JOSEPH CITY, AZ - October 24, 2007

Arizona’s three largest electric utilities have joined a coalition to test the viability of storing carbon dioxide (CO2) underground as a way to manage greenhouse gas emissions.

Arizona Public Service (APS), Salt River Project (SRP) and Tucson Electric Power (TEP) are participants in WESTCARB, (West Coast Regional Carbon Sequestration Partnership). The research venture – consisting of scientists, engineers, public agencies, private companies and non-profit organizations – is co-funded by the U.S. Department of Energy and the California Energy Commission.

The utilities are participating in WESTCARB’s Arizona Utilities CO2 Storage Pilot project to validate the feasibility, safety and efficacy of carbon sequestration techniques. CO2 is released into the atmosphere when fossil fuels are burned to power vehicles, warm buildings and generate electricity.

The research project site is located approximately one mile east of Joseph City in Navajo County on land owned by APS. The site was selected by geologists because of its deep, impervious geologic formations containing salty water that is unsuitable for drinking or irrigation.

Commercial CO2 will be transported by truck to the site and pumped about three-fourths of a mile deep into the underground formation, where it will be stored and monitored with sensitive instruments. The land surface will remain undisturbed except for a small area required for the injection well.

Emissions from the APS Cholla Power Plant in Joseph City will not be used in this project. While WESTCARB and others are testing underground storage techniques, the technology needed to capture CO2 emissions at industrial sites is being evaluated through other programs.

The project is expected to take about two years, including several months devoted to a state and federal permitting process, which is about to begin.

Successful testing in Arizona and some 25 other locations in the U.S. and Canada may lead to large commercial underground storage projects that could reduce the impacts of CO2 emissions on climate change. With large-scale commercial sequestration, CO2 would be captured from the emissions of power plants, oil refineries and other industrial facilities and stored underground for centuries or longer.

Utility representatives and WESTCARB team leaders received positive comments about the project in August during presentations to elected officials and community leaders in Navajo County and local residents. The Navajo County Board of Supervisors unanimously voted to support the project and praised WESTCARB members “who teamed up to research possible solutions to reducing atmospheric pollution and global warming trends.” The supervisors said the project “represents a step forward in helping to reduce the amount of CO2 released into the atmosphere.”

“Sequestration may allow society to reduce the carbon intensity of our national economy while continuing use of our fossil fuel reserves, thereby ‘buying time’ to develop and construct affordable non-emitting energy and transportation systems,” said Robert C. Trautz, a hydrogeologist at the Lawrence Berkeley National Laboratory-University of California, a WESTCARB member.

“Reducing the buildup of CO2 in the atmosphere and ultimately reducing its concentration is a complex challenge,” said Trautz, WESTCARB’s manager of geologic sequestration pilot projects. “Because reducing man-made CO2 emissions will be important in the future, society needs to embrace multiple solutions, including more efficient energy use, alternative fuels, electric-drive transportation, electricity from non-CO2-emitting sources and carbon sequestration.”

WESTCARB is one of seven research partnerships co-funded by the U.S. Department of Energy to conduct technology validation tests. The WESTCARB region consists of six states – Arizona, Alaska, California, Nevada, Oregon and Washington – and the Canadian province of British Columbia. The team is managed by the California Energy Commission with the Lawrence Berkeley National Laboratory providing technical oversight and leadership for the field tests. A complete list of WESTCARB partners, including other Arizona companies and agencies, is available at www.westcarb.org. # # # 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)

Tucson Electric Power, a subsidiary of UniSource Energy (NYSE: UNS), provides safe, reliable electric service to nearly 395,000 customers in southern Arizona. For more information, visit TEP.com. For more information about UniSource Energy, visit uns.com.

SRP is the largest provider of power to the greater Phoenix metropolitan area, serving more than 925,000 electricity customers. For more information, visit www.srpnet.com .