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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
i☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
i☐
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
i☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
i☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
iCommon
Stock
iPNW
iThe New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act
of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company
i☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
This combined Form 8-K is separately filed or furnished by Pinnacle West Capital Corporation and Arizona Public Service Company. Each registrant is filing or furnishing on its own behalf all of the information contained in this Form 8-K that relates to such registrant and, where required, its subsidiaries. Except as stated in the preceding sentence, neither registrant is filing or furnishing any information that does not relate to such registrant, and therefore makes no representation as to any such information.
Item
7.01 Regulation FD Disclosure.
As described under Item 8.01 below, Arizona Public Service Company (“APS” or the “Company”) filed an application and related schedules for an annual increase in retail base rates with the Arizona Corporation Commission (the “ACC”) on October 28, 2022. These materials are posted on Pinnacle West Capital Corporation's website at http://www.pinnaclewest.com/investors. The information on this website is not incorporated by reference into this report. The ACC docket number is E-01345A-22-0144. On October 28, 2022, APS also issued a press release announcing its filing with
the ACC described above. A copy of the press release is attached hereto as Exhibit 99.1.
Item 8.01 Other Events.
2022 Retail Rate Case
APS filed an application with the ACC on October 28, 2022 (the “2022 Rate Case”) seeking an increase in annual retail base rates on the date rates become effective (“Day 1”) of a net $460 million. 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 are:
•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
%
Weighted-average cost of capital
7.17
%
•A 1% return
on the increment of fair value rate base above APS’s original cost rate base, as provided for by Arizona law;
•A rate of $0.038321 per kWh for the portion of APS’s retail base rates attributable to fuel and purchased power costs;
•Modification of its adjustment mechanisms including:
▪eliminate the Environmental Improvement Surcharge and collect costs through base rates,
▪eliminate the Lost Fixed Cost Recovery mechanism and collect costs through base rates and the Demand Side Management Adjustment Charge ("DSMAC"),
▪maintain as inactive the Tax Expense Adjustor Mechanism,
▪maintain
the Transmission Cost Adjustment mechanism,
▪modify the performance incentive in the DSMAC, and
▪modify the Renewable Energy Adjustment Charge to include recovery of capital carrying costs of APS owned renewable and storage resources;
•Changes to its limited-income program, including a second tier to provide an additional discount for customers with greater need; and
•Twelve months of post-Test Year plant to reflect used and useful projects that will be placed into service prior to July 1, 2023.
APS requested that the increase become effective December
1, 2023. APS cannot predict the outcome of its request.
Forward-Looking Statements
This Report on Form 8-K and the application and related schedules for an annual increase in retail base rates filed with the ACC on October 28, 2022 contain forward-looking statements based on current expectations. These forward-looking statements are often identified by words such as “estimate,”“predict,”“may,”“believe,”“plan,”“expect,”“require,”“intend,”“assume” and similar words. Because actual results may differ materially from expectations, we caution you not to place undue reliance on these statements.
A number of factors could cause future results to differ materially from historical results, or from outcomes currently expected or sought by us. A discussion of some of these risks and uncertainties is contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022 and are available on our website at http://www.pinnaclewest.com, which you should review carefully before placing any reliance on our forward-looking statements or disclosures. We assume no obligation to update any forward-looking statements, even if our internal estimates change, except as may be required by applicable law.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
