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): May 19, 1998
ARIZONA PUBLIC SERVICE COMPANY
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(Exact name of registrant as specified in its charter)
Arizona 1-4473 86-0011170
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
400 North Fifth Street, P.O. Box 53999, Phoenix, Arizona 85004
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(Address of principal executive offices) (Zip code)
(602) 250-1000
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(Registrant's telephone number, including area code)
NONE
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(Former name or former address, if changed since last report)
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Item 5. Other Events
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Competition
Stranded Cost Hearing. As previously reported, in February 1998 the
Arizona Corporation Commission (the "ACC") completed a generic hearing on
stranded cost determination and recovery. See Note 5 of Notes to Condensed
Financial Statements in the Company's Report on Form 10-Q for the fiscal quarter
ended March 31, 1998 (the "March 10-Q Report"). On June 22, 1998, the ACC issued
an order in that matter. The order allows an "Affected Utility," such as the
Company, to choose between two options for the recovery of its stranded costs.
Under the first option, an Affected Utility that chooses to divest its
generating assets must file a divestiture plan for ACC approval no later than
October 1, 1998, and divestiture must be completed by January 1, 2001, after
which the Affected Utility would be permitted to collect 100 percent of its
stranded costs, including a return on the unamortized balance, over a ten-year
period. Under the second option (referred to by the ACC as the "Transition
Revenues Methodology"), an Affected Utility would be provided sufficient
revenues necessary to maintain financial integrity for a period of ten years or
the ACC would "otherwise provide an allocation of stranded cost responsibilities
and risks between ratepayers and shareholders as is determined to be in the
public interest." The order also states an intent that the various recovery
options "will provide the Affected Utilities sufficient revenues to enable them
to recover appropriate regulatory assets." The order requires each Affected
Utility to file with the ACC, within 60 days of the date of the order, its
choice of options for stranded cost recovery as well as an implementation plan
relating to its chosen option, including its estimated stranded costs separated
out into regulatory assets and other generation related assets.
The Company does not intend to divest its generating assets and will
continue to work with the ACC to reach workable resolutions on stranded cost
recovery. The Company cannot accurately predict the outcome of this matter.
Statement of Position. On May 29, 1998, the Staff of the ACC's
Utilities Division (the "ACC Staff") issued a Statement of Position and asked
for comments on a number of issues related to the implementation of retail
electric competition in Arizona. The Statement of Position, a copy of which has
been filed as an exhibit to this Report on Form 8-K, recommends, among other
things: the divestiture of Affected Utility assets; aggregation of customer
loads for purposes of competition phase-in; acceleration of the date to January
1, 2001 by which all customers would have competitive access; and, rate
reductions for non-eligible customers. Certain of the recommendations in the
Statement of Position are designed to amend the positions set forth in the
framework rules regarding retail electric competition previously adopted by the
ACC.
At the request of the ACC Staff, on May 22, 1998, the Company filed a
response to a draft of the Statement of Position. In the Company's response, the
Company stated that the proposals in the draft Statement of Position (many of
which are included in the final Statement of Position) were deficient or
unlawful in many material respects, met none of the stated objectives
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of the draft Statement of Position, were punitive to Affected Utilities, and
continued to lack the level of detail and specificity required to implement
competition in the next seven months.
On June 4, 1998, the ACC held a special open meeting at which the
Statement of Position was discussed, but no action was taken. The Company cannot
accurately predict what action, if any, the ACC will take with respect to the
Statement of Position.
Agreement with Salt River Project. As previously reported, the
Antitrust Unit of the Arizona Attorney General's Office (the "Antitrust Unit"),
which has been involved in the ongoing regulatory and legislative proceedings
regarding the restructuring of the Arizona electric industry, requested
clarification of certain provisions of a Memorandum of Agreement between the
Company and the Salt River Project Agricultural Improvement and Power District
("Salt River Project"). See Note 5 of Notes to Condensed Financial Statements in
the March 10-Q Report.
