PHOENIX, Jan 06, 2006 -- BUSINESS WIRE

 

Arizona Public Service (APS) today asked for emergency action by the Arizona Corporation Commission (ACC) to accelerate the updated base fuel portion of the Company's pending general rate case filing. The Company requested a decision coincident with the April 1 effective date of its annual fuel adjustor change.

"We have to recover our fuel costs, and we are not doing so," said Jack Davis, President and CEO of APS, adding that the Company earns no markup or profit on fuel or purchased power. "Because of the dramatic increase in wholesale natural gas prices - and without a corresponding increase in our retail prices - we have a very real crisis for our company and for our customers.

"By the end of the year, APS will have incurred a half-billion dollars of un-recovered fuel costs."

APS' debt securities were recently downgraded to the bottom rung of the investment-grade ladder, thus increasing financing costs for the Company (and ultimately customers) and decreasing the marketability of its securities.

"If the Company's credit rating is further downgraded," said Davis, "our customers could face increased financing costs of as much as $1 billion over the next decade. By any measure, that is a disastrous result and is the reason for this emergency filing."

If approved by the ACC, the emergency relief when coupled with the anticipated annual fuel adjustment change would raise customer rates by about 19 percent. The emergency increase would be subject to refund pending the ACC's final decision on the Company's rate case that was originally filed Nov. 4, 2005.

As a result of higher fuel costs, customers could face a total increase to their bills on April 1 of about $19 per month from $101 to about $120, based on average residential usage of around 1,100 kilowatt-hours of energy.

APS, Arizona's largest and longest-serving electricity utility, serves more than 1 million customers in 11 of the state's 15 counties. With headquarters in Phoenix, APS is the largest subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).

SOURCE: APS

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