reliability while serving increasing future customer energy needs.

Our IRP shows that renewable and clean resources are an important part of a reliable, cost effective portfolio.

APS seeks market-based pricing of procured resources through regular solicitation of project bids using its competitive ASRFP process.

Maintaining a balanced and diverse portfolio of resources will ensure continued reliable service to our customers in the most affordable manner possible.

On June 30, 2023, APS issued an ASRFP (the “2023 ASRFP”) pursuant to which APS procured nearly 7,300 MW of new resources to be in service from 2026 to 2028.

On November 20, 2024, APS issued an ASRFP (the “2024 ASRFP”) seeking 2,000 MW of resources.

APS is seeking projects that can reach commercial operation beginning June 1, 2028 through June 1, 2030 but will consider projects that may achieve commercial operation as early as 2026.

Financial Statements and APS’s Consolidated Financial Statements and the related Notes that appear in Item 8 of this report.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”).

In addition, the IRA contains several provisions which could create additional tax liabilities for corporations, including a 15% corporate alternative minimum tax for corporations with net profits in excess of $1 billion and a 1% excise tax on stock buybacks.

We currently do not believe the Company will be subject to any material tax liabilities as a result of these legislative provisions.

APS has made noteworthy progress on that front.

As previously disclosed, APS’s JDP Residential rankings for overall customer satisfaction improved in each of 2020, 2021, and 2022, and have improved again in 2023.

At the end of 2023, APS’s residential customer satisfaction ranked in the second quartile among large investor-owned utilities, and its business customer satisfaction ranked in the second quartile of utilities nationally.

changes, and enhancing our wildfire response capabilities.

APS also currently intends to implement a public safety power shutoff (“PSPS”) program for this upcoming fire season, leveraging the additional real-time analysis provided by the new modelling software.

As a critical partner to the large quantity of renewables and energy storage we are adding to our system, natural gas generation will play an important role in maintaining reliability for our customers.

One example is the 2019 addition of new natural gas units at the modernized Ocotillo Power Plant to provide cleaner-running and more efficient units.

Additionally, efficiency improvements to gas units at the Redhawk and Sundance Power Plants are planned for completion prior to the summer of 2024.

As part of a balanced energy portfolio, these flexible resource additions support reliability by responding quickly to the variability of solar generation and delivering energy in the late afternoon and early evening when solar production declines as the sun sets and customer demand peaks.

Complementary to and in support of the transition to renewable resources, APS continues to evaluate options to meet growing energy demand and ensure grid reliability, including through upgrades to and/or modernization of additional existing natural gas facilities.

The new EMS will better allow for integration of the renewable and energy storage assets into the APS’s generation resources.

This integration will allow APS to maximize the flexibility of our resources and fully engage in the Energy Imbalance Market.

Overall inflation grew by 2.7% in Phoenix and 3.4% nationally during 2023.

In 2022, overall inflation grew by 9.5% in Phoenix and 6.5% nationally.

The impacts from inflation have varied across separate categories of APS’s spending, including increases of up to 15% in 2023.

APS has seen inflationary impacts in supply constrained categories related to electrical equipment, such as transformers,

wire, and cable impacted by high utility demand outpacing manufacturing capacity.

Inflation continues to impact service rates and spend categories through pass-through costs such as supplier’s increased material costs, cost of insurance, and wage rates.

APS also participated in the design and drafting of the tariff for the CAISO’s Extended Day-Ahead Market, which was approved by FERC in December 2023.

In developing the IRP, APS considers factors that include how much economic growth is expected, what new technologies might be available and how weather can impact the demand for energy.

These inputs are then used to develop a plan that prioritizes reliability, affordability, and a clean, balanced energy mix.

This is due to continued residential and commercial customer growth throughout Arizona.

To keep pace with the fast-growing demand for electricity and maintain reliability, APS needs to add new electricity generating resources.

To ensure that the most affordable and reliable solutions are selected, APS issued All-Source Request for Proposals (“RFPs”) in 2022 and 2023.

Over the long term, these resources are expected to provide the greatest value as part of a diverse energy mix.

conditions as well as planned maintenance outages and unplanned outages.

*Renewables.* APS’s IRP (see Note 3 for additional information) establishes the path to meeting our clean energy commitment and maintaining reliable electric service for our customers.

APS intends to strengthen its already diverse energy mix by increasing its investments in carbon-free resources.

Our IRP rapidly adds clean energy and storage resources while maintaining reliable and affordable service.

Its near-term actions are focused on clean, reliable energy and positive customer outcomes and include: (a) competitive all source requests for proposal (“RFPs”) that provide an on-ramp to procure additional clean energy resources such as solar, wind, energy storage, and DSM resources, all of which lead to a cleaner grid and (b) strategic, short-term wholesale market purchases from a combination of existing merchant natural gas units, neighboring utility systems and wholesale market participants that ensure operational reliability.

This balance will ensure an appropriately diverse portfolio designed to achieve the same operational reliability and customer affordability as APS’s near-term strategies.

In addition, APS is actively seeking to include future facility purchase options in its PPAs that will enable investments with greater financial flexibility.

On June 30, 2023, APS issued an RFP (the “2023 RFP”) seeking approximately 1,000 MW of reliable capacity, including at least 700 MW of renewable resources with a focus on in-service dates between 2026 and 2028.

Bids from the 2023 RFP were received on September 6, 2023, and APS has started negotiations on multiple projects, including a 400 MW wind facility PPA that was signed in December 2023.

| Solar | | | 370 | | | | | | 1,261 | | | | | |

| Wind | | | 637 | | | | | | 616 | | | | | |

Pinnacle West is a holding company [added: incorporated in Arizona] that conducts business through its subsidiaries.

APS is [added: incorporated in Arizona and is] a vertically-integrated electric utility that provides either retail or wholesale electric service to most of Arizona, with the major exceptions of about one-half of the Phoenix metropolitan area, the Tucson metropolitan area and Mohave County in northwestern Arizona.

Pinnacle West’s other [added: active] subsidiaries are El Dorado, [added: an Arizona corporation, and] PNW Power, [removed: and 4CA.][added: a Delaware limited liability company.]

We own or lease [removed: 6,491] [added: 6,540] MW of regulated generation capacity and we hold a mix of both long-term and short-term purchased power agreements for additional capacity.

During [removed: 2023,] [added: 2024,] no single purchaser or user of energy accounted for more than [removed: 2.1%] [added: 1.4%] of our electric revenues.

][added: 8.5x11_2022_Service_Territory_Map_FL.jpg](https://www.sec.gov/Archives/edgar/data/764622/000076462225000023/pnw-20241231_g1.jpg)]

APS’s sources of energy by type used to supply energy to Native Load customers during [removed: 2023] [added: 2024] were [added: approximately] as follows:

[removed: ][added: ]

[removed: *Renewables] [added: *Utility Scale Renewables] include energy from [removed: wind, solar, geothermal,] biogas, biomass, [added: geothermal, solar,] and [removed: DG.][added: wind.]

The share of APS’s energy supply being derived from clean resources was approximately [removed: 51%] [added: 54%] in [removed: 2023,] [added: 2024,] which includes energy from nuclear, renewables and DSM.

[added: In response to climate change,] APS has undertaken a number of initiatives to reduce carbon, including renewable energy procurement and development, and promotion of programs and rates that promote energy conservation, renewable energy use, and energy efficiency.

APS currently has a diverse portfolio of renewable resources, including [removed: solar, wind, geothermal,] biogas, [added: biomass, geothermal, solar,] and [removed: biomass.][added: wind.]

- A [removed: commitment] [added: plan] to exit from coal-fired generation by 2031.

APS plans to continue its [removed: comprehensive] forest management programs aimed at reducing wildfires, as those risks become compounded by shorter, drier winters and longer, hotter summers as a result of climate change.

- Storage and [added: preparation for] disposal of spent nuclear fuel.

The Palo Verde participants have contracted for 100% of Palo Verde’s requirements for uranium concentrates through 2028 and [removed: 48%] [added: 52%] through 2029; 100% of Palo Verde’s requirements for conversion services through [removed: 2029] [added: 2030] and [removed: 75%] [added: 32%] through [removed: 2030;] [added: 2031;] 100% of Palo Verde’s requirements for enrichment services through [removed: 2026 and 28% for 2027;] [added: 2028;] and 100% of Palo Verde’s requirements for fuel fabrication through 2027 for Unit 2 and Unit 1 and 2028 for Unit 3.

In June 2008, the DOE submitted its Yucca Mountain construction authorization application to the NRC, but in March 2010, the DOE filed a motion to dismiss with prejudice the Yucca Mountain construction [added: authorization application.]

[removed: Several legal proceedings followed challenging DOE’s withdrawal of its Yucca] Mountain construction authorization [removed: application and the NRC’s cessation of its review of the Yucca Mountain construction authorization] application, which were consolidated into one matter at the U.S. Court of Appeals for the District of Columbia Circuit (the “D.C. Circuit”).

APS has [removed: submitted nine] [added: recovered costs for ten] claims pursuant to the terms of the August [removed: 18,] [added: 15,] 2014 settlement agreement, for [removed: nine] [added: ten] separate time periods during July 1, 2011 through October 31, [removed: 2022.][added: 2023.]

The DOE has approved and paid [removed: $138.2] [added: approximately $156.7] million for these claims (APS’s share is [removed: $40.2] [added: approximately $45.6] million).

On October 31, [removed: 2023,] [added: 2024,] APS filed its [removed: tenth] [added: eleventh] claim pursuant to the terms of the August [removed: 18,] [added: 15,] 2014, settlement agreement in the amount of [removed: $18.46] [added: approximately $18] million (APS’s share is [removed: $5.4] [added: approximately $5.3] million).

In February [removed: 2024,] [added: 2025,] the DOE approved [removed: $18.39] [added: approximately $17.6] million of this claim.

The final Continued Storage Rule was [added: subject to continuing legal challenges before the NRC and the Court of Appeals.]

[removed: In June 2016, the D.C.] Circuit issued its final decision, rejecting all remaining legal challenges to the Continued Storage Rule.

APS has six natural gas power plants located throughout Arizona, consisting of Redhawk, located near Palo Verde; Ocotillo, located in [removed: Tempe (discussed below);] [added: Tempe;] Sundance, located in Coolidge; West Phoenix, located in southwest Phoenix; Saguaro, located north of Tucson; and Yucca, located near Yuma.

[removed: As part of APS’s Clean Energy Commitment,] APS [removed: has committed] [added: plans] to exit coal-fired generation as part of its portfolio of electricity generating resources, including Four Corners, by 2031.

The Four Corners co-owners executed a long-term agreement for the supply of coal to Four Corners from July 2016 through [removed: 2031 (the “2016 Coal Supply Agreement”).][added: 2031, which was amended and restated on July 1, 2024.]

In June 2021, APS and the owners of Four Corners entered into an agreement that would allow Four Corners to operate seasonally at the election of the owners as early as fall [removed: 2023, subject to the necessary governmental approvals and conditions associated with changes in plant ownership.][added: 2023.]

Following the closure of Unit 2, APS has a total entitlement from Cholla of [removed: 381] [added: 380] MW.

APS [removed: purchases] [added: purchased] all of [removed: Cholla’s] [added: Cholla] coal requirements from a coal supplier that mines [removed: all of] the coal under long-term leases of coal reserves with the federal and state governments and private landholders.

[removed: APS had a total] entitlement from the Navajo Plant of 315 MW.

In addition to the AZ Sun Program, APS developed the 44 MW Red Rock Solar Plant and the 150 MW Agave Solar Plant, each of which it owns and [removed: operates.][added: operates, and has contracted for the construction of the 168 MW Ironwood Solar Plant.]

[removed: APS Solar Communities (formerly AZ Sun II) is a three-year program authorizing APS to spend $10] million to $15 million in capital costs each year to install utility-owned DG systems on low to moderate income residential homes, non-profit entities, Title I schools, and rural government facilities.

To date, APS has a diverse portfolio of existing and planned renewable resources totaling [removed: 5,010] [added: 7,660] MW, including [removed: solar, wind,] [added: biogas, biomass,] geothermal, [removed: biomass] [added: solar,] and [removed: biogas.][added: wind.]

Of this portfolio, [removed: 3,072] [added: 3,608] MW are currently in operation and [removed: 1,938] [added: 4,052] MW are under contract for development or are under construction.

Renewable resources in operation include [removed: 415] [added: 416] MW of facilities owned by APS, [removed: 1,034] [added: 1,465] MW of long-term purchased power agreements, and an estimated [removed: 1,623] [added: 1,727] MW of customer-sited, third-party owned distributed energy resources.

The following table summarizes APS’s renewable energy sources currently in operation and under development as of [removed: December 31, 2023.][added: the date of this report.]

| APS Owned (a) | | | | | | AZ | | | | | | Various | | | | | | | | | | | | [removed: 37] [added: 38] | | | | | | | | |

| Total APS Owned | | | | | | | | | | | | | | | | | | | | | | | | [removed: 415] [added: 416] | | | | | | [removed: —] [added: 168] | | |

| CO Bar Solar C | | | | | | Coconino County, AZ | | | | | | [removed: 2025] [added: 2027] | | | | | | 20 | | | | | | | | | | | | 206 | | |

Our reportable business segment activities are conducted primarily through our wholly-owned subsidiary, APS.