Pursuant to an Addendum to Memorandum of Agreement, dated as of May 19,
1998 (the "Addendum"), the Company and Salt River Project amended and clarified
certain provisions of the Memorandum of Agreement in response to certain issues
raised by the Antitrust Unit. By letter dated May 19, 1998, the Antitrust Unit
advised the Company and Salt River Project that, upon their execution of the
Addendum, it would take no action regarding the language of the Memorandum of
Agreement, although it reserved the right to take action in the future if new
information justified doing so. The ACC Hearing Division has set a hearing for
August 6, 1998 so that the ACC may review certain provisions of the Memorandum
of Agreement, as amended.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(c) Exhibits.
Exhibit No. Description
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10.1 Statement of Position of the ACC Staff dated May 29,
1998
10.2 Addendum to Memorandum of Agreement dated as of May
19, 1998
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SIGNATURES
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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.
ARIZONA PUBLIC SERVICE COMPANY
(Registrant)
Dated: June 25, 1998 By: Michael V. Palmeri
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Michael V. Palmeri
Treasurer
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ARIZONA CORPORATION COMMISSION
May 29, 1998
RE: RE-00000C-94-0165
Dear Stakeholder in Retail Electric Competition:
This document is a revision of the draft position paper dated May 19,
1998, which was distributed to interested parties. Attached is Staff's Statement
of Position on several of the significant issues related to retail electric
competition. By this filing, Staff requests that the Commission consider these
issues at an open meeting, scheduled for 10:00 a.m. on June 3, 1998, and provide
guidance as to any subsequent action that may be necessary.
The attached positions were initially developed by a team of Commission
staff members based upon review and consideration of the entire Retail Electric
Competition record which has been developed over the last four years. Staff's
proposal has also been influenced by input from various stakeholders. Staff has
made every effort to meet with and solicit written comments from all interested
stakeholders. Staff has held numerous meetings with groups of stakeholders and
has received written comments from many of the interested parties.
Perhaps because of the open nature of this process, some parties have
expressed concerns regarding the ex parte rule and its relationship to the
development of Staff's proposal. Specifically, some parties apparently believe
that Staff may have discussed stranded cost recovery issues with individual
commissioners. Let me assure you that Staff has been sensitive to the
requirements of the ex parte rule throughout this process. Staff has not
discussed the stranded cost issues with any commissioner during the process of
developing this proposal.
Staff does not view this current proposal as a final package. Staff has
attempted to address the issues involved with implementing the transition to
competition in order to give the Commission and the public a starting point for
the development of subsequent rules. We believe it is appropriate for the
Commissioners to now consider all of these issues together in a public forum.
Ray T. Williamson
Ray T. Williamson
Acting Director
Utilities Division
<PAGE>
ACC Staff Statement of Position on Retail Electric Competition
The following represents Staff's position on several significant issues
related to retail electric competition. Implementation of most of these
positions will require revisions to the current rules.
A. Stranded Cost
The goals of the Arizona Corporation Commission are:
* To avoid vertical and horizontal market power;
* To provide Affected Utilities an opportunity for full
recovery of stranded cost;
* To accurately assess the value of stranded cost;
* To ensure fair and reasonable treatment of all
consumers; and,
* To ensure the financial viability of all Affected
Utilities.
In order to accomplish these objectives, it is the policy of the
Arizona Corporation Commission to encourage full divestiture of
generation assets. Generation assets include, but are not limited to,
generating plants, power purchase contracts, and fuel contracts.
Affected Utilities that voluntarily divest all generation assets shall
have the opportunity to recover 100% of unmitigated stranded cost.
However, Affected Utilities are not required to divest generation
assets.
"Stranded Cost" means the verifiable net difference between:
a. The value of all the prudent jurisdictional assets
and obligations necessary to furnish electricity
(such as generating plants, purchase power contracts,
fuel contracts, and regulatory assets), acquired or
entered into ... under traditional regulation of
Affected Utilities; and
b. The market value of those assets and obligations
directly attributed to the introduction of
competition.
Unmitigated stranded cost shall include reasonable costs necessarily
incurred to effectuate divestiture. In addition, unmitigated stranded
cost shall include reasonable employee severance and retraining costs
necessitated by electric competition, where not otherwise provided.
Unmitigated stranded cost shall include reasonable costs associated
with sale of generation assets.
