SEC – ‘UPLOAD’ from 9/2/05 re: Arizona Public Service Co – ‘LETTER’

On:  Friday, 9/2/05, at 9:33am ET   ·   Private-to-Public:  Filing ¶  –  Release Delayed to:  8/28/06   ·   Accession #:  0-5-45680

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Delayed-Release Comment or Other Letter from the SEC
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: LETTER      Comment or Other Letter from the SEC                   4±    17K 


Mail Stop 3561                                                                  

                 September 1, 2005

Mr. Donald E. Brandt                                                            
Executive Vice President and Chief Financial Officer                            
Arizona Public Service Company                                                  
400 North Fifth Street                                                          
P.O. Box 53999, M.S. 9042                                                       
Phoenix, AZ 85072-3999                                                          

Re:     Arizona Public Service Company                          
 Form 10-K for Fiscal Year Ended December 31, 2004
Filed March 16, 2005                            
Forms 10-Q for Fiscal Quarters Ended            
March 31, 2005 and June 30, 2005                
File No. 1-4473                                 

Dear Mr. Brandt:                                                                

We have reviewed your filings and have the following                
comments.                                                                       
Where indicated, we think you should revise your disclosures in                 
future filings in response to these comments.  If you disagree, we              
will consider your explanation as to why our comment is                         
inapplicable                                                                    
or a revision is unnecessary.  Please be as detailed as necessary               
in                                                                              
your explanation.  In some of our comments, we may ask you to                   
provide                                                                         
us with information so we may better understand your disclosure.                
After reviewing this information, we may or may not raise                       
additional                                                                      
comments.                                                                       

Please understand that the purpose of our review process is     
to                                                                              
assist you in your compliance with the applicable disclosure                    
requirements and to enhance the overall disclosure in your filing.              
We look forward to working with you in these respects.  We welcome              
any questions you may have about our comments or on any other                   
aspect                                                                          
of our review.  Feel free to call us at the telephone numbers                   
listed                                                                          
at the end of this letter.                                                      

Form 10-K for Fiscal Year Ended December 31, 2004                               

Note 3. Regulatory Matters, page 81                                             
1. We note that the transfer of PWEC Dedicated Assets from                      
Pinnacle                                                                        
West Energy to APS will result in a mandatory rate base                         
disallowance                                                                    
of $150 million, which will be recognized as a one-time after-tax               
net                                                                             
plant write-off of approximately $90 million in the period of                   
transfer.  Please tell us the governing accounting literature you               
relied upon in calculating the amount and timing of the charge.                 
If                                                                              
you utilized SFAS 71, explain why SFAS 90 was not applicable. We                
further note that the "Bridge PPA," which would be in effect for                
30                                                                              
years should the transfer not be approved, allows for cost-based                
recovery of plant based on a rate base value of $700 million.  As               
the                                                                             
book value of such assets is $850 and prices under the PPA reflect              
cost-of-service, please tell us what consideration you gave to                  
applying regulatory accounting to the plant prior to actual                     
transfer                                                                        
since the "Bridge PPA" effectively converted the plant into a                   
regulated asset irrespective of FERC approval.  On a related                    
point,                                                                          
tell us whether you tested these assets for impairment prior to                 
transfer, the results of such test, and the governing accounting                
literature used to test for impairment.  Finally, tell us whether               
you                                                                             
will be earning a return on plant and whether such return is                    
consistent with similar productive assets.                                      

Note 8. Retirement Plans and Other Benefits, page 96                            

2. Please explain to us how you calculate the market related value              
of                                                                              
plan assets as that term is defined in SFAS 87.  Since there is an              
alternative to how you can calculate this item, and it has a                    
direct                                                                          
effect on pension expense, we believe you should disclose how you               
determine this amount in accordance with paragraph 12 of APB 22.                

Statements of Income, page 130                                                  
3. Note 17 discloses that Pinnacle West has three principal                     
business                                                                        
segments, including the regulated electricity segment, the                      
marketing                                                                       
and trading segment, and the real estate segment.  Although APS                 
also                                                                            
has regulated electricity and marketing and trading businesses, we              
note APS has no segment disclosures for marketing and trading.                  
Please explain this disparity.  In doing so, please describe in                 
greater detail the nature of the APS marketing and trading                      
activities, including whether they include bulk power sales to                  
other                                                                           
electric utilities, and how such activities differ from those                   
included in the Pinnacle West marketing and trading segment.  In                
this                                                                            
regard a comparison of marketing and trading for Pinnacle West                  
relative to APS, including whether the latter is a subset of the                
former, may be helpful to our understanding.  If you consider APS`              
marketing and trading and regulated electricity businesses to be                
separate operating segments under paragraph 10 of SFAS 131, please              
explain how you determined it was appropriate to aggregate them                 
for                                                                             
reporting purposes based on paragraphs 17-24 of SFAS 131.  If you               
consider regulated electricity and marketing and trading                        
businesses                                                                      
to be one operating segment, please explain your rationale under                
SFAS                                                                            
131 for APS.  We may have further comment.                                      

*    *    *    *                                                                

As appropriate, please respond to these comments within 10          
business days or tell us when you will provide us with a response.              
Please furnish a cover letter that keys your responses to our                   
comments and provides any requested information.  Detailed cover                
letters greatly facilitate our review.  Please understand that we               
may                                                                             
have additional comments after reviewing your responses to our                  
comments.                                                                       

We urge all persons who are responsible for the accuracy and    
adequacy of the disclosure in the filing to be certain that the                 
filing includes all information required under the Securities                   
Exchange Act of 1934 and that they have provided all information                
investors require for an informed investment decision.  Since the               
company and its management are in possession of all facts relating              
to                                                                              
a company`s disclosure, they are responsible for the accuracy and               
adequacy of the disclosures they have made.                                     

In connection with responding to our comments, please           
provide,                                                                        
in writing, a statement from the company acknowledging that:                    

* the company is responsible for the adequacy and accuracy of the               
disclosure in the filing;                                                       

* staff comments or changes to disclosure in response to staff                  
comments do not foreclose the Commission from taking any action                 
with                                                                            
respect to the filing; and                                                      

* the company may not assert staff comments as a defense in any                 
proceeding initiated by the Commission or any person under the                  
federal securities laws of the United States.                                   

In addition, please be advised that the Division of                 
Enforcement                                                                     
has access to all information you provide to the staff of the                   
Division of Corporation Finance in our review of your filing or in              
response to our comments on your filing.                                        

You may contact Staff Accountant Sarah Goldberg at (202)            
551-                                                                            
3340 if you have questions regarding comments on the financial                  
statements and related matters.  Please contact me at (202) 551-                
3849                                                                            
with any other questions.                                                       

                                          Sincerely,

                                              Jim Allegretto
                                                      Senior Assistant Chief
Accountant                                                                      

??                                                                              

??                                                                              

??                                                                              

??                                                                              

Mr. Brandt                                                                      
Arizona Public Service Company                                                  
September 1, 2005                                                               
Page 1 of 3                                                                     

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘UPLOAD’ Filing		Date		Other Filings
Release Delayed to:		8/28/06		CORRESP,  UPLOAD
Filed on:		9/2/05		UPLOAD
		9/1/05		UPLOAD
		6/30/05		10-Q,  8-K,  UPLOAD
		3/31/05		10-Q,  8-K,  UPLOAD
		3/16/05		10-K,  UPLOAD
		12/31/04		10-K,  8-K
				List all Filings

1 Previous Filing that this Filing References

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 3/16/05  Arizona Public Service Co.        10-K¶      12/31/04   28:2.5M                                   Bowne - BPX/FA