Several legal proceedings followed challenging DOE’s withdrawal of its Yucca Mountain construction authorization application and the NRC’s cessation of its review of the Yucca

In June 2016, the D.C.

In 2024, APS contracted for the addition of two combustion turbines (approximately 90 MW in total) at Sundance, which are expected to be in service in 2026, and the addition of eight combustion turbines (approximately 397 MW total) at Redhawk, which are expected to be in service in 2028.

In July 2024, APS and the owners amended the agreement to retain the option for seasonal operation.

APS elected not to extend the coal and transportation agreements that expired on December 31, 2024, as Cholla operations are expected to conclude in 2025.

APS had a total

APS Solar Communities (formerly AZ Sun II) is a three-year program authorizing APS to spend $10

Subsequently, on March 5, 2024, the ACC ordered APS not to expand or extend the APS Solar Communities program.

Consistent with that decision, the Solar Communities program has been discontinued and APS stopped enrolling new customers.

APS will continue work on projects that were enrolled prior to that decision.

On June 30, 2023, APS issued an ASRFP (the “2023 ASRFP”) pursuant to which APS procured nearly 7,300 MW of new resources to be in service from 2026 to 2028.

On November 20, 2024, APS issued an ASRFP (the “2024 ASRFP”) seeking 2,000 MW of resources.

APS is seeking projects that can reach commercial operation beginning June 1, 2028 through June 1, 2030 but will consider projects that may achieve commercial operation as early as 2026.

Additionally, APS is interested in projects that require longer planning, permitting, and construction and can be commercially operational after June 1, 2030.

Bids for the 2024 ASRFP were due on February 5, 2025.

| Ironwood Solar | | | | | | Dateland, AZ | | | | | | 2026 | | | | | | | | | | | | | | | | | | 168 | | |

| Hashknife 1 | | | | | | Navajo County, AZ | | | | | | 2026 | | | | | | 20 | | | | | | | | | | | | 275 | | |

| Catclaw | | | | | | Buckeye, AZ | | | | | | 2026 | | | | | | 20 | | | | | | | | | | | | 225 | | |

| Papago Solar | | | | | | Maricopa County, AZ | | | | | | 2026 | | | | | | 20 | | | | | | | | | | | | 150 | | |

| Hashknife 2 | | | | | | Navajo County, AZ | | | | | | 2027 | | | | | | 20 | | | | | | | | | | | | 200 | | |

| Kitt | | | | | | Eloy, AZ | | | | | | 2026 | | | | | | 20 | | | | | | | | | | | | 100 | | |

| Pioneer | | | | | | Yuma, AZ | | | | | | 2027 | | | | | | 20 | | | | | | | | | | | | 300 | | |

| Maricopa Energy Center Phase 1 | | | | | | Maricopa County, AZ | | | | | | 2026 | | | | | | 20 | | | | | | | | | | | | 183 | | |

| Maricopa Energy Center Phase 2 | | | | | | Maricopa County, AZ | | | | | | 2027 | | | | | | 20 | | | | | | | | | | | | 367 | | |

| Snowflake Solar | | | | | | Snowflake, AZ | | | | | | 2027 | | | | | | 20 | | | | | | | | | | | | 475 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Total PPAs | | | | | | | | | | | | | | | | | | | | | | | | 1,465 | | | | | | 3,821 | | |

See “Energy Sources and Resource Planning — Generation Facilities — Renewable Energy Portfolio” for more details on renewable energy power purchase agreements.

On June 21, 2023, the ACC granted the extension.

On July 31, 2024, the ACC held an IRP workshop where utilities and stakeholders presented on the 2023 IRPs.

On October 8, 2024, the ACC acknowledged APS’s 2023 IRP and approved certain amendments to the IRP process, including requirements for APS to demonstrate resource adequacy prior to exiting Four Corners as well as analysis of impacts from western market participation and planned resource requirements in the next IRP.

The Markets+ tariff was filed with FERC on March 29, 2024 and was approved on January 16, 2025.

APS announced a market decision to pursue participation in SPP Markets+.

Instead, the ACC opened a new docket to consider all-source request for proposals (“ASRFP”) requirements and the IRP process.

On August 21, 2024, ACC Staff proposed amendments striking the rules and filed preliminary economic, small business, and consumer impact statements, consistent with the formal rulemaking process.

In order to achieve these requirements, the ACC allows APS to include a RES surcharge as part of customer bills to recover the approved amounts for use on renewable energy projects.

Each year, APS is required to file a five-year implementation plan with the ACC and seek approval for funding the upcoming year’s RES budget.

In June 2021, the ACC adopted a clean energy rules package which would require APS to meet certain clean energy standards and technology procurement mandates, obtain approval for its action plan included in its IRP, and seek cost recovery in a rate process.

In response to climate change, the entire electric utility industry, as well as the global economy, is in the midst of a profound transition to clean energy and a new low-carbon economy.

authorization application.

subject to continuing legal challenges before the NRC and the Court of Appeals.

Ocotillo was originally a 330 MW 4-unit gas plant located in Tempe.

In early 2014, APS announced a project to modernize the plant, which involved retiring two older 110 MW steam units, adding five 102 MW combustion turbines, and maintaining two existing 55 MW combustion turbines.

In total, this increased the capacity of the site by 290 MW to 620 MW.

The Ocotillo modernization project was completed in 2019.

The Cholla coal contract runs through 2024.

In addition, APS has a coal transportation contract that runs through 2024.

Two of our large customers purchase renewable energy credits from APS that are equivalent to the amount of renewable energy that Red Rock is projected to generate.

On June 30, 2023, APS issued an All-Source Request for Proposal (“RFP”) seeking approximately 1,000 MW of reliable capacity, including at least 700 MW of renewable resources with a focus on in-service dates between 2026 and 2028 (the “2023 RFP”).

Bids from the 2023 RFP were received on September 6, 2023, and APS has started negotiations on multiple projects, including a 400 MW wind facility PPA that was signed in December 2023.

| Total PPAs | | | | | | | | | | | | | | | | | | | | | | | | 1,034 | | | | | | 1,877 | | |

As noted above, on June 30, 2023, APS issued the 2023 RFP seeking approximately 1,000 MW of reliable capacity, including at least 700 MW of renewable resources, including energy storage, with a focus on in-service dates between 2026 and 2028.

APS currently plans to install more than 2,700 MW of utility scale energy storage by 2026, including through energy storage projects under PPAs and AZ Sun retrofits as well as through resources solicited through current and future RFPs.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Net Capacity in Operation (MW) | | | | | | | | | Net Capacity Planned / Under Development (MW) | | | | | |

| APS Owned Energy Storage | | | 182 | | | (a) | | | | | | 19 | | | (b) | | |

| PPAs Energy Storage | | | 60 | | | | | | | | | 2,182 | | | | | |

| Customer-Sited Energy Storage | | | 30 | | | | | | | | | 20 | | | | | |

| Total Energy Storage Portfolio | | | 272 | | | | | | | | | 2,221 | | | | | |

(a) Includes 0.3 MW of APS-owned customer-sited batteries.

(b) Includes 19 MW of capacity that entered commercial operation in January 2024.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Renewable energy purchased power agreements are described in detail below under “Current and Future Resources — Renewable Energy Standard.”

APS was originally required to file its IRP by August 1, 2023.

On October 4, 2023, the ACC updated the IRP processing timeline with a due date of August 30, 2024 for the ACC Staff Assessment and Proposed Order and an open meeting decision due date yet to be determined.

APS also participated in the design and drafting of the tariff for the CAISO’s Extended Day-Ahead Market, which was approved by FERC in December 2023.

On July 30, 2020, the ACC Staff issued final draft energy rules, which proposed 100% of retail kWh sales from clean energy resources by the end of 2050.

Nuclear power was defined as a clean energy resource.

The proposed rules also required 50% of retail energy served be renewable by the end of 2035.

On November 13, 2020, the ACC approved a final draft energy rules package which required additional procedural steps in the rulemaking process.

The renewable energy requirement is 13% of retail electric sales in 2023 and increases annually until it reaches 15% in 2025.

A component of the RES is focused on stimulating development of DG systems.

Accordingly, under the RES, an increasing percentage of that requirement must be supplied from distributed energy resources.

This distributed renewable energy requirement, which was waived by the ACC as a part of APS’s 2023 RES Implementation Plan, would have been 30% of the overall RES requirement of 13% in 2023.

On September 23, 2022, APS filed a community solar proposal in compliance with the ACC order that was informed by a stakeholder working group.

APS proposed a small, pilot scale program size of up to 140 MW that would be selected through a competitive RFP.

For the fiscal year ended December 31, [removed: 2023][added: 2024]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such [removed: files).]

| ARIZONA PUBLIC SERVICE COMPANY | | | | | | $ | 0 | | as of June 30, [removed: 2023] [added: 2024] | | |

| PINNACLE WEST CAPITAL CORPORATION | | | Number of shares of common stock, no par value, outstanding as of February [removed: 21, 2024:] [added: 20, 2025:] | | | [removed: 113,427,367] [added: 119,099,064] | | |

| ARIZONA PUBLIC SERVICE COMPANY | | | Number of shares of common stock, $2.50 par value, outstanding as of February [removed: 21, 2024:] [added: 20, 2025:] | | | 71,264,947 | | |

Portions of Pinnacle West Capital Corporation’s definitive Proxy Statement relating to its Annual Meeting of Shareholders to be held on May [removed: 22, 2024] [added: 21, 2025] are incorporated by reference into Part III hereof.

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This combined Form 10-K is separately filed by Pinnacle West [added: Capital Corporation (“Pinnacle West”)] and [removed: APS.][added: Arizona Public Service Company (“APS”).]

| Pinnacle West | | | Pinnacle West Capital Corporation (any use of the words “Company,” “we,” [added: “us,”] and “our” refer to Pinnacle [removed: West)] [added: West unless the context requires otherwise)] | | |

- variations in demand for electricity, including those due to weather, seasonality (including large increases in ambient temperatures), the general economy or social conditions, [removed: customer,] [added: customer] and sales growth (or decline), the effects of energy conservation measures and [removed: distributed generation,] [added: DG,] and technological advancements;

- the potential effects of climate change on our electric system, including as a result of weather [removed: extremes] [added: extremes,] such as prolonged drought and high temperature variations in the area where APS conducts its business;

- new legislation, ballot [removed: initiatives] [added: initiatives,] and regulation or interpretations of existing legislation or regulations, including those relating to environmental requirements, regulatory and energy policy, nuclear plant [removed: operations] [added: operations,] and potential deregulation of retail electric markets;

- [removed: our] [added: the] ability [added: of APS] to meet renewable energy and energy efficiency mandates and recover related costs;

- current and future economic conditions in [removed: Arizona;][added: Arizona, such as the housing market and overall business and regulatory environment;]

files).

| PINNACLE WEST CAPITAL CORPORATION | | | | | | $ | 8,663,553,568 | | as of June 30, 2024 | | |

| [PART I](#i4188daee47a2424f9b9f03a13cf73aab_16) | | | | | | [3](#i4188daee47a2424f9b9f03a13cf73aab_16) | | |

| [PART II](#i4188daee47a2424f9b9f03a13cf73aab_43) | | | | | | [55](#i4188daee47a2424f9b9f03a13cf73aab_43) | | |

| | | | [APS Financial Statements](#i4188daee47a2424f9b9f03a13cf73aab_115) | | | [106](#i4188daee47a2424f9b9f03a13cf73aab_115) | | |

| [PART III](#i4188daee47a2424f9b9f03a13cf73aab_226) | | | | | | [203](#i4188daee47a2424f9b9f03a13cf73aab_226) | | |

| [PART IV](#i4188daee47a2424f9b9f03a13cf73aab_244) | | | | | | [206](#i4188daee47a2424f9b9f03a13cf73aab_244) | | |

| [SIGNATURES](#i4188daee47a2424f9b9f03a13cf73aab_253) | | | | | | [228](#i4188daee47a2424f9b9f03a13cf73aab_253) | | |

Any use of the words “Company,” “we,” “us,” and “our” refer to Pinnacle West unless the context otherwise requires.

| ATM Program | | | At-the-market equity distribution program | | |

| Captive | | | Captive Insurance Cell | | |

| DG | | | Distributed Generation | | |

| Redhawk | | | Redhawk Power Plant | | |

| Sundance | | | Sundance Power Plant | | |

| PINNACLE WEST CAPITAL CORPORATION | | | | | | $ | 9,215,155,738 | | as of June 30, 2023 | | |

| [PART I](#i097d433795444a8ca6a05c463d1777c5_16) | | | | | | [3](#i097d433795444a8ca6a05c463d1777c5_16) | | |

| [PART II](#i097d433795444a8ca6a05c463d1777c5_40) | | | | | | [55](#i097d433795444a8ca6a05c463d1777c5_40) | | |

| | | | [APS Financial Statements](#i097d433795444a8ca6a05c463d1777c5_112) | | | [105](#i097d433795444a8ca6a05c463d1777c5_112) | | |

| [PART III](#i097d433795444a8ca6a05c463d1777c5_220) | | | | | | [201](#i097d433795444a8ca6a05c463d1777c5_220) | | |

| [PART IV](#i097d433795444a8ca6a05c463d1777c5_238) | | | | | | [204](#i097d433795444a8ca6a05c463d1777c5_238) | | |

| [SIGNATURES](#i097d433795444a8ca6a05c463d1777c5_247) | | | | | | [225](#i097d433795444a8ca6a05c463d1777c5_247) | | |

| 4CA | | | 4C Acquisition, LLC, a subsidiary of the Company | | |

| BART | | | Best available retrofit technology | | |

| DC | | | Direct Current | | |

| DG | | | Small-scale renewable energy technologies that are located on customers’ properties, such as rooftop solar systems | | |

| TOU | | | Time of Use | | |

Neither Pinnacle West nor APS has received written comments regarding its periodic or current reports from the SEC staff that were issued 180 days or more preceding the end of its [removed: 2023] [added: 2024] fiscal year and that remain unresolved.

