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) December 15, 1993
ARIZONA PUBLIC SERVICE COMPANY
(Exact name of registrant as specified in its charter)
Arizona 1-4473 86-0011170
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
400 North Fifth Street, P.O. Box 53999, Phoenix, Az 85004
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (602)250-1000
NONE
(Former name or former address, if changed since last report)
ITEM 5. Other Events
Palo Verde Nuclear Generating Station
On December 26, 1993 Unit 3 of the Palo Verde Nuclear Generating Station
("Palo Verde") returned to service at 85% power following a mid-cycle outage
during which Arizona Public Service Company (the "Company") inspected Unit
3's steam generators. See Note 9 of Notes to Financial Statements in the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended Septem-
ber 30, 1993 (the "September 10-Q"). The Company has informed the Nuclear
Regulatory Commission (the "NRC") that the inspection did not reveal the
type of tube degradation (axial cracking in upper bundle) experienced in
Unit 2's steam generators; however, the inspection did reveal another more
common type of tube degradation (circumferential cracking at tubesheet) in
the unit's steam generators which has occurred in similarly-designed steam
generators at other plants. The next regular refueling outage for Unit 3 is
scheduled to begin in March 1994, at which time the Company plans to inspect
and chemically clean that unit's steam generators.
On January 8, 1994, the Company removed Unit 2 from service to inspect
and chemically clean its two steam generators during a mid-cycle outage.
The initial inspection and the cleaning have been completed, and one of the
steam generators is currently being reinspected. To date the inspection has
revealed additional tube degradation of the type (axial cracking in upper
bundle) previously found in that unit's steam generators. The inspection
has also revealed the common type of tube degradation (circumferential
cracking at tubesheet) which has occurred in similarly-designed steam gener-
ators at other plants. Based on these findings, the Company has expanded
the scope of the inspection of the Unit 2 steam generators and the planned
duration of the outage until mid to late March. However, because the
Company's analysis of Unit 2's steam generators is ongoing, the Company
cannot predict with certainty the timing of the restart of Unit 2. The
Company is currently evaluating the need for an additional mid-cycle outage
for Unit 2 during 1994.
Unit 1 continues to operate at 85% power since it returned to service in
late November 1993 after its refueling outage. See Note 9 of Notes to Fi-
nancial Statements in the September 10-Q for more information.
The Company has performed, and is continuing, certain corrective actions
including among other things, chemical cleaning, operating the units at
reduced temperatures, and, for some period, operating the units at 85% pow-
er. As a result of these corrective actions, all three units should be
returned to 100% power by mid 1995, and one or more of the units could be
returned to 100% power during the course of 1994. So long as the three
units are involved in mid-cycle outages and are operated at 85% power, the
Company estimates that it will incur additional fuel and purchased power
costs averaging approximately $2 million per month (before income taxes).
As previously disclosed, by letter dated July 7, 1993, the NRC advised
the Company that, as a result of a Recommended Decision and Order by a De-
partment of Labor Administrative Law Judge (the "DOL ALJ") finding that the
Company discriminated against a former contract employee at Palo Verde be-
cause he engaged in "protected activities" (as defined under federal regula-
tions), the NRC intended to schedule an enforcement conference with the Com-
pany. See "Palo Verde Nuclear Generating Station" in Part II, Item 5 of the
September 10-Q, and in Part II, Item 5 of the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended June 30, 1993.
Following the DOL ALJ's finding, the Company investigated various ele-
ments of both the substantive allegations and the manner in which the U. S.
Department of Labor (the "DOL") proceedings were conducted. As a result of
that investigation, the Company determined that one of its employees had
falsely testified during the proceedings, that there were inconsistencies in
the testimony of another employee, and that certain documents were requested
in, but not provided during, discovery. The two employees in question are
no longer with the Company. The Company provided the results of its inves-
tigation to the DOL ALJ, who referred matters relating to the conduct of the
two former employees of the Company to the U.S. Attorney's office in Phoe-
nix, Arizona. On December 15, 1993, the Company and the former contract
employee who had raised the DOL claim entered into a settlement agreement, a
part of which remains subject to approval by the Secretary of Labor.
By letter dated August 10, 1993, the Company also provided the results of
its investigation to the NRC, and advised the NRC that, as a result of the
Company's investigation, the Company had changed its position opposing the
finding of discrimination. The NRC is investigating this matter and the
Company is fully cooperating with the NRC in this regard.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ARIZONA PUBLIC SERVICE COMPANY
(Registrant)
Dated: February 17, 1994 By Nancy E. Newquist
Nancy E. Newquist
Treasurer