Each Affected Utility choosing divestiture must, no later than October
1, 1998, file a divestiture plan for Commission approval. Divestiture
must be completed no later than January 1, 2001. No Affected Utility or
its affiliate may purchase assets at any divestiture auction of any
Affected Utility. However, an Affected Utility's affiliate may purchase
the assets of another Affected Utility if the purchasing Affected
Utility's affiliate establishes that it is the highest value bidder and
that the purchase will not create
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or exacerbate significant market power problems. In a divestiture
situation, in no event shall an Affected Utility or its affiliates be
allowed to purchase the Affected Utility's own generating assets.
An Affected Utility shall be permitted to collect 100 percent of its
stranded cost, including a return on its unamortized balance, over a
ten-year period. The Commission will work with the Affected Utility to
provide sufficient assurances in order to avoid triggering write-offs.
If the stranded cost amount is determined to be negative, ratepayers
shall be entitled to receive 100 percent through a refund, negative
surcharge, or other mechanism as approved by the Commission. All
Affected Utilities' customers shall pay their appropriate share of
stranded cost either through a CTC or a standard offer rate. Stranded
cost or other transition revenues authorized by the Commission shall be
collected over no longer than ten years.
If an Affected Utility chooses not to divest, the Affected Utility will
transfer its generation assets to a separate corporate affiliate at a
value determined by the Commission to be fair and reasonable. The terms
of such transfer shall be approved by the Commission and completed
prior to January 1, 2001. Each Affected Utility not choosing
divestiture shall, no later than October 1, 1998, file an asset
transfer proposal for Commission approval.
If an Affected Utility does not choose divestiture, the Commission may
provide sufficient revenues to an Affected Utility to maintain
financial integrity, such as avoiding default under currently existing
financial instruments, or to otherwise provide an allocation of
stranded cost responsibilities and risks between ratepayers and
shareholders, as the Commission determines to be in the public interest
for a given Affected Utility. Regulatory assets shall be fully
recoverable. 100 percent of stranded benefits associated with
generation assets shall be refunded to customers in a manner consistent
with the collection of regulatory assets.
If an Affected Utility can demonstrate that divestiture of any
particular Generation Asset is not practical and not in the public
interest, the Commission in its discretion may provide the Affected
Utility transition revenues, if necessary, to preserve its financial
integrity, but only if such transition revenues are determined by the
Commission to be in the public interest.
B. Affiliate Rules
The goals of the Arizona Corporation Commission are:
* To prevent cost sharing and cross-subsidization
between competitive and monopoly activities;
* To facilitate ease of regulatory oversight;
* To reduce the regulatory burden on the competitive
market; and,
* To prevent anti-competitive behavior by any utility
which interferes with the competitive market.
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In order to accomplish these objectives, it is the policy of the
Arizona Corporation Commission that the Affected Utilities create
separate corporate affiliates for competitive activities. Any board
member or corporate officer of a holding company may also serve in the
same capacity with its utility or affiliate, but not both. The Affected
Utilities will transfer competitive assets to a separate corporate
affiliate at a value determined by the Commission to be fair and
reasonable, subject to hearing. Costs associated with restructuring the
Affected Utility into separate corporate affiliates shall be borne by
the company.
The Affected Utility must offer the same terms and conditions of
service to all competitors and their customers as it offers to any of
its affiliates and their customers. An Affected Utility shall neither
provide, nor represent that it will provide, preferential treatment to
its affiliates or its customers as compared to nonaffiliated companies
or their customers.
Any activity that creates a potential sharing of costs or confidential
information between the Affected Utility and its affiliate is strictly
forbidden unless approved by the Commission. Such activities may
include, but are not limited to, sharing of plant, capital, equipment,
employees, information, and joint purchases.
Joint marketing programs between Affected Utilities and their
affiliates are forbidden unless approved by the Commission. No trade,
promotion or advertising of an affiliate's connection with the parent
utility is allowed unless the affiliate discloses that the affiliate is
separate from the Affected Utility.
The Commission shall develop specific affiliate rules. Affected
utilities shall file respective compliance plans demonstrating the
procedures and mechanisms implemented to ensure activities prohibited
by these rules will not take place.
C. Implementation of Competition
The goals of the Arizona Corporation Commission are:
* To ensure just and reasonable rates in a competitive
market;
* To provide the benefits of competition to all
ratepayers in a timely manner;
* To ensure a smooth transition from monopoly to
competition;
* To ensure that the implementation of competitive
services is technically feasible; and,
* To reduce unnecessary burden caused by the
transition.