The Cybersecurity Group also has documented processes for identifying, responding to, and internally escalating cybersecurity [removed: incidents.][added: incidents to management and the Board of Directors.]

[removed: Once an incident meets certain criteria, the Company’s Cybersecurity Incident Command or, in the most severe cases that] impact the entire Company, the Corporate Emergency Operations Center is activated and formal response procedures are followed to address the incident.

Every year, as a part of the Enterprise Risk Management Program, [removed: the top] risks affecting the Company are identified.

For [removed: 2023,] [added: 2024,] cybersecurity was identified as a [removed: top] risk.

Once an incident meets certain criteria, the Company’s Cybersecurity Incident Command or, in the most severe cases that

APS’s portfolio of owned generating facilities as of December 31, [removed: 2023] [added: 2024] is provided in the table below:

| Cholla 1,3 | | | | | | 2 | | | | | | | | | | | | Coal | | | | | | Base Load | | | | | | [removed: 387] [added: 380] | | |

| Total Steam | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 1,357] [added: 1,350] | | |

| Redhawk | | | | | | 2 | | | | | | | | | | | | Gas | | | | | | Load Following | | | | | | [removed: 1,088] [added: 1,136] | | |

| West Phoenix | | | | | | 5 | | | | | | | | | | | | Gas | | | | | | Load Following | | | | | | [removed: 887] [added: 874] | | |

| Total Combined Cycle | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 1,975] [added: 2,010] | | |

| Ocotillo [removed: (d)] | | | | | | 7 | | | | | | | | | | | | Gas | | | | | | Peaking | | | | | | [removed: 620] [added: 630] | | |

| Douglas | | | | | | 1 | | | | | | | | | | | | Oil | | | | | | Peaking | | | | | | [removed: 16] [added: 18] | | |

| Sundance | | | | | | 10 | | | | | | | | | | | | Gas | | | | | | Peaking | | | | | | [removed: 420] [added: 430] | | |

| West Phoenix | | | | | | 2 | | | | | | | | | | | | Gas | | | | | | Peaking | | | | | | [removed: 110] [added: 114] | | |

| Yucca 5, 6 | | | | | | 2 | | | | | | | | | | | | Gas | | | | | | Peaking | | | | | | [removed: 96] [added: 90] | | |

| Total Combustion Turbine | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 1,598] [added: 1,618] | | |

| [removed: Solar:] [added: Solar: (d)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Cotton Center [removed: (e)] | | | | | | 1 | | | | | | | | | | | | Solar | | | | | | As Available | | | | | | 17 | | |

| Hyder I [removed: (e)] | | | | | | 1 | | | | | | | | | | | | Solar | | | | | | As Available | | | | | | 17 | | |

| Paloma [removed: (e)] | | | | | | 1 | | | | | | | | | | | | Solar | | | | | | As Available | | | | | | 17 | | |

| Gila Bend [removed: (e)] | | | | | | 1 | | | | | | | | | | | | Solar | | | | | | As Available | | | | | | 36 | | |

| Hyder II [removed: (e)] | | | | | | 1 | | | | | | | | | | | | Solar | | | | | | As Available | | | | | | 14 | | |

| Foothills [removed: (e)] | | | | | | 1 | | | | | | | | | | | | Solar | | | | | | As Available | | | | | | 38 | | |

| Desert Star [removed: (e)] | | | | | | 1 | | | | | | | | | | | | Solar | | | | | | As Available | | | | | | 10 | | |

| APS Owned Distributed Energy | | | | | | | | | | | | | | | | | | Solar | | | | | | As Available | | | | | | [removed: 37] [added: 38] | | |

| Total Solar | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 415] [added: 416] | | |

| Total Capacity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 6,491] [added: 6,540] | | |

The other participants are Salt River Project, SCE, El Paso Electric Company, Public Service Company of New Mexico, Southern California Public Power Authority, and Los Angeles Department of Water [removed: &] [added: and] Power.

[removed: See] [added: (d)See] “Business of Arizona Public Service Company — Energy Sources and Resource Planning — Energy Storage” above for details related to [removed: these and other] [added: APS’s] energy storage [added: facilities and] agreements.

Current Facilities. As of [removed: February 1, 2024,] [added: January 24, 2025,] APS’s transmission facilities consist of approximately [removed: 5,832] [added: 5,817] pole miles of overhead lines and approximately [removed: 85] [added: 86] miles of underground lines, [removed: 5,772] [added: 5,757] miles of which are located in Arizona.

APS’s distribution facilities consist of approximately [removed: 11,289] [added: 11,317] miles of overhead lines and approximately [removed: 23,604] [added: 24,031] miles of underground primary cable [removed: (20,508] [added: (20,893] when excluding abandoned conductor), all of which are located in Arizona.

The following table shows APS’s jointly-owned interests in those transmission facilities recorded on the Consolidated Balance Sheets at December 31, [removed: 2023:][added: 2024:]

| Navajo Southern System | | | [removed: 25.2] [added: 24.7] | | % |

| Four Corners Switchyards | | | [removed: 57.5] [added: 58.0] | | % |

| Palo Verde — Yuma 500kV System | | | [removed: 25.3] [added: 25.5] | | % |

In APS’s [removed: 2024] [added: 2025] Ten-Year Plan, APS projects it will develop [removed: 109] [added: 184] miles of new transmission lines over the next 10 years.

Additionally, APS plans to upgrade [removed: 730] [added: 687] miles of existing transmission lines over the same [removed: horizon.]

The [removed: 2024] [added: 2025] Ten-Year Plan includes a [removed: new] 28-mile 500kV line from the Jojoba substation to the Rudd substation.

Additionally, the [removed: 2024] [added: 2025] Ten-Year Plan includes the rebuild of both Four Corners to Pinnacle Peak 345kV lines which span 289 miles each.

The [removed: 2024] [added: 2025] Ten-Year Plan includes numerous projects with the purpose to interconnect new renewable energy resources to the transmission system.

| Arizona Nuclear Power Project 500kV System | | | 33.3 | | % |

horizon.

(d)Ocotillo Steam Units 1 and 2 were retired on January 10, 2019.

Units 3 through 7 all went into service on or prior to May 30, 2019, which increased generation capacity by 510 MW.

(e)APS is under contract and currently plans to add battery storage at these AZ Sun sites.

| ANPP 500kV System | | | 33.4 | | % |

The executive officers, their ages at February [removed: 27, 2024,] [added: 25, 2025,] current positions and principal occupations for the past five years are as follows:

| Name | | | [removed: | | |] Age | | | | | | Position | | | | | | Period | | |

| Jeffrey B. Guldner [removed: | | |] [added: (a)] | | | [removed: 58] [added: 59] | | | | | | Chairman of the Board, Chief Executive Officer and President of Pinnacle West | | | | | | 2019-Present | | |

| | | | | | | | | | [removed: | | |] Chairman of the Board and Chief Executive Officer of APS | | | | | | 2022-Present | | |

| | | | | | | | | | [removed: | | |] Chairman of the Board, Chief Executive Officer and President of APS | | | | | | 2021-2022 | | |

| | | | | | | | | | [removed: | | |] Chairman of the Board and Chief Executive Officer of APS | | | | | | 2020-2021 | | |

| | | | | | | | | | [removed: | | |] President of APS | | | | | | 2018-2020 | | |

| | | | | | | | | | [removed: | | |] Executive Vice President, Public Policy of Pinnacle West | | | | | | 2017-2019 | | |

| Elizabeth A. Blankenship | | | [removed: | | | 52] [added: 53] | | | | | | Vice President, Controller and Chief Accounting Officer of Pinnacle West and APS | | | | | | 2019-Present | | |

| | | | | | | | | | [removed: | | |] General Manager, Accounting Operations of APS | | | | | | 2019-2019 | | |

| | | | | | | | | | [removed: | | |] Director, Accounting Operations of APS | | | | | | 2014-2019 | | |

| Andrew D. Cooper | | | [removed: | | | 45] [added: 46] | | | | | | Senior Vice President and Chief Financial Officer of Pinnacle West and APS | | | | | | 2022-Present | | |

| | | | | | | | | | [removed: | | |] Vice President and Treasurer of Pinnacle West and APS | | | | | | 2020-2022 | | |

| | | | | | | | | | [removed: | | |] Director, Corporate Finance of Consolidated Edison Company of New York, Inc. | | | | | | 2017-2020 | | |

| Jose L. Esparza | | | [removed: | | | 49] [added: 50] | | | | | | Senior Vice President, Public Policy of APS | | | | | | 2022-Present | | |

| | | | | | | | | | [removed: | | |] Vice President, Regulatory of APS | | | | | | 2022 | | |

| | | | | | | | | | [removed: | | |] Officer and Senior Vice President, Customer Engagement and Information Technology of Southwest Gas | | | | | | 2019-2021 | | |

| | | | | | | | | | [removed: | | |] Vice President, Customer Engagement of Southwest Gas | | | | | | 2012-2019 | | |

| [removed: Theodore N. Geisler] | | | | | | [removed: 45] | | | [removed: | | |] President of APS | | | | | | 2022-Present | | |

| | | | | | | | | | [removed: | | |] Senior Vice President and Chief Financial Officer of Pinnacle West and APS | | | | | | 2020-2022 | | |

| | | | | | | | | | [removed: | | |] Vice President and Chief Information Officer of APS | | | | | | 2018-2020 | | |

| Adam C. Heflin | | | [removed: | | | 60] [added: 61] | | | | | | Executive Vice President and Chief Nuclear Officer, PVGS, of APS | | | | | | 2022-Present | | |

| | | | | | | | | | [removed: | | |] Chief Executive Officer of Wolf Creek Nuclear Operating Corporation | | | | | | 2014-2019 | | |

| Paul J. Mountain | | | [removed: | | | 46] [added: 47] | | | | | | Vice [removed: President] [added: President, Finance] and [removed: Treasurer] [added: Planning] of Pinnacle West and APS | | | | | | [removed: 2022-Present] [added: 2024-Present] | | |

| | | | | | | | | | [removed: | | |] Vice President, Finance and Planning of Pinnacle West and APS | | | | | | 2020-2022 | | |

| | | | | | | | | | [removed: | | |] General Manager, Finance of Pinnacle West | | | | | | 2017-2020 | | |

| [removed: Robert E. Smith] | | | | | | [removed: 54] | | | [removed: | | |] Executive Vice President, General Counsel and Chief Development Officer of Pinnacle West and APS | | | | | | [removed: 2021-Present] [added: 2021-2025] | | |

| | | | | | | | | | [removed: | | |] Senior Vice President and General Counsel of Pinnacle West and APS | | | | | | 2018-2021 | | |

| [removed: Jacob Tetlow] | | | | | | [removed: 51] | | | [removed: | | |] Executive Vice President, Operations of APS | | | | | | [removed: 2021-Present] [added: 2021-2024] | | |

| | | | | | | | | | [removed: | | |] Senior Vice President, Non-Nuclear Operations of APS | | | | | | 2020-2021 | | |

| | | | | | | | | | [removed: | | |] Vice President, Transmission and Distributions Operations of APS | | | | | | 2017-2020 | | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Theodore N. Geisler (a) | | | 46 | | | | | | President of APS, Director on the Pinnacle West and APS Boards of Directors | | | | | | 2024-Present | | |

| | | | | | | | | | Vice President, Finance and Treasurer of Pinnacle West and APS | | | | | | 2022-2024 | | |

| Robert E. Smith | | | 55 | | | | | | Executive Vice President, Chief Legal Officer and Chief Development Officer of Pinnacle West and APS | | | | | | 2025-Present | | |

| Jacob Tetlow | | | 52 | | | | | | Executive Vice President and Chief Operating Officer of APS | | | | | | 2024-Present | | |

(a) On December 12, 2024, Pinnacle West announced that Jeffrey B.

