SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 27, 2003
PINNACLE WEST CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Arizona 1-8962 86-0512431
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
400 North Fifth Street, P.O. Box 53999, Phoenix, Arizona 85072-3999
(Address of principal executive offices) (Zip Code)
(602) 250-1000
(Registrant's telephone number, including area code)
NONE
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
ACC TRACK B DECISION
As previously reported, on September 10, 2002, the Arizona Corporation
Commission (the "ACC") issued an order that, among other things, established a
requirement that Arizona Public Service Company ("APS") competitively procure
certain power requirements. See "Track A Order" in Note 5 of Notes to Condensed
Consolidated Financial Statements of the Pinnacle West Capital Corporation
Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002.
On February 27, 2003, the ACC approved a decision in the Track B proceeding. The
decision adopted most of the provisions of an ACC administrative law judge's
("ALJ") recommendation that was issued on January 30, 2003.
Under the ACC's Track B decision, APS will be required to solicit bids for
its capacity and energy requirements for periods beginning July 1, 2003. For
2003, APS will be required to solicit competitive bids for about 2,500 megawatts
of capacity and about 4,600 gigawatt-hours of energy, or approximately 20% of
APS' total retail energy requirements. The bid amounts are expected to increase
in 2004 and 2005 based largely on growth in APS' retail load and APS' retail
energy sales. The Track B decision also confirmed that it was "not intended to
change the current rate-base status of [APS'] existing assets."
The decision recognizes APS' right to reject any bids that are
unreasonable, uneconomical or unreliable. The Track B procurement process will
involve the ACC Staff and an independent monitor.
The Track B decision also contains requirements relating to standards of
conduct between APS and any affiliate of APS that may participate in the
competitive solicitation, requires that APS treat bidders in a
non-discriminatory manner, and requires APS to file a protocol regarding
short-term and emergency procurements. The decision permits the provision of
corporate oversight, support and governance as long as such activities do not
favor Pinnacle West Energy Corporation ("Pinnacle West Energy") in the
procurement process or provide Pinnacle West Energy with confidential APS
bidding information that is not available to other bidders. The decision directs
APS to evaluate bids on cost, reliability and reasonableness. The decision
requires bidders to allow the ACC to inspect their plants and requires
assurances of appropriate competitive market conduct from senior officers of
such bidders. Following the solicitation, APS will prepare a report evaluating
environmental issues relating to the procurement and a series of workshops on
environmental risk management will be commenced thereafter.
APS expects to issue requests for proposals in March 2003 and to complete
the selection process by June 1, 2003. Pinnacle West Energy will be eligible to
bid to supply APS' electricity requirements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PINNACLE WEST CAPITAL CORPORATION
(Registrant)
Dated: February 28, 2003 By: Barbara M. Gomez
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Barbara M. Gomez
Treasurer
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