In order to accomplish these objectives, it is the policy of the
Arizona Corporation Commission to implement direct access where
technically feasible, offer benefits in lieu of competition to
customers without direct access, reduce the length of the transition
period, and create a Residential Phase-In Program to enable Electric
Service Providers (ESP) and residential customers to gain experience in
the retail electric power market.
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1. Timing and Customer Selection
Customers with load of 1 MW and above will have access to competitive
electric power services on 1/1/99.
Customers with load greater than or equal to 40 kW can be aggregated to
achieve the 1 MW threshold starting on 1/1/99.
All customers will have access to competitive electric services on
1/1/01.
2. Targeted Rate Decreases
Standard offer rates shall be reduced for retail customers who are
unable to choose competitive electric generation during the transition
period. These rate reductions are to be determined separately for each
Affected Utility and are targeted to be in the range of at least 3%-5%.
3. Residential Phase-In Program
An Affected Utility will offer residential customers an opportunity to
participate in a Residential Phase-In Program. 1/2 of 1% of residential
customers will have access to competition on 7/1/99. The number of
customers will be increased by 1/2 of 1% every quarter through the
transition period. Access to the program will be on a first-come
first-serve basis.
An Affected Utility will file a Residential Phase-In Program Proposal
to the Commission for approval by March 31, 1999.
D. Metering and Billing
The goals of the Arizona Corporation Commission are:
* To ensure vigorous competition in the electric power
market;
* To promote efficient consumption of electric power;
* To spur technological innovation;
* To ease the transactional burden of competitive
access; and,
* To ensure reliability of the system.
In order to accomplish these objectives, competitive metering and
billing services will be offered to customers with access to
competitive electric power services.
1. Metering
Competitive metering shall be offered to customers having access to
competitive electric power services as of 1/1/99. These services can be
provided by the Affected Utility, the Electric Service Provider (ESP),
or their Agents.
Customers can own meters provided they are purchased from a ESP or the
Affected Utility and control of the meter remains a responsibility of
the customer's ESP or Affected Utility.
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The Affected Utility may provide metering service within its territory
under a tariffed rate.
A Universal Node Identifier shall be assigned for each service delivery
point by the Affected Utility whose distribution system serves the
customer.
All competitive metering data shall be translated into a consistent,
statewide format that can be used by Affected Utilities and the
Electric Service Providers. Data translation does not have to occur at
the meter. The transmittal of billing data among suppliers will be via
electronic data interface (EDI) data file format.
Competitive customers with an hourly load less than 20 kW will be
permitted to use load profiling after the transition period.
2. Billing
Customers having access to competitive electric power services can
choose whether bills will be provided by the Affected Utility or the
ESP or both.
Functionally, disconnects and connects should be coordinated by the
Affected Utility. Only the Affected Utility may order connects,
disconnects and reconnects.
Customer specific billing data will only be released to parties to whom
customers have given authorization.
All delinquent bills shall be subject to the provisions of the Affected
Utility's termination procedures.
E. Local Distribution Company Services
The goals of the Arizona Corporation Commission are:
* To create a safe haven for customers not choosing
competitive electric power services;
* To ensure access to electric power for all customers;
and,
* To ensure the continued regulation of these services.
In order to accomplish these objectives, an Affected Utility acting as
a Local Distribution Company shall continue to offer bundled electric
power service, or standard offer, to all customers. This service shall
continue to be regulated. In addition, the Affected Utilities shall
continue to finance programs through a system benefits charge.
1. Standard Offer
The Affected Utility will provide Standard Offer Service.
During the transition period, customers can change suppliers every two
billing cycles. After the transition period, customers can change
suppliers at the end of their existing electric service provider's
billing cycle. There shall be no additional constraints for a consumer
switching to or from the Standard Offer Service.
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Subsequent to the transition period, power purchased to serve standard
offer customers will be acquired through competitive bid. These
contracts shall contain provisions allowing the Affected Utility to
ratchet down its power purchases. If the cost of such a ratchet
provision is unreasonable, the Affected Utility may file for an
exemption from this rule.
The Affected Utility, acting as the local distribution company, shall
be the Provider of Last Resort. Reasonable costs incurred in fulfilling
this duty may be recovered through a distribution system-wide tariff
approved by the Commission.