Guldner will retire from his position as Chairman of the Board, President, Chief Executive Officer and member of the Board of Directors of Pinnacle West and Chairman of the Board, Chief Executive Officer and member of the Board of Directors of APS, effective April 1, 2025.

On April 1, 2025, Theodore N.

Geisler will replace Mr. Guldner as Chairman of the Board, President, and Chief Executive Officer of Pinnacle West and Chairman of the Board and Chief Executive Officer of APS.

He will continue to serve as President of APS and as a director on the Pinnacle West and APS Boards of Directors.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

At the close of business on February [removed: 21, 2024,] [added: 20, 2025,] Pinnacle West’s common stock was held of record by approximately [removed: 14,476] [added: 13,686] shareholders.

At December 31, [removed: 2023,] [added: 2024,] APS did not have any outstanding preferred stock.

[Table of [removed: Contents](#i097d433795444a8ca6a05c463d1777c5_7)][added: Contents](#i4188daee47a2424f9b9f03a13cf73aab_7)]

This graph compares the cumulative total shareholder return on Pinnacle West’s common stock during the five years ended December 31, [removed: 2023,] [added: 2024,] to the cumulative total returns on the S&P 500 Index and the Edison Electric Index.

The comparison assumes that $100 was invested on December 31, [removed: 2018,] [added: 2019,] in Pinnacle West’s common stock and in each of the indices shown and that all of the dividends were reinvested.

[removed: ][added: ]

| Company/Index | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | |

| Pinnacle West Common Stock | | | | | | $100 | | | | | | $92 | | | | | | $85 | | | | | | $96 | | | | | | $95 | | | | | | $117 | | |

| Edison Electric Institute Index | | | | | | $100 | | | | | | $99 | | | | | | $116 | | | | | | $117 | | | | | | $107 | | | | | | $127 | | |

| S&P 500 Index | | | | | | $100 | | | | | | $118 | | | | | | $152 | | | | | | $125 | | | | | | $157 | | | | | | $197 | | |

| Pinnacle West Common Stock | | | | | | $100 | | | | | | $109 | | | | | | $101 | | | | | | $93 | | | | | | $105 | | | | | | $104 | | |

| Edison Electric Institute Index | | | | | | $100 | | | | | | $126 | | | | | | $124 | | | | | | $146 | | | | | | $147 | | | | | | $134 | | |

| S&P 500 Index | | | | | | $100 | | | | | | $131 | | | | | | $156 | | | | | | $200 | | | | | | $164 | | | | | | $207 | | |

| [Management’s Report on Internal Control over Financial Reporting (Pinnacle West Capital [removed: Corporation)](#i097d433795444a8ca6a05c463d1777c5_82)] [added: Corporation)](#i4188daee47a2424f9b9f03a13cf73aab_85)] | | | [removed: [89](#i097d433795444a8ca6a05c463d1777c5_82)] [added: [90](#i4188daee47a2424f9b9f03a13cf73aab_85)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i097d433795444a8ca6a05c463d1777c5_85)] [added: Firm](#i4188daee47a2424f9b9f03a13cf73aab_88)] (PCAOB ID No. 34) | | | [removed: [90](#i097d433795444a8ca6a05c463d1777c5_85)] [added: [91](#i4188daee47a2424f9b9f03a13cf73aab_88)] | | |

| [Pinnacle West Consolidated Statements of Income for [removed: 202](#i097d433795444a8ca6a05c463d1777c5_88)[3](#i097d433795444a8ca6a05c463d1777c5_88)[, 202](#i097d433795444a8ca6a05c463d1777c5_88)[2](#i097d433795444a8ca6a05c463d1777c5_88) [and](#i097d433795444a8ca6a05c463d1777c5_88) [2021](#i097d433795444a8ca6a05c463d1777c5_88)] [added: 20](#i4188daee47a2424f9b9f03a13cf73aab_91)[24](#i4188daee47a2424f9b9f03a13cf73aab_91)[, 20](#i4188daee47a2424f9b9f03a13cf73aab_91)[23](#i4188daee47a2424f9b9f03a13cf73aab_91) [and 20](#i4188daee47a2424f9b9f03a13cf73aab_91)[22](#i4188daee47a2424f9b9f03a13cf73aab_91)] | | | [removed: [94](#i097d433795444a8ca6a05c463d1777c5_88)] [added: [95](#i4188daee47a2424f9b9f03a13cf73aab_91)] | | |

| [Pinnacle West Consolidated Statements of Comprehensive Income for [removed: 202](#i097d433795444a8ca6a05c463d1777c5_91)[3](#i097d433795444a8ca6a05c463d1777c5_91)[, 202](#i097d433795444a8ca6a05c463d1777c5_91)[2](#i097d433795444a8ca6a05c463d1777c5_91) [and](#i097d433795444a8ca6a05c463d1777c5_91) [2021](#i097d433795444a8ca6a05c463d1777c5_91)] [added: 20](#i4188daee47a2424f9b9f03a13cf73aab_94)[24](#i4188daee47a2424f9b9f03a13cf73aab_94)[, 20](#i4188daee47a2424f9b9f03a13cf73aab_94)[23](#i4188daee47a2424f9b9f03a13cf73aab_94) [and 20](#i4188daee47a2424f9b9f03a13cf73aab_94)[22](#i4188daee47a2424f9b9f03a13cf73aab_94)] | | | [removed: [95](#i097d433795444a8ca6a05c463d1777c5_91)] [added: [96](#i4188daee47a2424f9b9f03a13cf73aab_94)] | | |

| [Pinnacle West Consolidated Balance Sheets as of December 31, [removed: 202](#i097d433795444a8ca6a05c463d1777c5_94)[3](#i097d433795444a8ca6a05c463d1777c5_94) [and](#i097d433795444a8ca6a05c463d1777c5_94) [2022](#i097d433795444a8ca6a05c463d1777c5_94)] [added: 20](#i4188daee47a2424f9b9f03a13cf73aab_97)[24](#i4188daee47a2424f9b9f03a13cf73aab_97) [and 20](#i4188daee47a2424f9b9f03a13cf73aab_97)[23](#i4188daee47a2424f9b9f03a13cf73aab_97)] | | | [removed: [96](#i097d433795444a8ca6a05c463d1777c5_94)] [added: [97](#i4188daee47a2424f9b9f03a13cf73aab_97)] | | |

| [Pinnacle West Consolidated Statements of Cash Flows [removed: for](#i097d433795444a8ca6a05c463d1777c5_97) [2023](#i097d433795444a8ca6a05c463d1777c5_97)[, 202](#i097d433795444a8ca6a05c463d1777c5_97)[2](#i097d433795444a8ca6a05c463d1777c5_97) [and](#i097d433795444a8ca6a05c463d1777c5_97) [2021](#i097d433795444a8ca6a05c463d1777c5_97)] [added: for 20](#i4188daee47a2424f9b9f03a13cf73aab_100)[24](#i4188daee47a2424f9b9f03a13cf73aab_100)[, 20](#i4188daee47a2424f9b9f03a13cf73aab_100)[23](#i4188daee47a2424f9b9f03a13cf73aab_100) [and 20](#i4188daee47a2424f9b9f03a13cf73aab_100)[22](#i4188daee47a2424f9b9f03a13cf73aab_100)] | | | [removed: [98](#i097d433795444a8ca6a05c463d1777c5_97)] [added: [99](#i4188daee47a2424f9b9f03a13cf73aab_100)] | | |

| [Pinnacle West Consolidated Statements of Changes in Equity for [removed: 202](#i097d433795444a8ca6a05c463d1777c5_100)[3](#i097d433795444a8ca6a05c463d1777c5_100)[, 202](#i097d433795444a8ca6a05c463d1777c5_100)[2](#i097d433795444a8ca6a05c463d1777c5_100) [and](#i097d433795444a8ca6a05c463d1777c5_100) [2021](#i097d433795444a8ca6a05c463d1777c5_100)] [added: 20](#i4188daee47a2424f9b9f03a13cf73aab_103)[24](#i4188daee47a2424f9b9f03a13cf73aab_103)[, 20](#i4188daee47a2424f9b9f03a13cf73aab_103)[23](#i4188daee47a2424f9b9f03a13cf73aab_103) [and 20](#i4188daee47a2424f9b9f03a13cf73aab_103)[22](#i4188daee47a2424f9b9f03a13cf73aab_103)] | | | [removed: [99](#i097d433795444a8ca6a05c463d1777c5_100)] [added: [100](#i4188daee47a2424f9b9f03a13cf73aab_103)] | | |

| [Management’s Report on Internal Control over Financial Reporting (Arizona Public Service [removed: Company)](#i097d433795444a8ca6a05c463d1777c5_106)] [added: Company)](#i4188daee47a2424f9b9f03a13cf73aab_109)] | | | [removed: [100](#i097d433795444a8ca6a05c463d1777c5_106)] [added: [101](#i4188daee47a2424f9b9f03a13cf73aab_109)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i097d433795444a8ca6a05c463d1777c5_109)] [added: Firm](#i4188daee47a2424f9b9f03a13cf73aab_112)] (PCAOB ID No. 34) | | | [removed: [101](#i097d433795444a8ca6a05c463d1777c5_109)] [added: [102](#i4188daee47a2424f9b9f03a13cf73aab_112)] | | |

| [APS Consolidated Statements of Income [removed: for](#i097d433795444a8ca6a05c463d1777c5_112) [2023,](#i097d433795444a8ca6a05c463d1777c5_112) [2022](#i097d433795444a8ca6a05c463d1777c5_112) [and](#i097d433795444a8ca6a05c463d1777c5_112) [2021](#i097d433795444a8ca6a05c463d1777c5_112)] [added: for 20](#i4188daee47a2424f9b9f03a13cf73aab_115)[24](#i4188daee47a2424f9b9f03a13cf73aab_115)[, 20](#i4188daee47a2424f9b9f03a13cf73aab_115)[23](#i4188daee47a2424f9b9f03a13cf73aab_115) [and 20](#i4188daee47a2424f9b9f03a13cf73aab_115)[22](#i4188daee47a2424f9b9f03a13cf73aab_115)] | | | [removed: [105](#i097d433795444a8ca6a05c463d1777c5_112)] [added: [106](#i4188daee47a2424f9b9f03a13cf73aab_115)] | | |

| [APS Consolidated Statements of Comprehensive Income [removed: for](#i097d433795444a8ca6a05c463d1777c5_115) [2023,](#i097d433795444a8ca6a05c463d1777c5_115) [2022](#i097d433795444a8ca6a05c463d1777c5_115) [and](#i097d433795444a8ca6a05c463d1777c5_115) [2021](#i097d433795444a8ca6a05c463d1777c5_115)] [added: for 20](#i4188daee47a2424f9b9f03a13cf73aab_118)[24](#i4188daee47a2424f9b9f03a13cf73aab_118)[, 20](#i4188daee47a2424f9b9f03a13cf73aab_118)[23](#i4188daee47a2424f9b9f03a13cf73aab_118) [and 20](#i4188daee47a2424f9b9f03a13cf73aab_118)[22](#i4188daee47a2424f9b9f03a13cf73aab_118)] | | | [removed: [106](#i097d433795444a8ca6a05c463d1777c5_115)] [added: [107](#i4188daee47a2424f9b9f03a13cf73aab_118)] | | |

| [APS Consolidated Balance Sheets as of December [removed: 31,](#i097d433795444a8ca6a05c463d1777c5_118) [2023 and](#i097d433795444a8ca6a05c463d1777c5_118) [2022](#i097d433795444a8ca6a05c463d1777c5_118)] [added: 31, 20](#i4188daee47a2424f9b9f03a13cf73aab_121)[24](#i4188daee47a2424f9b9f03a13cf73aab_121) [and 20](#i4188daee47a2424f9b9f03a13cf73aab_121)[23](#i4188daee47a2424f9b9f03a13cf73aab_121)] | | | [removed: [107](#i097d433795444a8ca6a05c463d1777c5_118)] [added: [108](#i4188daee47a2424f9b9f03a13cf73aab_121)] | | |

| [APS Consolidated Statements of Cash Flows [removed: for](#i097d433795444a8ca6a05c463d1777c5_121) [2023,](#i097d433795444a8ca6a05c463d1777c5_121) [2022](#i097d433795444a8ca6a05c463d1777c5_121) [and](#i097d433795444a8ca6a05c463d1777c5_121) [2021](#i097d433795444a8ca6a05c463d1777c5_121)] [added: for 20](#i4188daee47a2424f9b9f03a13cf73aab_124)[24](#i4188daee47a2424f9b9f03a13cf73aab_124)[, 20](#i4188daee47a2424f9b9f03a13cf73aab_124)[23](#i4188daee47a2424f9b9f03a13cf73aab_124) [and 20](#i4188daee47a2424f9b9f03a13cf73aab_124)[22](#i4188daee47a2424f9b9f03a13cf73aab_124)] | | | [removed: [109](#i097d433795444a8ca6a05c463d1777c5_121)] [added: [110](#i4188daee47a2424f9b9f03a13cf73aab_124)] | | |

| [APS Consolidated Statements of Changes in Equity [removed: for](#i097d433795444a8ca6a05c463d1777c5_124) [2023](#i097d433795444a8ca6a05c463d1777c5_124)[,](#i097d433795444a8ca6a05c463d1777c5_124) [2022](#i097d433795444a8ca6a05c463d1777c5_124) [and](#i097d433795444a8ca6a05c463d1777c5_124) [2021](#i097d433795444a8ca6a05c463d1777c5_124)] [added: for 20](#i4188daee47a2424f9b9f03a13cf73aab_127)[24](#i4188daee47a2424f9b9f03a13cf73aab_127)[, 20](#i4188daee47a2424f9b9f03a13cf73aab_127)[23](#i4188daee47a2424f9b9f03a13cf73aab_127) [and 20](#i4188daee47a2424f9b9f03a13cf73aab_127)[22](#i4188daee47a2424f9b9f03a13cf73aab_127)] | | | [removed: [110](#i097d433795444a8ca6a05c463d1777c5_124)] [added: [111](#i4188daee47a2424f9b9f03a13cf73aab_127)] | | |

