PINNACLE WEST CAPITAL CORP recently released its 10-Q report. The company is an investor-owned electric utility holding company based in Phoenix, Arizona, and it derives essentially all of its revenue and earnings from Arizona Public Service, its principal subsidiary. APS provides retail and wholesale electric service in Arizona, with operations spanning generation, transmission, distribution, and energy storage.
In Item 2, management said Pinnacle West had consolidated assets of about $31 billion and that APS serves roughly 1.5 million retail customers across 11 of Arizona’s 15 counties. The company’s generation fleet includes nuclear, gas, oil, coal, and solar resources, and APS remains a co-owner and operator of Palo Verde, which generated more than 32 million MWh and is described as enough electricity for about 3.4 million households, or around 8.5 million people. Pinnacle West also said its other active subsidiaries are El Dorado and PNW Power.
Management framed the quarter around three priorities: reliability, affordability, and a lower-carbon future over time. On reliability, APS said Arizona’s growing demand is driving the need for more infrastructure and additional dispatchable generation, and in July 2025 it signed a gas transportation precedent agreement for a new pipeline expected to be operational by late 2029. APS said it plans to add up to 2,000 MW of flexible natural gas generation to help meet around-the-clock demand.
Palo Verde remained central to the resource plan. In June 2025, APS agreed to buy two leased interests in Unit 2 representing about 7% or 94 MW of the unit, and the transaction closed in September 2025. One remaining lease for about 5.2% of Unit 2 runs through 2033. APS also said in March 2026 that it intends to renew operating licenses for all three Palo Verde units, which would extend operations from the mid-2040s into the mid-2060s.
Wildfire mitigation was another major focus. APS said it has increased spending on defensible space, system upgrades, partnerships with first responders, grid technology for Enhanced Powerline Safety Settings, and fire-sensing cameras installed in 2024. The company also implemented a public safety power shutoff program on certain feeders during the 2024 fire season. APS said it was selected by DOE’s Grid Deployment Office for up to $70 million in federal money for fire mitigation and grid infrastructure projects, subject to final grant agreements.
On the regulatory side, APS said Arizona Governor Katie Hobbs signed a wildfire mitigation law on May 12, 2025 requiring utilities to develop and seek approval for wildfire mitigation plans. APS submitted its Comprehensive Wildfire Mitigation Plan for review, and it expects that process to conclude in the second quarter of 2026.
On affordability, management pointed to inflation and rate trends. It said CPI-U rose 24.9% nationally and 32.1% in Phoenix from 2018 through 2024, while APS’s average residential rates rose 16.2% over the same period. Over the 12 months ended February 2026, CPI-U increased 2.4% nationally and 1.7% in Phoenix. APS said it is using inventory management, long-term contracts, automation, and customer programs to limit cost increases.
APS also highlighted large-load growth and regional market participation. It said it is seeking rate design changes in the 2025 rate case so growth pays for growth, and it is developing long-term contract structures for large customers to cover incremental infrastructure costs. APS said it expects Markets+ to go live in October 2027 and plans to transition to full-binding participation in the Western Resource Adequacy Program in 2027. Until then, it will remain in the Western Energy Imbalance Market. Following these announcements, the company's shares moved -1.11%, and are now trading at a price of $102.30. For more information, read the company's full 10-Q submission here.
