Before the Arizona Corporation Commission Arizona Public Service Company 2011 Summer Readiness

April11,2011

Presenters

Steve Norris

Director, Transmission Operations

Tom Carlson
Director, Fuels

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Agenda
Loads and Resources Fuel and Purchase Power Planned Maintenance Activities Emergency Preparedness & Contingency Planning Conclusions

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APS Service Statistics

11 counties 34,645 sq. mi. CC&N area 1.1 million customers 417 substations 28,515 distribution line miles 5,438 transmission line miles 54 generation units

Grand Canyon

Flagstaff Seligman Prescott Parker Holbrook Payson Show Low

Phoenix Phoenix Phoenix

Yuma

Gila Bend Casa Grande Douglas

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APS Existing Generation

Fuel Source Nuclear Coal Gas Combined Cycle Gas/Oil CT, Steam Solar Total Capacity - MW 1,146 1,753 1,871 1,518 6 6,294

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Renewable Resources
Peak Contribution Resource Aragonne Mesa Wind 16.1 High Lonesome Wind 11.6 Salton Sea CE Turbo 10.0 SWMP Biomass 24.5 Glendale Landfill Biogas 2.6 Solar Generation 2.9 Total (MW) 67.7 Capacity 90.0 97.0 10.0 24.5 2.8 6.0 230.3

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Generation Resources
Existing Generation Long-term Contracts PacifiCorp Exchange SRP - Firm Reliability Purchases Demand Response Contract Market Contracts for ED3 Renewable Contracts Subtotal
Capacity (MW)

6,294

480 36 1,594 59 104 68 2,341

Total Resources

8,635

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APS System Peak Loads

7,254MW Forecast 7,059MW Forecast 7,218MW Actual 7,050MW Forecast

6,936MW Actual

1.6%

2009

2010

2011

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2011 Peak Generation Resources and Load

ReserveMargin

Planned Reserve Margin to manage uncertainties: 1. Load forecast uncertainties (weather, economy) 2. Multiple generator outages 3.Transmission outages

1585MW=18%

8,635 MW 7,050MW

Resources

PeakLoad

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APS/SRP Maximum Load Serving Capability, Phoenix Valley

MW
13,000 Forecast 11,622 13,400 Forecast 11,465 14400 Forecast 11,414

Actual 11,489

Actual 11,322

2009

2010 Capability

2011 Load
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Yuma Area Peak Loads

431MW Forecast 431MW Actual

3.7%
404MWActual 406MW Forecast

415MW Forecast

2009

2010

2011

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YumaAreaMaximum LoadServingCapability
MW
565 Forecast 431 600 Forecast 406 600 Forecast 415

Actual 404

Actual 431

2009

2010 Capability

2011 Load

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APS Fuels Procurement

Tom Carlson
Director, Fuels

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APS Generation
Base Load, Nuclear
Farmington NM Page
Palo Verde

Base Load, Coal

Four Corners Cholla Navajo

Joseph City

Intermediate and Peak Load, Gas, Oil back-up

Phoenix Area
West Phoenix Sundance Redhawk Ocotillo

Phoenix

Saguaro Yucca Douglas

Yuma Tucson Douglas

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RenewableResources
1. 2. 3. 4. Aragonne Mesa,90MW(Wind) SaltonSea,10MW(Geothermal) PrescottAirport,2.9MW(Solar) STARCenter,1.8MW(Solar) 5. 6. 7. 8. Saguaro,1MW(Solar) Snowflake,25MW(Biomass) GlendaleLFG,2.8MW HighLonesome,100MW (Wind)

Prescott 3 SaltonSea 2 Glendale 7

Snowflake 6 Mountainair 4 Phoenix 8 1 SantaRosa

5 Tucson

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2011 Projected Energy Mix

Energy Renewable Efficiency 3% 4%

Nuclear 28% Coal 39%

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Nuclear: Palo Verde

Fuel sourced from multiple suppliers 100% of 2011 fuel inventory in place 100% of fuel requirements contracted through 2017 Overall station capacity factor at 90.5% in 2010 Unit 2 was worlds top generator in 2010

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Coal Supply
Four Corners Power Plant Mine mouth plant with BHP Navajo Mine Contract term currently runs through 2016 60-70 days of reserves

Cholla Power Plant Fuel Source: El Segundo mine near Grants, NM Contract commitments in place through 2024 45-60 days of reserves

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Natural Gas Supply

APS has sufficient firm transport and supply under contract to meet peak system needs. El Paso Natural Gas supplies all APS natural gas plants. Transwestern Pipeline also supplies the APS Redhawk and Sundance power plants. North Baja Pipeline placed in service March 2010 - serves Yucca Units 5 & 6

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Natural Gas Pipelines Serving Arizona

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Transmission Additions 2011

Morgan-Pinnacle Peak 500/230kV double-circuit line New Pinnacle Peak 500kV substation with new 500/230kV transformers

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Planned Reliability Activities:

Transmission / Distribution Maintenance, Monitoring:
U-Type Bushing Replacement Program Web-based Software to Assess Substation Equipment Health for Strategic Maintenance TOAN analysis software Annual line inspections Switchyard Equipment Maintenance / Relay Testing Predictive Maintenance Expanded Scope to Include Line Scans as well as Substation Scans

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Planned Reliability Activities

Vegetation Management: Focus on safe, reliable power supply / reduction in wildfire risk
Wildfire planning
Annual Wildfire Academy, Prescott Pre-wildfire Season Meetings with Five National Forests On-Site Incident Command presence

Transmission corridor bulk clearing, 69 kV and above Distribution line-clearing: trim and strategic removal 2011 Fire Season above normal fire potential

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Emergency Planning, Government:

Government Engagement:
State-wide Emergency Mock Drills Incident Command Training Regular Emergency planning updates with Emergency Response partners: State, County, Municipal levels
Agency familiarization facility layout (Westwing, Pinnacle Peak) Review of Curtailment Plan annual filing

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Emergency, Business Planning - APS

Business Continuity Plans updated, exercised Incident Command Training Emergency Operations Training Curtailment Plan: Development, Filing, Exercise ECC Disaster Recovery, Back-up Center Testing, Regional Black Start Drill State-wide Operations Coordination:
Joint Procedures: APS / SRP / WAPA / TEP Begins May 15th

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APS is Well Prepared

Generation resources are in place to meet customer load and reserve requirements Transmission capacity in place to import remote generation and purchases Distribution infrastructure improvements on schedule to meet customer needs Plans in-place to respond to extreme conditions

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