[removed: | [Combined Notes to Consolidated Financial Statements](#i097d433795444a8ca6a05c463d1777c5_130) | | | [111](#i097d433795444a8ca6a05c463d1777c5_130) | | |][added: COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS]

| [Note 1. Summary of Significant Accounting [removed: Policies](#i097d433795444a8ca6a05c463d1777c5_130)] [added: Policies](#i4188daee47a2424f9b9f03a13cf73aab_3230)] | | | [removed: [111](#i097d433795444a8ca6a05c463d1777c5_130)] [added: [112](#i4188daee47a2424f9b9f03a13cf73aab_3230)] | | |

| [Note 5. Lines of Credit and Short-Term [removed: Borrowings](#i097d433795444a8ca6a05c463d1777c5_142)] [added: Borrowings](#i4188daee47a2424f9b9f03a13cf73aab_3395)] | | | [removed: [145](#i097d433795444a8ca6a05c463d1777c5_142)] [added: [143](#i4188daee47a2424f9b9f03a13cf73aab_3395)] | | |

| [Note 6. Long-Term Debt and Liquidity [removed: Matters](#i097d433795444a8ca6a05c463d1777c5_145)] [added: Matters](#i4188daee47a2424f9b9f03a13cf73aab_148)] | | | [removed: [147](#i097d433795444a8ca6a05c463d1777c5_145)] [added: [145](#i4188daee47a2424f9b9f03a13cf73aab_148)] | | |

| [Note 7. Retirement Plans and Other Postretirement [removed: Benefits](#i097d433795444a8ca6a05c463d1777c5_148)] [added: Benefits](#i4188daee47a2424f9b9f03a13cf73aab_151)] | | | [removed: [151](#i097d433795444a8ca6a05c463d1777c5_148)] [added: [150](#i4188daee47a2424f9b9f03a13cf73aab_151)] | | |

| [Note 9. Jointly-Owned [removed: Facilities](#i097d433795444a8ca6a05c463d1777c5_154)] [added: Facilities](#i4188daee47a2424f9b9f03a13cf73aab_157)] | | | [removed: [163](#i097d433795444a8ca6a05c463d1777c5_154)] [added: [162](#i4188daee47a2424f9b9f03a13cf73aab_157)] | | |

| [Note 10. Commitments and [removed: Contingencies](#i097d433795444a8ca6a05c463d1777c5_157)] [added: Contingencies](#i4188daee47a2424f9b9f03a13cf73aab_160)] | | | [removed: [164](#i097d433795444a8ca6a05c463d1777c5_157)] [added: [163](#i4188daee47a2424f9b9f03a13cf73aab_160)] | | |

| [Note 11. Asset Retirement [removed: Obligations](#i097d433795444a8ca6a05c463d1777c5_163)] [added: Obligations](#i4188daee47a2424f9b9f03a13cf73aab_166)] | | | [removed: [173](#i097d433795444a8ca6a05c463d1777c5_163)] [added: [172](#i4188daee47a2424f9b9f03a13cf73aab_166)] | | |

| [Note 12. Fair Value [removed: Measurements](#i097d433795444a8ca6a05c463d1777c5_166)] [added: Measurements](#i4188daee47a2424f9b9f03a13cf73aab_3748)] | | | [removed: [174](#i097d433795444a8ca6a05c463d1777c5_166)] [added: [174](#i4188daee47a2424f9b9f03a13cf73aab_3748)] | | |

| [Note 13. [added: Common Stock Equity and] Earnings Per [removed: Share](#i097d433795444a8ca6a05c463d1777c5_169)] [added: Share](#i4188daee47a2424f9b9f03a13cf73aab_172)] | | | [removed: [180](#i097d433795444a8ca6a05c463d1777c5_169)] [added: [180](#i4188daee47a2424f9b9f03a13cf73aab_172)] | | |

| [Note 14. Stock-Based [removed: Compensation](#i097d433795444a8ca6a05c463d1777c5_172)] [added: Compensation](#i4188daee47a2424f9b9f03a13cf73aab_175)] | | | [removed: [180](#i097d433795444a8ca6a05c463d1777c5_172)] [added: [182](#i4188daee47a2424f9b9f03a13cf73aab_175)] | | |

| [Note 15. Derivative [removed: Accounting](#i097d433795444a8ca6a05c463d1777c5_175)] [added: Accounting](#i4188daee47a2424f9b9f03a13cf73aab_178)] | | | [removed: [184](#i097d433795444a8ca6a05c463d1777c5_175)] [added: [185](#i4188daee47a2424f9b9f03a13cf73aab_178)] | | |

| [Note 16. Other Income and Other [removed: Expense](#i097d433795444a8ca6a05c463d1777c5_178)] [added: Expense](#i4188daee47a2424f9b9f03a13cf73aab_181)] | | | [removed: [188](#i097d433795444a8ca6a05c463d1777c5_178)] [added: [189](#i4188daee47a2424f9b9f03a13cf73aab_181)] | | |

| [Note 18. Investments in Nuclear Decommissioning Trusts and Other Special Use [removed: Funds](#i097d433795444a8ca6a05c463d1777c5_187)] [added: Funds](#i4188daee47a2424f9b9f03a13cf73aab_190)] | | | [removed: [189](#i097d433795444a8ca6a05c463d1777c5_187)] [added: [192](#i4188daee47a2424f9b9f03a13cf73aab_190)] | | |

| [Note 19. Changes in Accumulated Other Comprehensive [removed: Loss](#i097d433795444a8ca6a05c463d1777c5_190)] [added: Loss](#i4188daee47a2424f9b9f03a13cf73aab_193)] | | | [removed: [193](#i097d433795444a8ca6a05c463d1777c5_190)] [added: [195](#i4188daee47a2424f9b9f03a13cf73aab_193)] | | |

| [Note 20. Sale of Bright Canyon [removed: Energy](#i097d433795444a8ca6a05c463d1777c5_2136)] [added: Energy](#i4188daee47a2424f9b9f03a13cf73aab_199)] | | | [removed: [194](#i097d433795444a8ca6a05c463d1777c5_2136)] [added: [196](#i4188daee47a2424f9b9f03a13cf73aab_199)] | | |

| [Note 21. New Accounting [removed: Standards](#i097d433795444a8ca6a05c463d1777c5_196)] [added: Standards](#i4188daee47a2424f9b9f03a13cf73aab_202)] | | | [removed: [195](#i097d433795444a8ca6a05c463d1777c5_196)] [added: [197](#i4188daee47a2424f9b9f03a13cf73aab_202)] | | |

Based on our evaluation under the framework in *Internal Control — Integrated Framework (2013),* our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2023.][added: 2024.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report which is included herein and also relates to the Company’s consolidated financial statements.

We have audited the accompanying consolidated balance sheets of Pinnacle West Capital Corporation and subsidiaries (the “Company”) as of December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] the related consolidated statements of income, comprehensive income, changes in equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2023,] [added: 2024,] in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2023,] [added: 2024,] based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

Decisions to be made by the ACC in the future will impact the accounting for regulated operations, including decisions about the amount of allowable deferred costs and [removed: return on invested capital included in rates and any refunds that may be required.]

[added: While the Company has] indicated it expects to recover costs from customers through regulated rates, there is a risk that the ACC will not approve: (1) full recovery of the costs of providing utility service, or (2) full recovery of all amounts invested in the utility business and a reasonable return on that investment.

Management judgments include continually assessing the likelihood of future recovery of regulatory assets and/or a disallowance of part of the cost of recently completed plant, by considering factors such as [added: applicable] regulatory environment changes, and recent rate orders specific to APS and to other regulated entities in the same jurisdiction.

| [Combined Notes to Consolidated Financial Statements](#i4188daee47a2424f9b9f03a13cf73aab_130) | | | [112](#i4188daee47a2424f9b9f03a13cf73aab_130) | | |

| [Note 2. Revenue](#i4188daee47a2424f9b9f03a13cf73aab_136) | | | [122](#i4188daee47a2424f9b9f03a13cf73aab_136) | | |

| [Note 3. Regulatory Matters](#i4188daee47a2424f9b9f03a13cf73aab_139) | | | [123](#i4188daee47a2424f9b9f03a13cf73aab_139) | | |

| [Note 4. Income Taxes](#i4188daee47a2424f9b9f03a13cf73aab_3309) | | | [138](#i4188daee47a2424f9b9f03a13cf73aab_3309) | | |

| [Note 8. Leases](#i4188daee47a2424f9b9f03a13cf73aab_154) | | | [158](#i4188daee47a2424f9b9f03a13cf73aab_154) | | |

| [Note 17. Variable Interest Entities](#i4188daee47a2424f9b9f03a13cf73aab_187) | | | [190](#i4188daee47a2424f9b9f03a13cf73aab_187) | | |

February 25, 2025

◦We read the ACC’s approved decision regarding the 2022 Retail Rate Case.

◦We read and analyzed the minutes of the Boards of Directors of the Company for discussions of changes in legal, regulatory, or business factors which could impact

management’s conclusions with respect to the financial statement impacts of rate regulation.

February 25, 2025

| | | | 2024 | | | | | | 2023 | | |

| | | | 2024 | | | | | | 2023 | | |

| Net Income | | | $ | 626,030 | | | | | $ | 518,781 | | | | | $ | 500,826 | |

| Short-term debt borrowings under term loan facility | | | 550,000 | | | | | | — | | | | | | — | | |

| Short-term debt repayments under term loan facility | | | (350,000) | | | | | | — | | | | | | — | | |

| Net income | | | | | | | | | — | | | | | | | | | | | | — | | | | | | 608,806 | | | | | | — | | | | | | 17,224 | | | | | | 626,030 | | |

| Issuance of common stock (b) | | | 5,606,093 | | | | | | 368,941 | | | | | | | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | 368,941 | | |

| Balance, December 31, 2024 | | | 119,143,782 | | | | | | $ | 3,121,617 | | | | | (46,968) | | | | | | $ | (3,323) | | | | | $ | 3,666,959 | | | | | $ | (30,942) | | | | | $ | 103,167 | | | | | $ | 6,857,478 | |

(b) See Note 13 for information related to our equity forward sale agreements that were executed in February 2024 and November 2024.

As of December 31, 2024, 5,377,115 shares of common stock have been issued as part of these agreements.

February 25, 2025

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

return on invested capital included in rates and any refunds that may be required.

We evaluated the external information, regulatory orders and filings, and compared to management’s recorded regulatory assets and liabilities for completeness.

◦We read the ACC’s approved decision regarding the 2022 Retail Rate Case.

◦We obtained the Company’s internally prepared memo concluding on the impacts of the ACC’s approved decision regarding the 2022 Retail Rate Case on rates and recorded regulatory balances.

◦We read and analyzed the minutes of the Boards of Directors of the Company for discussions of changes in legal, regulatory, or business factors which could impact

management’s conclusions with respect to the financial statement impacts of rate regulation.

We read the minutes of the Boards of Directors of the Company for discussions of changes in legal, regulatory, or business factors which could impact management’s assessment.

