Arizona Public Service Co – ‘8-K’ for 5/19/98

As of:  Friday, 6/26/98   ·   For:  5/19/98   ·   Accession #:  950147-98-493   ·   File #:  1-04473

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         4     17K 
 2: EX-10.1     Statement of Position of the Acc Staff 5/29/98         8     29K 
 3: EX-10.2     Addendum to Memorandum of Agreement                    4     15K 

8-K   —   Current Report
Document Table of Contents

8-K
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
 Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 19, 1998

ARIZONA PUBLIC SERVICE COMPANY
------------------------------
(Exact name of registrant as specified in its charter)

      Arizona                  1-4473                     86-0011170
--------------------------------------------------------------------------------
(State or other jurisdiction      (Commission                 (IRS Employer     
      of incorporation)           File Number)            Identification Number)

400 North Fifth Street, P.O. Box 53999, Phoenix, Arizona      85004   
--------------------------------------------------------      -----   
   (Address of principal executive offices)                 (Zip code)

(602) 250-1000
 ---------------------------------------
(Registrant's telephone number, including area code)

NONE
 ---------------------------------------
 (Former name or former address, if changed since last report)

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Item 5.    Other Events                                                         
-----------------------                                                         

Competition                                                                     

         Stranded Cost Hearing.  As  previously  reported,  in February 1998 the
Arizona  Corporation  Commission  (the  "ACC")  completed  a generic  hearing on
stranded  cost  determination  and  recovery.  See Note 5 of Notes to  Condensed
Financial Statements in the Company's Report on Form 10-Q for the fiscal quarter
ended March 31, 1998 (the "March 10-Q Report"). On June 22, 1998, the ACC issued
an order in that matter.  The order allows an  "Affected  Utility,"  such as the
Company,  to choose between two options for the recovery of its stranded  costs.
Under  the first  option,  an  Affected  Utility  that  chooses  to  divest  its
generating  assets must file a  divestiture  plan for ACC approval no later than
October 1, 1998,  and  divestiture  must be completed by January 1, 2001,  after
which the  Affected  Utility  would be  permitted  to collect 100 percent of its
stranded costs,  including a return on the unamortized balance,  over a ten-year
period.  Under the  second  option  (referred  to by the ACC as the  "Transition
Revenues  Methodology"),  an  Affected  Utility  would  be  provided  sufficient
revenues necessary to maintain financial  integrity for a period of ten years or
the ACC would "otherwise provide an allocation of stranded cost responsibilities
and risks  between  ratepayers  and  shareholders  as is determined to be in the
public  interest."  The order also states an intent  that the  various  recovery
options "will provide the Affected Utilities  sufficient revenues to enable them
to recover  appropriate  regulatory  assets." The order  requires  each Affected
Utility  to file  with the ACC,  within  60 days of the date of the  order,  its
choice of options for stranded cost recovery as well as an  implementation  plan
relating to its chosen option,  including its estimated stranded costs separated
out into regulatory assets and other generation related assets.                 

         The Company  does not intend to divest its  generating  assets and will
continue to work with the ACC to reach  workable  resolutions  on stranded  cost
recovery. The Company cannot accurately predict the outcome of this matter.     

         Statement  of  Position.  On May  29,  1998,  the  Staff  of the  ACC's
Utilities  Division  (the "ACC Staff")  issued a Statement of Position and asked
for  comments  on a number of issues  related  to the  implementation  of retail
electric  competition in Arizona. The Statement of Position, a copy of which has
been filed as an exhibit to this  Report on Form 8-K,  recommends,  among  other
things:  the  divestiture of Affected  Utility  assets;  aggregation of customer
loads for purposes of competition phase-in;  acceleration of the date to January
1,  2001 by which  all  customers  would  have  competitive  access;  and,  rate
reductions for non-eligible  customers.  Certain of the  recommendations  in the
Statement  of  Position  are  designed to amend the  positions  set forth in the
framework rules regarding retail electric competition  previously adopted by the
ACC.                                                                            

         At the request of the ACC Staff,  on May 22, 1998,  the Company filed a
response to a draft of the Statement of Position. In the Company's response, the
Company  stated that the proposals in the draft  Statement of Position  (many of
which are  included  in the final  Statement  of  Position)  were  deficient  or
unlawful in many  material  respects,  met none of the stated  objectives       

8-K
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of the draft  Statement of Position,  were punitive to Affected  Utilities,  and
continued  to lack the level of detail and  specificity  required  to  implement
competition in the next seven months.                                           

         On June 4,  1998,  the ACC held a  special  open  meeting  at which the
Statement of Position was discussed, but no action was taken. The Company cannot
accurately  predict what  action,  if any, the ACC will take with respect to the
Statement of Position.                                                          

         Agreement  with  Salt  River  Project.  As  previously  reported,   the
Antitrust Unit of the Arizona Attorney  General's Office (the "Antitrust Unit"),
which has been involved in the ongoing  regulatory and  legislative  proceedings
regarding  the  restructuring  of  the  Arizona  electric  industry,   requested
clarification  of certain  provisions of a Memorandum  of Agreement  between the
Company and the Salt River Project  Agricultural  Improvement and Power District
("Salt River Project"). See Note 5 of Notes to Condensed Financial Statements in
the March 10-Q Report.                                                          

         Pursuant to an Addendum to Memorandum of Agreement, dated as of May 19,
1998 (the "Addendum"),  the Company and Salt River Project amended and clarified
certain  provisions of the Memorandum of Agreement in response to certain issues
raised by the Antitrust  Unit. By letter dated May 19, 1998,  the Antitrust Unit
advised the Company and Salt River  Project  that,  upon their  execution of the
Addendum,  it would take no action  regarding the language of the  Memorandum of
Agreement,  although it  reserved  the right to take action in the future if new
information  justified doing so. The ACC Hearing  Division has set a hearing for
August 6, 1998 so that the ACC may review  certain  provisions of the Memorandum
of Agreement, as amended.                                                       

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits     
---------------------------------------------------------------------------     

(c) Exhibits.                                                 

Exhibit No.       Description                                 
-----------       -----------                                 

         10.1              Statement  of Position of the ACC Staff dated May 29,
1998                      

         10.2              Addendum to Memorandum  of Agreement  dated as of May
19, 1998                  
2 

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SIGNATURES
----------

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Company  has duly  caused  this  report to be  signed on its  behalf by the
undersigned hereunto duly authorized.                                           

                              ARIZONA PUBLIC SERVICE COMPANY
                                (Registrant)

Dated:   June 25, 1998                  By:  Michael V. Palmeri                 
                                             -----------------------------------
                            Michael V. Palmeri
                   Treasurer
3 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		1/1/01		2
		10/1/98		2
		8/6/98		3					8-K
Filed on:		6/26/98
		6/25/98		4
		6/22/98		2
		6/4/98		3
		5/29/98		2		3
		5/22/98		2
For Period End:		5/19/98		1		3			DEF 14A
		3/31/98		2					10-Q
									List all Filings

4 Subsequent Filings that Reference this Filing

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 2/27/24  Pinnacle West Capital Corp.       10-K       12/31/23  147:25M
 2/27/23  Pinnacle West Capital Corp.       10-K       12/31/22  146:28M
 2/25/22  Pinnacle West Capital Corp.       10-K       12/31/21  150:28M
 2/24/21  Pinnacle West Capital Corp.       10-K       12/31/20  144:26M