Item 2. PROPERTIES

Generation Facilities

APS’s portfolio of owned generating facilities in commercial operation as of the date of this report is provided in the table below:

(a)100% unless otherwise noted.

(b)APS’s 29.1% ownership in Palo Verde includes leased interests and is the largest capacity interest of all the participants. See “Business of Arizona Public Service Company — Energy Sources and Resource Planning — Generation Facilities — Nuclear” in Part I, Item 1 for details regarding leased interests in Palo Verde. 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 and Power.

(c)The other participants are Salt River Project (10%), Public Service Company of New Mexico (13%), Tucson Electric Power Company (7%) and NTEC (7%). The plant is operated by APS.

Energy Storage Facilities

APS’s portfolio of owned energy storage facilities in commercial operation as of the date of this report is provided in the table below. Capacity amounts are approximate and represent the maximum designed MW the site can provide for three hours, unless noted otherwise.

(a) Capacity amounts represent the maximum designed MW the site can provide for four hours.

See “Business of Arizona Public Service Company” in Part I, Item 1 for a map detailing the location of APS’s major power plants and principal transmission lines.

Transmission and Distribution Facilities

Current Facilities**.** As of January 22, 2026, APS’s transmission facilities consist of approximately 5,939 pole miles of overhead lines and approximately 86 miles of underground lines, 5,792 miles of which are located in Arizona. APS’s distribution facilities consist of approximately 11,321 miles of overhead lines and approximately 24,425 miles of underground primary cable (21,301 when excluding abandoned conductor), all of which are located in Arizona. APS also owns and maintains 477 substations, including both transmission and distribution yards. APS shares ownership of some of its transmission facilities with other companies.

The following table shows APS’s jointly-owned interests in those transmission facilities recorded on the Consolidated Balance Sheets at December 31, 2025:

Expansion. Each year, APS prepares and files with the ACC a Ten-Year Transmission Plan. In APS’s 2026 Ten-Year Transmission Plan, APS projects it will develop 263 miles of new transmission lines over the next 10 years. Additionally, APS plans to upgrade 725 miles of existing transmission lines over the same horizon. The 2026 Ten-Year Plan includes critical transmission projects that represent significant upgrades to our transmission system. These upgrade projects, along with other projects included in the 2026 Ten Year Transmission Plan, are designed to support growing energy needs, strengthen reliability, and allow for the connection of new resources.

Plant and Transmission Line Leases and Rights-of-Way on Indian Lands

The Navajo Plant and Four Corners are located on land held under leases from the Navajo Nation and also under rights-of-way from the federal government. The Navajo Plant ceased operations in November 2019. The co-owners and the Navajo Nation executed a lease extension on November 29, 2017, that allowed for decommissioning activities to begin after the plant ceased operations.

APS, on behalf of the Four Corners participants, negotiated amendments to the Four Corners facility lease with the Navajo Nation, which extends the Four Corners leasehold interest from 2016 to 2041. See “Business of Arizona Public Service Company — Energy Sources and Resource Planning — Generation Facilities — Coal-Fueled Generating Facilities — Four Corners” in Part I, Item 1 for additional information about the Four Corners right-of-way and lease matters.

Certain portions of APS’s transmission lines are located on Indian lands pursuant to rights-of-way that are effective for specified periods. Some of these rights-of-way have expired and renewal applications have not yet been acted upon by the appropriate Indian tribes or federal agencies. Other rights expire at various times in the future and renewal action by the applicable tribe or federal agencies will be required at that time. In recent negotiations, certain of the affected Indian tribes have required payments substantially in excess of historical amounts paid in the past for such rights-of-way. The ultimate cost of renewal of certain of the rights-of-way for transmission lines is therefore uncertain.