February 25, 2025

| OPERATING REVENUES (Note 2) | | | $ | 5,124,915 | | | | | $ | 4,695,991 | | | | | $ | 4,324,385 | |

| Fuel and purchased power | | | 1,822,566 | | | | | | 1,792,657 | | | | | | 1,629,343 | | |

| Allowance for equity funds used during construction (Note 1) | | | 38,620 | | | | | | 53,118 | | | | | | 45,263 | | |

| | | | 2024 | | | | | | 2023 | | |

| Palo Verde sale leaseback, net of accumulated depreciation of $268,894 and $264,624 (Note 17) | | | 82,556 | | | | | | 86,426 | | |

| Nuclear fuel, net of accumulated amortization of $115,894 and $118,074 | | | 97,850 | | | | | | 99,490 | | |

| Nuclear decommissioning trusts (Notes 12 and 18) | | | 1,282,845 | | | | | | 1,201,246 | | |

| [Note 2. Revenue](#i097d433795444a8ca6a05c463d1777c5_133) | | | [119](#i097d433795444a8ca6a05c463d1777c5_133) | | |

| [Note 3. Regulatory Matters](#i097d433795444a8ca6a05c463d1777c5_136) | | | [121](#i097d433795444a8ca6a05c463d1777c5_136) | | |

| [Note 4. Income Taxes](#i097d433795444a8ca6a05c463d1777c5_139) | | | [140](#i097d433795444a8ca6a05c463d1777c5_139) | | |

| [Note 8. Leases](#i097d433795444a8ca6a05c463d1777c5_151) | | | [159](#i097d433795444a8ca6a05c463d1777c5_151) | | |

| [Note 17. Palo Verde Sale Leaseback Variable Interest Entities](#i097d433795444a8ca6a05c463d1777c5_184) | | | [189](#i097d433795444a8ca6a05c463d1777c5_184) | | |

February 27, 2024

While the Company has

- We observed the ACC Open Meeting during which the Recommended Order and Opinion regarding the 2022 Retail Rate Case was amended and approved and read the approved 2022 Rate Case Recommended Order and Opinion as amended.

We read the minutes of the Boards of

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance, December 31, 2020 | | | 112,760,051 | | | | | | $ | 2,677,482 | | | | | (72,006) | | | | | | $ | (6,289) | | | | | $ | 3,025,106 | | | | | $ | (62,796) | | | | | $ | 119,290 | | | | | $ | 5,752,793 | |

| Net income | | | | | | | | | — | | | | | | | | | | | | — | | | | | | 618,720 | | | | | | — | | | | | | 17,224 | | | | | | 635,944 | | |

| Issuance of common stock | | | 254,477 | | | | | | 25,261 | | | | | | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 25,261 | | |

| Balance, December 31, 2020 | | | 71,264,947 | | | | | | $ | 178,162 | | | | | $ | 2,871,696 | | | | | $ | 3,216,955 | | | | | $ | (40,918) | | | | | $ | 119,290 | | | | | $ | 6,345,185 | |

| Net income | | | | | | | | | — | | | | | | — | | | | | | 632,279 | | | | | | — | | | | | | 17,224 | | | | | | 649,503 | | |

| Other | | | | | | | | | — | | | | | | — | | | | | | 1 | | | | | | — | | | | | | 1 | | | | | | 2 | | |

As of December 31, 2023, the captive cell’s activities are insignificant to our consolidated financial statements.

Our consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments, except as otherwise disclosed in the notes) that we believe are necessary for the fair presentation of our financial position, results of operations and cash flows for the periods presented.

those estimates.

To conform with the current year’s disaggregated presentation of significant changes in assets and liabilities and the aggregation of less significant changes in assets and liabilities, we made certain reclassifications for the year ended December 31, 2022, within the operating activities section of our Consolidated Statements of Cash Flows.

Both the debt and equity

information, or prices provided by other external sources.

Our incremental borrowing rate is based on the rate of interest we

Contract Assets and Liabilities from Contracts with Customers

There were no material contract assets, contract liabilities, or deferred contract costs recorded on the Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022.

collection policies, and management’s best estimate of future collections success.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

This Day 1 net impact represents a total base revenue deficiency of $772 million offset by proposed adjustor transfers of cost recovery to annual retail rates and adjustor mechanism modifications.

The average annual customer bill impact of APS’s request on Day 1 is an increase of 13.6%.

The principal provisions of APS’s application were:

- a test year comprised of twelve months ended June 30, 2022, adjusted as described below;

- an original cost rate base of $10.5 billion, which approximates the ACC-jurisdictional portion of the book value of utility assets, net of accumulated depreciation and other credits;

- the following proposed capital structure and costs of capital:

| | | | | | | | | | Capital Structure | | | | | | Cost of Capital | | |

| Long-term debt | | | | | | | | | 48.07 | | % | | | | 3.85 | | % |

| Common stock equity | | | | | | | | | 51.93 | | % | | | | 10.25 | | % |

Pinnacle West’s management, with the participation of Pinnacle West’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of Pinnacle West’s disclosure controls and procedures as of December 31, [removed: 2023.][added: 2024.]

APS’s management, with the participation of APS’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of APS’s disclosure controls and procedures as of December 31, [removed: 2023.][added: 2024.]

No change in Pinnacle West’s or APS’s internal control over financial reporting occurred during the fiscal quarter ended December 31, [removed: 2023,] [added: 2024,] that materially affected, or is reasonably likely to materially affect, Pinnacle West’s or APS’s internal control over financial reporting.

During the fiscal quarter ended December 31, [removed: 2023,] [added: 2024,] none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

Reference is hereby made to “Information About Our Board and Corporate Governance” and “Proposal 1 — Election of Directors” in the Pinnacle West Proxy Statement relating to the Annual Meeting of Shareholders to be held on May [removed: 22, 2024] [added: 21, 2025] (the [removed: “2024] [added: “2025] Proxy Statement”) and to the “Information about our Executive Officers” section in Part I of this report.

Pinnacle West has adopted an insider trading policy governing the purchase, sale, and/or other dispositions of its securities by directors, officers and employees, and Pinnacle West itself, that Pinnacle West believes are reasonably designed to promote compliance with insider trading laws, rules and regulations, and New York Stock Exchange listing standards.

This policy is set forth in our Securities Trading Policy included as Exhibit 19.1 to this report.

Reference is hereby made to “Director Compensation,” “Executive Compensation,” and “Human Resources Committee Interlocks and Insider Participation” in the [removed: 2024] [added: 2025] Proxy Statement.

Reference is hereby made to “Ownership of Pinnacle West Stock” in the [removed: 2024] [added: 2025] Proxy Statement.

The following table sets forth information as of December 31, [removed: 2023,] [added: 2024,] with respect to the 2021 Plan, 2012 Plan, the 2007 Plan, under which our equity securities are outstanding or currently authorized for issuance.

| Equity compensation plans approved by security holders | | | [removed: 1,485,075] [added: 1,632,699] | | | | | | — | | | | | | [removed: 3,535,951] [added: 2,941,625] | | |

| Total | | | 1,632,699 | | | | | | — | | | | | | 2,941,625 | | |

| Total | | | 1,485,075 | | | | | | — | | | | | | 3,535,951 | | |

Reference is hereby made to “Information About Our Board and Corporate Governance” and “Related Party Transactions” in the [removed: 2024] [added: 2025] Proxy Statement.

Reference is hereby made to “Audit Matters — Audit Fees and — Pre-Approval Policies” in the [removed: 2024] [added: 2025] Proxy Statement.

| Type of Service | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | |

| Audit Fees (1) | | | | | | $ | [removed: 2,707,633] [added: 2,967,862] | | | | | $ | [removed: 2,653,737] [added: 2,707,633] | |

| Audit-Related Fees (2) | | | | | | [removed: 372,040] [added: 384,372] | | | | | | [removed: 498,167] [added: 372,040] | | |

| All Other Fees (3) | | | | | | [removed: 1,672,676] [added: —] | | | | | | [removed: —] [added: 1,672,676] | | |

(2) The aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the financial statements and are not included in Audit Fees reported above, which primarily consist of fees for employee benefit plan audits in [removed: 2022 and] 2023 and [removed: environmental, social and governance assurance readiness performed in 2022.][added: 2024.]

All of the services performed by Deloitte & Touche LLP for APS in [removed: 2023] [added: 2024] were pre-approved by the Audit Committee or the Chair consistent with the pre-approval policy.

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as [removed: Exhibit: a] [added: Exhibit: a] | | | | | | Date Filed | | |

| 3.1 | | | | | | Pinnacle West | | | | | | [Articles of Incorporation, restated as of May 21, [removed: 2008](http://www.sec.gov/Archives/edgar/data/7286/000095015308001386/p76062exv3w1.htm)] [added: 2008](https://www.sec.gov/Archives/edgar/data/7286/000095015308001386/p76062exv3w1.htm)] | | | | | | 3.1 to Pinnacle West/APS June 30, 2008 Form 10-Q Report, File No. 1-8962 | | | | | | 8/7/2008 | | |

| 3.3(1) | | | | | | APS | | | | | | [Amendment to the Articles of Incorporation of Arizona Public Service Company, amended May 16, [removed: 2012](http://www.sec.gov/Archives/edgar/data/7286/000110465912039100/a12-12612_1ex3d1.htm)] [added: 2012](https://www.sec.gov/Archives/edgar/data/7286/000110465912039100/a12-12612_1ex3d1.htm)] | | | | | | 3.1 to Pinnacle West/APS May 22, 2012 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 5/22/2012 | | |

| 3.4 | | | | | | APS | | | | | | [Arizona Public Service Company Bylaws, amended as of December 16, [removed: 2008](http://www.sec.gov/Archives/edgar/data/7286/000095013409003359/p14106exv3w4.htm)] [added: 2008](https://www.sec.gov/Archives/edgar/data/7286/000095013409003359/p14106exv3w4.htm)] | | | | | | 3.4 to Pinnacle West/APS December 31, 2008 Form 10-K Report, File No. 1-4473 | | | | | | 2/20/2009 | | |

| 4.1 | | | | | | Pinnacle West | | | | | | [Specimen Certificate of Pinnacle West Capital Corporation Common Stock, no par [removed: value](http://www.sec.gov/Archives/edgar/data/764622/000076462217000044/a8kstockcertificatespeci.htm)] [added: value](https://www.sec.gov/Archives/edgar/data/764622/000076462217000044/a8kstockcertificatespeci.htm)] | | | | | | 4.1 to Pinnacle West June 20, 2017 Form 8-K Report, File No. 1-8962 | | | | | | 6/20/2017 | | |

| 4.2 | | | | | | Pinnacle West APS | | | | | | [Indenture dated as of January 1, 1995 among APS and The Bank of New York Mellon, as [removed: Trustee](http://www.sec.gov/Archives/edgar/data/7286/0000950147-95-000002.txt)] [added: Trustee](https://www.sec.gov/Archives/edgar/data/7286/0000950147-95-000002.txt)] | | | | | | 4.6 to APS’s Registration Statement Nos. 33-61228 and 33-55473 by means of January 1, 1995 Form 8-K Report, File No. 1-4473 | | | | | | 1/11/1995 | | |

| 4.3 | | | | | | Pinnacle West APS | | | | | | [Indenture dated as of November 15, 1996 between APS and The Bank of New York, as [removed: Trustee](http://www.sec.gov/Archives/edgar/data/7286/0000950147-96-000580.txt)] [added: Trustee](https://www.sec.gov/Archives/edgar/data/7286/0000950147-96-000580.txt)] | | | | | | 4.5 to APS’s Registration Statements Nos. 33-61228, 33-55473, 33-64455 and 333-15379 by means of November 19, 1996 Form 8-K Report, File No. 1-4473 | | | | | | 11/22/1996 | | |

| 4.4 | | | | | | Pinnacle West | | | | | | [Indenture dated as of December 1, 2000 between the Company and The Bank of New York, as Trustee, relating to Senior Unsecured Debt [removed: Securities](http://www.sec.gov/Archives/edgar/data/764622/000095014700500305/ex4_1.txt)] [added: Securities](https://www.sec.gov/Archives/edgar/data/764622/000095014700500305/ex4_1.txt)] | | | | | | 4.1 to Pinnacle West’s Registration Statement No. 333-52476 | | | | | | 12/21/2000 | | |

| 4.5 | | | | | | Pinnacle West | | | | | | [Indenture dated as of December 1, 2000 between the Company and The Bank of New York, as Trustee, relating to Subordinated Unsecured Debt [removed: Securities](http://www.sec.gov/Archives/edgar/data/764622/000095014700500305/ex4_2.txt)] [added: Securities](https://www.sec.gov/Archives/edgar/data/764622/000095014700500305/ex4_2.txt)] | | | | | | 4.2 to Pinnacle West’s Registration Statement No. 333-52476 | | | | | | 12/21/2000 | | |

| 4.6 | | | | | | Pinnacle West APS | | | | | | [Indenture dated as of January 15, 1998 between APS and The Bank of New York Mellon Trust Company N.A. (successor to JPMorgan Chase Bank, N.A., formerly known as The Chase Manhattan Bank), as [removed: Trustee](http://www.sec.gov/Archives/edgar/data/7286/0000950147-98-000031.txt)] [added: Trustee](https://www.sec.gov/Archives/edgar/data/7286/0000950147-98-000031.txt)] | | | | | | 4.10 to APS’s Registration Statement Nos. 333-15379 and 333-27551 by means of January 13, 1998 Form 8-K Report, File No. 1-4473 | | | | | | 1/16/1998 | | |