2. System Benefits
The Affected Utility shall continue to offer programs, such as
low-income assistance, demand-side management, and nuclear
decommissioning, financed through a system benefits charge.
F. Transmission and Dispatch
The goals of the Arizona Corporation Commission are:
* To ensure fair and non-discriminatory retail access
to the transmission and distribution system;
* To promote the development of a competitive market
for retail generation; and,
* To ensure continued system reliability.
Affected Utilities shall provide non-discriminatory open access to
transmission and distribution facilities to serve all customers. No
preference shall be given to any distribution customer based upon
whether the customer is purchasing power under the Affected Utility's
standard offer or in the competitive market.
Affected Utilities must join an independent system operator whose
activities include, but are not limited to, the following:
1. Short-run reliability;
2. Administration of grid-wide tariff;
3. Managing congestion and establishing congestion pricing;
4. Planning transmission expansion for reliability and commercial
needs;
5. Emergency operations;
6. Provision and pricing of ancillary services;
7. Facilitate Alternative Dispute Resolution (ADR) process;
8. Operate the Open Access Same-time Information System (OASIS);
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9. Resolve "seams" issues; and,
10. Either develop its own reliability standards or follow
WSCC/NERC (NAERO) standards.
Until an independent system operator is created, the Affected Utilities
must participate in an independent scheduling administrator whose
duties include, but are not limited to, the following:
1. Participate in the determination of Total Transmission
Capacity (TTC);
2. Define, review and exercise oversight of committed use;
3. Responsible for Available Transmission Capacity (ATC)
calculation;
4. Operate overarching OASIS;
5. Receive copy of transmission schedule;
6. Receive and post curtailment information; and,
7. Provide dispute resolution process for transmission use
denials and curtailment orders.
Costs associated with the establishment and operation of the
independent scheduling administrator shall be recovered through a
distribution charge assessed to competitive customers.
Costs associated with the establishment and operation of the
independent system operator shall be recovered from customers using the
transmission system, including the transmission owner's customers,
through FERC-regulated prices, which are set on a non-discriminatory
basis.
The Commission shall determine which generation units are must-run
units for distribution reliability and mitigation of market power, and
will regulate the price of power from such units.
The terms of the must-run contracts will be finalized prior to the
divestiture of the must-run units.
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Addendum to Memorandum of Agrement
This Addendum is to the Memorandum of Agreement effective, April 25,
1998 (hereafter "Memorandum"), between Arizona Public Service Company and Salt
River Project Agricultural Improvement and Power District (hereinafter "the
parties"). By signing this Addendum to Memorandum of Agreement (hereafter
"Addendum") the parties intend to change certain provisions in the Memorandum
and to bind themselves to certain additional obligations in the event their
respective governing boards approve the Memorandum.
By signing this Addendum the parties intend to clarify a number of
provisions in the original Memorandum for the express purpose of eliminating any
interpretation of the Memorandum that could be construed as permittimg
anticompetitive or unlawful conduct, or as being inconsistent with the policy of
the Arizona State Legislature and Arizona Corporation Commission, that there be
competition in certain aspects of the electric utility business as provided by
law.
RECITALS
These facts form the basis of this Addendum:
1. The parties entered into the Memorandum effective April 25, 1998;
2. At the time the Memorandum was executed the Arizona Corporation Commission,
within the scope of its jurisdiction, had declared that it is the policy of this
State that there be competition in certain aspects of the electric utility
business(1), and the Arizona State Legislature was considering a bill to declare
a similar statewide policy;
3. The Arizona Attorney General has raised certain issues involving potential
anticompetitive effects from possible interpretations of certain language in the
Memorandum;
4. The parties do not intend the Memorandum to limit competition in any aspect
of the electric utility business in which the parties are authorized by law to
compete, or in which they choose to compete;
5. The parties do not intend by the incorporation of any part of the 1955
Territorial Agreement, or the Power Coordination Agreement, to continue the
allocation of geographic territories or customer classes with respect to any
aspect of the electric utility business subject to competition;
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(1) The terms "electric utility business" and "electric services" are used
interchangeably in this Addendum, and are intended to mean all aspects of the
business of the parties.
