Arizona Public Service gets hearing date

SAN FRANCISCO, Feb. 21, 2002 — The Arizona Corporation Commission (ACC) has set April 29, 2002, as the date for a hearing to take place on Arizona Public Service’s (APS; BBB+/Stable/A-2) request for a variance to a regulatory plan signed in 1999.

The plan, among other things, obliges APS to acquire 50% of its standard offer generation requirements through a competitive bidding process.

A review of the 1999 settlement agreement could have far-reaching consequences for retail restructuring in Arizona. In particular, the outcome of the procedure could have a significant impact on Pinnacle West Capital Corp. (PWCC; BBB/Stable/–), the parent of APS.

This is because APS’s variance request includes a proposal to purchase under a long-term contract a substantial portion of its energy needs from PWCC and bid out only a small portion of total generation requirements through a competitive bidding process.

Standard & Poor’s will monitor ACC’s actions closely for any changes to the 1999 settlement that might affect PWCC and its subsidiaries.

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