| 4.6(a) | | | | | | Pinnacle West APS | | | | | | [Seventh Supplemental Indenture dated as of May 1, [removed: 2003](http://www.sec.gov/Archives/edgar/data/7286/000095014703000593/ex4-1.txt)] [added: 2003](https://www.sec.gov/Archives/edgar/data/7286/000095014703000593/ex4-1.txt)] | | | | | | 4.1 to APS’s Registration Statement No. 333-90824 by means of May 7, 2003 Form 8-K Report, File No. 1-4473 | | | | | | 5/9/2003 | | |

| 4.6(b) | | | | | | Pinnacle West APS | | | | | | [Ninth Supplemental Indenture dated as of August 15, [removed: 2005](http://www.sec.gov/Archives/edgar/data/7286/000095015305002105/p71111exv4w1.htm)] [added: 2005](https://www.sec.gov/Archives/edgar/data/7286/000095015305002105/p71111exv4w1.htm)] | | | | | | 4.1 to APS’s Registration Statements Nos. 333-106772 and 333-121512 by means of August 17, 2005 Form 8-K Report, File No. 1-4473 | | | | | | 8/22/2005 | | |

| 4.6(c) | | | | | | APS | | | | | | [Tenth Supplemental Indenture dated as of August 1, [removed: 2006](http://www.sec.gov/Archives/edgar/data/7286/000095015306002013/p72693exv4w1.htm)] [added: 2006](https://www.sec.gov/Archives/edgar/data/7286/000095015306002013/p72693exv4w1.htm)] | | | | | | 4.1 to APS’s July 31, 2006 Form 8-K Report, File No. 1-4473 | | | | | | 8/3/2006 | | |

| 4.6(d) | | | | | | Pinnacle West APS | | | | | | [Twelfth Supplemental Indenture dated as of August 25, [removed: 2011](http://www.sec.gov/Archives/edgar/data/7286/000076462215000013/exhibit46f.htm)] [added: 2011](https://www.sec.gov/Archives/edgar/data/7286/000076462215000013/exhibit46f.htm)] | | | | | | 4.6f to Pinnacle West/APS 2014 Form 10-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 2/20/2015 | | |

| 4.6(e) | | | | | | Pinnacle West APS | | | | | | [Thirteenth Supplemental Indenture dated as of January 13, [removed: 2012](http://www.sec.gov/Archives/edgar/data/7286/000076462215000013/exhibit46g.htm)] [added: 2012](https://www.sec.gov/Archives/edgar/data/7286/000076462215000013/exhibit46g.htm)] | | | | | | 4.6g to Pinnacle West/APS 2014 Form 10-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 2/20/2015 | | |

| 4.6(f) | | | | | | Pinnacle West APS | | | | | | [Fourteenth Supplemental Indenture dated as of January 10, [removed: 2014](http://www.sec.gov/Archives/edgar/data/7286/000076462215000013/exhibit46h.htm)] [added: 2014](https://www.sec.gov/Archives/edgar/data/7286/000076462215000013/exhibit46h.htm)] | | | | | | 4.6h to Pinnacle West/APS 2014 Form 10-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 2/20/2015 | | |

| 4.6(g) | | | | | | Pinnacle West APS | | | | | | [removed: [Fifteenth] [added: [Seventeenth] Supplemental Indenture dated as of [removed: June 18, 2014](http://www.sec.gov/Archives/edgar/data/7286/000076462215000013/exhibit46i.htm)] [added: May 19, 2015](https://www.sec.gov/Archives/edgar/data/7286/000076462215000033/exhibit41seventeenthsupple.htm)] | | | | | | [removed: 4.6i] [added: 4.1] to Pinnacle West/APS [removed: 2014] [added: May 14, 2015] Form [removed: 10-K] [added: 8-K] Report, File Nos. 1-8962 and 1-4473 | | | | | | [removed: 2/20/2015] [added: 5/19/2015] | | |

| 4.6(h) | | | | | | Pinnacle West APS | | | | | | [removed: [Seventeenth] [added: [Eighteenth] Supplemental Indenture dated as of [removed: May 19, 2015](http://www.sec.gov/Archives/edgar/data/7286/000076462215000033/exhibit41seventeenthsupple.htm)] [added: November 6, 2015](https://www.sec.gov/Archives/edgar/data/7286/000076462215000073/exhibit41eighteenthsupplem.htm)] | | | | | | 4.1 to Pinnacle West/APS [removed: May 14,] [added: November 3,] 2015 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | [removed: 5/19/2015] [added: 11/6/2015] | | |

| [removed: 4.6(i)] [added: 4.6(o)] | | | | | | Pinnacle West APS | | | | | | [removed: [Eighteenth] [added: [Twenty-Fifth] Supplemental Indenture dated as of November [removed: 6, 2015](http://www.sec.gov/Archives/edgar/data/7286/000076462215000073/exhibit41eighteenthsupplem.htm)] [added: 20, 2019](https://www.sec.gov/Archives/edgar/data/7286/000076462219000100/exhibit41twenty-fifths.htm)] | | | | | | 4.1 to Pinnacle West/APS November [removed: 3, 2015] [added: 20, 2019] Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | [removed: 11/6/2015] [added: 11/20/2019] | | |

| [removed: 4.6(j)] [added: 4.6(i)] | | | | | | Pinnacle West APS | | | | | | [Nineteenth Supplemental Indenture dated as of May 6, [removed: 2016](http://www.sec.gov/Archives/edgar/data/7286/000110465916118564/a16-9669_3ex4d1.htm)] [added: 2016](https://www.sec.gov/Archives/edgar/data/7286/000110465916118564/a16-9669_3ex4d1.htm)] | | | | | | 4.1 to Pinnacle West/APS May 3, 2016 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 5/6/2016 | | |

| [removed: 4.6(k)] [added: 4.6(j)] | | | | | | Pinnacle West APS | | | | | | [Twentieth Supplemental Indenture dated as of September 20, [removed: 2016](http://www.sec.gov/Archives/edgar/data/7286/000076462216000137/exhibit41twentiethsuppleme.htm)] [added: 2016](https://www.sec.gov/Archives/edgar/data/7286/000076462216000137/exhibit41twentiethsuppleme.htm)] | | | | | | 4.1 to Pinnacle West/APS September 15, 2016 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 9/20/2016 | | |

| [removed: 4.6(l)] [added: 4.6(k)] | | | | | | Pinnacle West APS | | | | | | [Twenty-First Supplemental Indenture dated as of September 11, [removed: 2017](http://www.sec.gov/Archives/edgar/data/7286/000076462217000065/exhibit41twenty-firstsuppl.htm)] [added: 2017](https://www.sec.gov/Archives/edgar/data/7286/000076462217000065/exhibit41twenty-firstsuppl.htm)] | | | | | | 4.1 to Pinnacle West/APS September 11, 2017 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 9/11/2017 | | |

| [removed: 4.6(m)] [added: 4.6(l)] | | | | | | Pinnacle West APS | | | | | | [Twenty-Second Supplemental Indenture dated as of August 9, 2018](https://www.sec.gov/Archives/edgar/data/7286/000076462218000055/exhibit41twenty-secondsupp.htm) | | | | | | 4.1 to Pinnacle West/APS August 9, 2018 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 8/9/2018 | | |

| [removed: 4.6(n)] [added: 4.6(m)] | | | | | | Pinnacle West APS | | | | | | [Twenty-Third Supplemental Indenture dated as of February 28, [removed: 2019](http://www.sec.gov/Archives/edgar/data/7286/000076462219000025/exhibit41twenty-thirdsuppl.htm)] [added: 2019](https://www.sec.gov/Archives/edgar/data/7286/000076462219000025/exhibit41twenty-thirdsuppl.htm)] | | | | | | 4.1 to Pinnacle West/APS February 28, 2019 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 2/28/2019 | | |

| [removed: 4.6(o)] [added: 4.6(n)] | | | | | | Pinnacle West APS | | | | | | [Twenty-Fourth Supplemental Indenture dated as of August 19, [removed: 2019](http://www.sec.gov/Archives/edgar/data/7286/000076462219000077/exhibit41twenty-fourth.htm)] [added: 2019](https://www.sec.gov/Archives/edgar/data/7286/000076462219000077/exhibit41twenty-fourth.htm)] | | | | | | 4.1 to Pinnacle West/APS August 16, 2019 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 8/16/2019 | | |

| 4.6(p) | | | | | | Pinnacle West APS | | | | | | [removed: [Twenty-Fifth] [added: [Twenty-Sixth] Supplemental Indenture dated as of [removed: November 20, 2019](http://www.sec.gov/Archives/edgar/data/7286/000076462219000100/exhibit41twenty-fifths.htm)] [added: May 22, 2020](https://www.sec.gov/Archives/edgar/data/7286/000076462220000040/exhibit41twenty-sixths.htm)] | | | | | | 4.1 to Pinnacle West/APS [removed: November 20, 2019] [added: May 22, 2020] Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | [removed: 11/20/2019] [added: 5/22/2020] | | |

| 4.6(q) | | | | | | Pinnacle West APS | | | | | | [removed: [Twenty-Sixth] [added: [Twenty-Seventh] Supplemental Indenture dated as of [removed: May 22, 2020](https://www.sec.gov/Archives/edgar/data/7286/000076462220000040/exhibit41twenty-sixths.htm)] [added: September 11, 2020](https://www.sec.gov/Archives/edgar/data/7286/000076462220000064/exhibit41twenty-sevent.htm)] | | | | | | 4.1 to Pinnacle West/APS [removed: May 22,] [added: September 11,] 2020 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | [removed: 5/22/2020] [added: 9/11/2020] | | |

| 4.6(r) | | | | | | Pinnacle West APS | | | | | | [removed: [Twenty-Seventh] [added: [Twenty-Eighth] Supplemental Indenture dated as of [removed: September 11, 2020](https://www.sec.gov/Archives/edgar/data/7286/000076462220000064/exhibit41twenty-sevent.htm)] [added: August 16, 2021](https://www.sec.gov/Archives/edgar/data/7286/000076462221000056/exhibit4108162128thsupplem.htm)] | | | | | | 4.1 to Pinnacle West/APS [removed: September 11, 2020] [added: August 16, 2021] Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | [removed: 9/11/2020] [added: 8/16/2021] | | |

| 4.6(s) | | | | | | Pinnacle West APS | | | | | | [removed: [Twenty-Eighth] [added: [Twenty-Ninth] Supplemental Indenture dated as of [removed: August 16, 2021](https://www.sec.gov/Archives/edgar/data/7286/000076462221000056/exhibit4108162128thsupplem.htm)] [added: November 8, 2022](https://www.sec.gov/Archives/edgar/data/764622/000076462222000097/exhibit4129thsupplementind.htm)] | | | | | | 4.1 to Pinnacle West/APS [removed: August 16, 2021] [added: November 8, 2022] Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | [removed: 8/16/2021] [added: 11/8/2022] | | |

| 4.6(t) | | | | | | Pinnacle West APS | | | | | | [removed: [Twenty-Ninth] [added: [Thirtieth] Supplemental Indenture dated as of [removed: November 8, 2022](https://www.sec.gov/Archives/edgar/data/764622/000076462222000097/exhibit4129thsupplementind.htm)] [added: June 30, 2023](https://www.sec.gov/Archives/edgar/data/7286/000110465923077180/tm2314178d4_ex4-1.htm)] | | | | | | 4.1 to Pinnacle West/APS [removed: November 8, 2022] [added: June 30, 2023] Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | [removed: 11/8/2022] [added: 6/30/2023] | | |

| 4.6(u) | | | | | | Pinnacle West APS | | | | | | [removed: [Thirtieth Supplemental] [added: [Thirt](https://www.sec.gov/Archives/edgar/data/7286/000110465924059327/tm2413931d1_ex4-1.htm)[y-First](https://www.sec.gov/Archives/edgar/data/7286/000110465924059327/tm2413931d1_ex4-1.htm) [Supplemental] Indenture dated as [removed: of June 30, 2023](https://www.sec.gov/Archives/edgar/data/7286/000110465923077180/tm2314178d4_ex4-1.htm)] [added: of](https://www.sec.gov/Archives/edgar/data/7286/000110465924059327/tm2413931d1_ex4-1.htm) [May 9, 2024](https://www.sec.gov/Archives/edgar/data/7286/000110465924059327/tm2413931d1_ex4-1.htm)] | | | | | | 4.1 to Pinnacle West/APS [removed: June 30, 2023] [added: May 9, 2024] Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | [removed: 6/30/2023] [added: 5/9/2024] | | |

| 4.7 | | | | | | Pinnacle West | | | | | | [Third Amended and Restated Pinnacle West Capital Corporation Investors Advantage Plan dated as of November 25, [removed: 2008](http://www.sec.gov/Archives/edgar/data/764622/000095013408021205/p13537exv4w1.htm)] [added: 2008](https://www.sec.gov/Archives/edgar/data/764622/000095013408021205/p13537exv4w1.htm)] | | | | | | 4.1 to Pinnacle West’s Form S-3 Registration Statement No. 333-155641, File No. 1-8962 | | | | | | 11/25/2008 | | |