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6. The parties do not intend by the words "operational opportunities" of mutual
benefit to mean the pursuit of any opportunity that would be anticompetitive or
unlawful in any aspect of the electric utility business that is subject to
competition, as of the date of the Memorandum and thereafter;
7. The parties understand that their electric utility business activities that
are not actively regulated are subject to state and federal antitrust law.
ADDENDUM AGREEMENT
Now, therefore, the parties agree as follows.
1. Amendment of Territorial Agreement(2).
The parties hereby repudiate any aspect, language or interpretation of
the 1955 Territorial Agreement that would permit any of the following:
a. The allocation or division of customers or geographic territories as
between the parties regarding non-distribution electric services that are
subject to competion;
b. Any collaborative decision to fix, maintain or stabilize the price
of electric services subject to competition;
2. Amendment of the Power Coordination Agreement
a. The parties agree that the Power Coordination Agreement shall not be
interpreted or performed by the parties in any manner inconsistent with
paragraph 1;
b. The parties agree that nothing in the Power Coordination Agreement
shall permit either to discriminate in access to transmission or distribution
systems against any competitive provider of electric services, in a manner
prohibited by applicable federal and state statute or regulatory requirements.
3. Identification of future savings.
a. The parties agree that paragraph 3 of the Memorandum shall not
permit them to jointly
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(2) Paragraph references in this Addendum refer to the same numbered paragraphs
in the Memorandum, except that the sub-parts of paragraph 1., 2. and 3. are
added by this Addendum.
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make any determination that would fix, maintain or stabilize any price of
electric services subject to competition;
b. The parties agree that paragraph 3 of the Memorandum shall not be
interpreted or performed by the parties in a manner inconsistent with paragraphs
1. and 2. of this Addendum;
c. The parties further agree that their senior executives shall not, in
any meetings to discuss joint business issues, enter into discussions concerning
the price or allocation of territories or customers of any electric service
subject to competition.
5. State Political Issues
a.- i. The parties agree that nothing contained in paragraphs a. - i.
will be construed by them to prevent each from advertising, marketing, and
promoting itself by comparison to the other in terms of price or efficiency in
connection with any aspect of the electric utility business subject to
competition;
d. The parties agree that nothing contained in paragraph 5.d. shall
require that APS disclose any stranded cost or regulatory asset numbers which
are not otherwise publicly available. The parties further agree that paragraph
5.d. shall not require any conformation of bills or billing format, other than
the general obligation that APS disclose the fact that regulatory assets are
recovered as part of its distribution bill;
f. The parties agree that each party will determine independently which
stranded cost calculation and recovery methodology to present to their
respective governing authorities. Such calculation and recovery methodology
shall be determined according to the procedures established by State law or
Arizona Corporation Commission Rule, whichever applies, and shall be in
accordance with federal and state antitrust law, notwithstanding any provision
in the Memorandum to the contrary.
6. Federal Political Issues
a.-g. The parties agree that nothing contained in paragraphs a.-g. will
be construed by them to prevent each from advertising, marketing and promoting
itself by comparison to the other in connection with any aspect of the electric
utility businesss that is subject to competition.
d. The parties agree that by paragraph 6.d. they do not intend to set
up any discriminatory auditing system, entity or mechanism to resolve
transmission system constraints that is not in compliance with applicable
federal and state regulatory or statutory requirements.
7. Transmission and Distribution Prices and Terms
The parties agree that paragraph 7 obligates them to allow access to
their respective
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electric power transmission and distribution facilities to all bona
fide competitors, including, but not limited to each other, under rates
and terms and conditions of service that are nondiscriminatory,
cost-based, just and reasonable and comparable to those charged by
themselves for their own use in accordance with applicable regulatory
or statutory "open access" rules.
10. Miscellaneous Provisions
d. No provision of the Memorandum, the 1955 Territorial Agreement or the 1955
Power Coordination Agreement, shall be binding on any party, successor, assign,
subsidiary or affiliate if a court of competent jurisdiction determines in a
preliminary order or final judgment that the provision violates any antitrust
law.
AGREED TO AS OF May 19, 1998
APS
ARIZONA PUBLIC SERVICE COMPANY
By William J. Post
----------------------------
William J. Post
Chief Executive Officer
Date 5/19/98
---------------------------
SRP
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
By Richard H. Silverman
-----------------------------
Richard H. Silverman
General Manager
Date 5/19/98
----------------------------
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