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
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PINNACLE WEST CAPITAL CORPORATION
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Arizona 1-8962 86-0512431
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
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400 East Van Buren St., P.O. Box 52132, Phoenix, Arizona 85072-2132
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(Address of principal executive offices) (Zip code)
(602) 379-2500
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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
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 Arizona Public Service Company ("APS"), 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. APS 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.
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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.
PINNACLE WEST CAPITAL CORPORATION
(Registrant)
Dated: August 6, 1998 By: Faye Widenmann
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Faye Widenmann
Vice President of Corporate Relations
and Administration and Secretary