| 4.8(a) | | | | | | Pinnacle West APS | | | | | | [Agreement, dated March 21, 1994, relating to the filing of instruments defining the rights of holders of APS long-term debt not in excess of 10% of APS’s total [removed: assets](http://www.sec.gov/Archives/edgar/data/7286/0000950147-94-000030.txt)] [added: assets](https://www.sec.gov/Archives/edgar/data/7286/0000950147-94-000030.txt)] | | | | | | 4.1 to APS’s 1993 Form 10-K Report, File No. 1-4473 | | | | | | 3/30/1994 | | |

| 4.9 | | | | | | Pinnacle West APS | | | | | | [Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of [removed: 1934](https://www.sec.gov/Archives/edgar/data/764622/000076462224000016/pnw20231231exhibit49.htm)] [added: 1934](https://www.sec.gov/Archives/edgar/data/764622/000076462225000023/pnw20241231exhibit49.htm)] | | | | | | | | | | | | | | |

| 10.1(1)(a) | | | | | | Pinnacle West APS | | | | | | [Amendment No. 1 to Decommissioning Trust Agreement (PVGS Unit 1), dated as of December 1, [removed: 1994](http://www.sec.gov/Archives/edgar/data/7286/0000950147-95-000038.txt)] [added: 1994](https://www.sec.gov/Archives/edgar/data/7286/0000950147-95-000038.txt)] | | | | | | 10.1 to APS’s 1994 Form 10-K Report, File No. 1-4473 | | | | | | 3/30/1995 | | |

| 10.1(1)(b) | | | | | | Pinnacle West APS | | | | | | [Amendment No. 1 to Decommissioning Trust Agreement (PVGS Unit 3), dated as of December 1, [removed: 1994](http://www.sec.gov/Archives/edgar/data/7286/0000950147-95-000038.txt)] [added: 1994](https://www.sec.gov/Archives/edgar/data/7286/0000950147-95-000038.txt)] | | | | | | 10.2 to APS’s 1994 Form 10-K Report, File No. 1-4473 | | | | | | 3/30/1995 | | |

| 10.1(1)(c) | | | | | | Pinnacle West APS | | | | | | [Amendment No. 2 to APS Decommissioning Trust Agreement (PVGS Unit 1) dated as of July 1, [removed: 1991](http://www.sec.gov/Archives/edgar/data/7286/0000950147-97-000184.txt)] [added: 1991](https://www.sec.gov/Archives/edgar/data/7286/0000950147-97-000184.txt)] | | | | | | 10.4 to APS’s 1996 Form 10-K Report, File No. 1-4473 | | | | | | 3/28/1997 | | |

| 10.1(1)(d) | | | | | | Pinnacle West APS | | | | | | [Amendment No. 2 to APS Decommissioning Trust Agreement (PVGS Unit 3) dated as of July 1, [removed: 1991](http://www.sec.gov/Archives/edgar/data/7286/0000950147-97-000184.txt)] [added: 1991](https://www.sec.gov/Archives/edgar/data/7286/0000950147-97-000184.txt)] | | | | | | 10.6 to APS’s 1996 Form 10-K Report, File No. 1-4473 | | | | | | 3/28/1997 | | |

| 10.1(1)(e) | | | | | | Pinnacle West APS | | | | | | [Amendment No. 3 to the Decommissioning Trust Agreement (PVGS Unit 1), dated as of March 18, [removed: 2002](http://www.sec.gov/Archives/edgar/data/764622/000095014702000674/ex10-2.txt)] [added: 2002](https://www.sec.gov/Archives/edgar/data/764622/000095014702000674/ex10-2.txt)] | | | | | | 10.2 to Pinnacle West’s March 31, 2002 Form 10-Q Report, File No. 1-8962 | | | | | | 5/15/2002 | | |

| 10.1(1)(f) | | | | | | Pinnacle West APS | | | | | | [Amendment No. 3 to the Decommissioning Trust Agreement (PVGS Unit 3), dated as of March 18, [removed: 2002](http://www.sec.gov/Archives/edgar/data/764622/000095014702000674/ex10-4.txt)] [added: 2002](https://www.sec.gov/Archives/edgar/data/764622/000095014702000674/ex10-4.txt)] | | | | | | 10.4 to Pinnacle West’s March 2002 Form 10-Q Report, File No. 1-8962 | | | | | | 5/15/2002 | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| 4.4(b) | | | | | | Pinnacle West | | | | | | [F](https://www.sec.gov/Archives/edgar/data/764622/000110465924070030/tm2413531d7_ex4-1.htm)[ifth Supplemental Indenture dated](https://www.sec.gov/Archives/edgar/data/764622/000110465924070030/tm2413531d7_ex4-1.htm) [as of June](https://www.sec.gov/Archives/edgar/data/764622/000110465924070030/tm2413531d7_ex4-1.htm) [10](https://www.sec.gov/Archives/edgar/data/764622/000110465924070030/tm2413531d7_ex4-1.htm)[, 2024](https://www.sec.gov/Archives/edgar/data/764622/000110465924070030/tm2413531d7_ex4-1.htm) | | | | | | 4.1 to Pinnacle West June 5, 2024 Form 8-K Report, File No. 1-8962 | | | | | | 6/10/2024 | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| 4.10 | | | | | | Pinnacle West | | | | | | [Indenture, dated as of June 6, 2024, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee](https://www.sec.gov/Archives/edgar/data/764622/000110465924069111/tm2413531d6_ex4-1.htm) | | | | | | 4.1 to Pinnacle West June 6, 2024 Form 8-K Report, File No. 1-8962 | | | | | | 6/6/2024 | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| 10.6(4)bd | | | | | | Pinnacle West APS | | | | | | [Summary of 2025 Variable Incentive Plan and Officer Variable Incentive Plan](https://www.sec.gov/Archives/edgar/data/764622/000076462225000023/exhibit1064-summaryof2025i.htm) | | | | | | | | | | | | | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| 10.11(1)(a) | | | | | | Pinnacle West | | | | | | [Amendment No. 1 to the Second Amended and Restated Five-Year Credit Agreement, dated as of April 10, 2023, among Pinnacle West, as Borrower, Barclays Bank PLC, as Agent, Co-Sustainability Structuring Agent and Issuing Bank, and the lenders and other parties thereto](https://www.sec.gov/Archives/edgar/data/7286/000076462224000067/pnw-amendmentno1to2023cred.htm) | | | | | | 10.1 to Pinnacle West/APS August 2, 2024 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 8/2/2024 | | |

| 10.11(2)(a) | | | | | | APS | | | | | | [Amendment No. 1 to the Five-Year Credit Agreement, dated as of April 10, 2023, among APS, as Borrower, Barclays Bank PLC, as Agent, Co-Sustainability Structuring Agent and Issuing Bank, and the lenders and other parties thereto](https://www.sec.gov/Archives/edgar/data/7286/000076462224000067/aps-amendmentno1to2023cred.htm) | | | | | | 10.2 to Pinnacle West/APS August 2, 2024 Form 8-K Report, File Nos. 1-8962 and 1-4473 | | | | | | 8/2/2024 | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| 10.16(1) | | | | | | Pinnacle West | | | | | | [Forward Sale Agreement, dated February 28, 2024, between Pinnacle West and Wells Fargo Bank, National Association](https://www.sec.gov/Archives/edgar/data/764622/000110465924030516/tm2330082d7_ex10-1.htm) | | | | | | 10.1 to Pinnacle West February 28, 2024 Form 8-K Report, File No. 1-8962 | | | | | | 3/4/2024 | | |

| 10.16(2) | | | | | | Pinnacle West | | | | | | [Additional Forward Sale Agreement, dated February 28, 2024, between Pinnacle West and Wells Fargo Bank, National Association](https://www.sec.gov/Archives/edgar/data/764622/000110465924030516/tm2330082d7_ex10-2.htm) | | | | | | 10.2 to Pinnacle West February 28, 2024 Form 8-K Report, File No. 1-8962 | | | | | | 3/4/2024 | | |

| 10.17(1) | | | | | | Pinnacle West | | | | | | [Forward Sale Agreement, dated February 28, 2024, between Pinnacle West and Mizuho Markets Americas LLC (with Mizuho Securities USA LLC acting as its agent)](https://www.sec.gov/Archives/edgar/data/764622/000110465924030516/tm2330082d7_ex10-3.htm) | | | | | | 10.3 to Pinnacle West February 28, 2024 Form 8-K Report, File No. 1-8962 | | | | | | 3/4/2024 | | |

| 10.17(2) | | | | | | Pinnacle West | | | | | | [Additional Forward Sale Agreement, dated February 28, 2024, between Pinnacle West and Mizuho Markets Americas LLC (with Mizuho Securities USA LLC acting as its agent)](https://www.sec.gov/Archives/edgar/data/764622/000110465924030516/tm2330082d7_ex10-4.htm) | | | | | | 10.4 to Pinnacle West February 28, 2024 Form 8-K Report, File No. 1-8962 | | | | | | 3/4/2024 | | |

| 19.1 | | | | | | Pinnacle West | | | | | | [Securities Trading Policy of Pinnacle West](https://www.sec.gov/Archives/edgar/data/764622/000076462225000023/exhibit191.htm) | | | | | | | | | | | | | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

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| Exhibit No. | | | | | | Registrant(s) | | | | | | Description | | | | | | Previously Filed as Exhibit: a | | | | | | Date Filed | | |

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| Date: February [removed: 27, 2024] [added: 25, 2025] | | | /s/ Jeffrey B. Guldner | | |

| /s/ Jeffrey B. Guldner | | | | | | Principal Executive Officer | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ Andrew Cooper | | | | | | Principal Financial Officer | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ Elizabeth A. Blankenship | | | | | | Principal Accounting Officer | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ Glynis A. Bryan | | | | | | Director | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ Gonzalo A. de la Melena, Jr. | | | | | | Director | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ Richard P. Fox | | | | | | Director | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ Bruce J. Nordstrom | | | | | | Director | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ Paula J. Sims | | | | | | Director | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ William H. Spence | | | | | | Director | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ Kristine L. Svinicki | | | | | | Director | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ James [removed: E.] [added: E] Trevathan, Jr. | | | | | | Director | | | | | | February [removed: 27, 2024] [added: 25, 2025] | | |

| /s/ Ronald Butler, Jr. | | | | | | Director | | | | | | February 25, 2025 | | |

| (Ronald Butler, Jr.) | | | | | | | | | | | | | | |

| /s/ Carol S. Eicher | | | | | | Director | | | | | | February 25, 2025 | | |

| (Carol S. Eicher) | | | | | | | | | | | | | | |

| /s/ Susan T. Flanagan | | | | | | Director | | | | | | February 25, 2025 | | |

| (Susan T. Flanagan) | | | | | | | | | | | | | | |

| /s/ Theodore N. Geisler | | | | | | Director | | | | | | February 25, 2025 | | |

| (Theodore N. Geisler) | | | | | | | | | | | | | | |

| Date: February 25, 2025 | | | /s/ Jeffrey B. Guldner | | |

| /s/ Jeffrey B. Guldner | | | | | | Principal Executive Officer | | | | | | February 25, 2025 | | |

| /s/ Andrew Cooper | | | | | | Principal Financial Officer | | | | | | February 25, 2025 | | |

| /s/ Elizabeth A. Blankenship | | | | | | Principal Accounting Officer | | | | | | February 25, 2025 | | |

| /s/ Glynis A. Bryan | | | | | | Director | | | | | | February 25, 2025 | | |

| /s/ Ronald Butler, Jr. | | | | | | Director | | | | | | February 25, 2025 | | |

| (Ronald Butler, Jr.) | | | | | | | | | | | | | | |

| /s/ Gonzalo A. de la Melena, Jr. | | | | | | Director | | | | | | February 25, 2025 | | |

| /s/ Carol S. Eicher | | | | | | Director | | | | | | February 25, 2025 | | |

| (Carol S. Eicher) | | | | | | | | | | | | | | |

| /s/ Susan T. Flanagan | | | | | | Director | | | | | | February 25, 2025 | | |

| (Susan T. Flanagan) | | | | | | | | | | | | | | |

| /s/ Richard P. Fox | | | | | | Director | | | | | | February 25, 2025 | | |

| /s/ Theodore N. Geisler | | | | | | Director | | | | | | February 25, 2025 | | |

| (Theodore N. Geisler) | | | | | | | | | | | | | | |

| /s/ Bruce J. Nordstrom | | | | | | Director | | | | | | February 25, 2025 | | |

| /s/ Paula J. Sims | | | | | | Director | | | | | | February 25, 2025 | | |

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| /s/ William H. Spence | | | | | | Director | | | | | | February 25, 2025 | | |

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| /s/ Kristine L. Svinicki | | | | | | Director | | | | | | February 25, 2025 | | |

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| /s/ James E Trevathan, Jr. | | | | | | Director | | | | | | February 25, 2025 | | |

| /s/ Kathryn L. Munro | | | | | | Director | | | | | | February 27, 2024 | | |

| (Kathryn L. Munro) | | | | | | | | | | | | | | |