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): November 27, 2000
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
STATE REGULATORY MATTERS
SETTLEMENT AGREEMENT
As previously reported, in December 1999 two parties filed lawsuits
challenging the Arizona Corporation Commission ("ACC") approval of a
comprehensive Settlement Agreement between Arizona Public Service Company (the
"Company") and various parties relating to the implementation of retail electric
competition. See Note 6 of Notes to Condensed Financial Statements in the
Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September
30, 2000 (the "September 2000 10-Q"). With respect to one of the appeals, on
December 26, 2000, the Court of Appeals affirmed the ACC's approval of the
Settlement Agreement. The other appeal, which raises a number of different
issues, is still pending a decision from the court.
RETAIL ELECTRIC COMPETITION RULES
On November 27, 2000, a Maricopa County Superior Court judge issued a final
judgment holding that the Retail Electric Competition Rules (the "Rules") are
unconstitutional and unlawful in their entirety due to failure to establish fair
value rate base and because certain of the Rules were not submitted to the
Arizona Attorney General for certification. See Note 6 of Notes to Condensed
Financial Statements in the Company's September 2000 10-Q for a discussion of
the judge's preliminary rulings in this matter. The judgment also invalidates
all ACC orders authorizing competitive electric service providers in Arizona. We
do not believe the ruling affects the Settlement Agreement with the ACC. The
Settlement Agreement was not at issue in the consolidated cases before the
judge. Further, the ACC made findings related to the fair value of the Company's
property in the order approving the Settlement Agreement.
The ACC and other parties aligned with the ACC have appealed the ruling to
the Court of Appeals, as a result of which the ruling is automatically stayed
pending further judicial review.
COMPANY RESTRUCTURING
The Settlement Agreement and the Rules require us to transfer our
generating assets and competitive services, including wholesale power marketing
and trading activities, to one or more corporate affiliates. Subject to the
receipt of requisite non-ACC approvals, we plan to move certain of our
non-nuclear generating facilities and related assets, as well as certain
employees of our generation business unit, to Pinnacle West Energy Corporation
("PWEC"), a subsidiary of Pinnacle West Capital Corporation ("Pinnacle West"),
during the first half of 2001. Wholesale power marketing and trading activities
are expected to be moved from the Company to Pinnacle West during that same
period.
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FORWARD-LOOKING STATEMENTS
The above discussion contains forward-looking statements that involve risks
and uncertainties. Words such as "estimates," "expects," "anticipates," "plans,"
"believes," "projects," and similar expressions identify forward-looking
statements. These risks and uncertainties include, but are not limited to, the
ongoing restructuring of the electric industry; the outcome of the regulatory
proceedings relating to the restructuring; regulatory, tax, and environmental
legislation; our ability to successfully compete outside traditional regulated
markets; regional economic conditions, which could affect customer growth; the
cost of debt and equity capital; weather variations affecting customer usage;
technological developments in the electric industry; and the successful
completion of large-scale construction projects. These factors and the other
matters discussed above may cause future results to differ materially from
historical results, or from results or outcomes we currently expect or seek.
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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.
ARIZONA PUBLIC SERVICE COMPANY
(Registrant)
Dated: January 10, 2001 By: Michael V. Palmeri
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Michael V. Palmeri
Vice President, Finance
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