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): August 5, 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
Competition
ACC Rules. In December 1996, the Arizona Corporation Commission (the "ACC")
adopted rules that provide for a framework for the introduction of retail
electric competition. On August 4, 1998, the ACC adopted amendments to the
rules.
The major components of the amended rules, which apply to all "Affected
Utilities," including the Company, are outlined below:
+ Each Affected Utility is expected to provide competitive generation
service to 20% of its 1995 retail peak demand by January 1, 1999.
Customers eligible for the 20% phase-in beginning January 1, 1999
include (a) customers with specified loads of at least 1 MW and (b)
customers with load demands of at least 40kW that are aggregated into
a combined load of at least 1 MW. In addition, the rules require 100%
of retail customers (including residential customers) access to
competitive services beginning January 1, 2001.
+ Prior to January 1, 2001, residential customers will have access to
competitive services through a quarterly phase-in of one-half percent
of residential customers per quarter beginning January 1, 1999.
+ The rules establish that the ACC shall allow Affected Utilities a
"reasonable opportunity" to recover unmitigated stranded cost.
Affected Utilities are still expected to take reasonable,
cost-effective steps to mitigate stranded costs.
+ Absent a waiver from the ACC, each Affected Utility must separate
itself of all competitive generation assets and services prior to
January 1, 2001. The separation must be either to an unaffiliated
party or to a separate corporate affiliate or affiliates.
+ The rules contain "affiliate transaction rules" generally prohibiting
an Affected Utility and its competitive electric affiliates from
sharing personnel, office space, equipment, services, and systems,
except to the extent appropriate to perform certain permissible shared
corporate support functions.
+ The rules become effective immediately upon filing with the Arizona
Secretary of State; however, the ACC must complete a public process to
formalize the amended rules within six months. The Company anticipates
the completion of this process by year-end 1998 or early 1999.
+ The rules contain a number of other provisions and details related to
operational issues, such as solar power, customer data standards and
an independent system administrator or operator.
All Affected Utilities are required to make the following filings in the next
several months:
+ August 21, 1998 - proposed plan for quantification and recovery of
stranded costs;
+ September 15, 1998 - report "detailing possible mechanisms to provide
benefits, such as rate reductions of 3% to 5%, to all 'standard offer'
customers";
+ September 15, 1998 - proposed plan for residential phase-in
implementation;
+ December 31, 1998 - affiliate rule compliance and restructuring plan.
<PAGE>
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.
ARIZONA PUBLIC SERVICE COMPANY
(Registrant)
Dated: August 6, 1998 By: /s/ Nancy C. Loftin
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Nancy C. Loftin
Vice President, Chief Legal Counsel
and Secretary
