Becoming More Sustainable

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Becoming More Sustainable

• The Role of Technology Innovation

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Our future is a shared one with our customers,
shareholders, employees and the communities in
which we live and do business.
Jack E. DavisPresident Pinnacle West Capital
Corporation
- PNW Corporate Responsibility Report
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Pinnacle West Capital Corporation

• Member of Standard and Poors 500 Index and
  traded on the New York Stock Exchange under the
  symbol PNW
• Phoenix-based company with consolidated assets of
  about 11 billion and consolidated revenues of
  3 billion
• Three principal business segments include
  regulated electricity, real estate, and energy
  services marketing and trading
• 7,300 employees
• Ranks number one industry-wide in dividend
  growth over the last decade

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Arizona Public Service Company (APS)

• PNWs largest subsidiary
• Serves over 1 million customers across Arizona
• 7th Largest service territory with growth 4
  times U.S. average
• Owns combined generation capacity in excess of
  6,400 megawatts (MW) and operates plants with a
  combined capacity in excess of 10,000 MW
• Ranked first among investor-owned electric
  utilities in the West and third among
  investor-owned utilities in the nation in J.D.
  Power and Associates' 2005 Electric Utility
  Residential Customer Satisfaction Study

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APS Part of Arizona for 120 Years

• Arizona
• Growth 3 X U.S. Average
• 94 Years Old
• 52 People/Square Mile
• APS
• Growth 4 X U.S. Average
• 120 Years Old
• 29 Customers/Square Mile
• 7th Largest Service Territory

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History of Leadership

• First EHS policy in 1973
• First utility to endorse Ceres Principles in 1994
• Published first EHS report for 1994
• Began incorporating Global Reporting Initiative
  (GRI) guidelines in 2000
• Published first Corporate Responsibility report
  in 2004

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Leadership / Innovation

• Ni-Mo inter-pollutant trade agreement
• 1995 Climate Challenge
• Renewables
• Voluntary emission reductions
• Fossil Creek

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Were Building An Energy System That Is Newer,
Better, Cleaner, and Faster

• Diversity is the Key

Conservation
Renewables
Demand Management
Coal
Nuclear
Natural Gas
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Renewables And Conservation A Rapidly Growing
Part of our Energy Future

• Diversity is the Key

Conservation
Renewables
Demand Management
Coal
Nuclear
Natural Gas
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Energy Saving Tips and Rebates Helps Customers
Keep Costs Down
Rebate of Residents 3 per watt Solar Panels
Rebate of 250 for 14SEER Unit 400 for
16SEER Unit
Sponsored Discount on High-efficient Light Bulbs
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Our Customers Save Money Everyday with the
Nations Largest Time-of-Usage (TOU) Rate Program
Time-of-Usage Customers
Megawatts Avoided
450,000
225
200
400,000
Now
New Program
Now
New Program
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But APS Faces Challenges Beyond Renewables and
Efficiencies by 2025
Still needed
DSM / Conservation
Renewables
7,298 MW
2,563 MW
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TechnologyA part of the solution

• Improved efficiencies
• Reduction of waste recycling
• Powering our future

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Single Axis Trackers

• Horizontal and Tilted Single Axis Trackers
• New truss design eliminates need for deep
  foundation construction
• Simplified mechanical design
• Updating tracking controls and software
• 3rd party interest

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HCPV Development

• Boeing Spectrolab Space cells
• 38 conversion efficiency
• 1kW prototype running at STAR
• 2nd generation, 3kW unit assembled waiting to
  test

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Solar Compressed Air Turbine

• Concept is to compress air separately from solar
  cycle
• Off-peak electric compression
• Full turbine output during the day
• SolarCAT development team
• APS
• Brayton Energy LLC
• CEC
• SMUD
• SDGE
• Nyserda

Standard Turbine 60 of power is used in
compression
Turbine Storage Off-peak electric compression
storage
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Saguaro Trough

• Completed in December 2005
• First Trough project in the USA for over 15 years
• First to marry a solar trough solar field to an
  Organic Rankine Cycle turbine power block
• 1 MW Capacity

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Biomass Pilots

• Biomass
• Eagar
• 3MW forest waste
• On-line February 2004
• Snowflake
• 3MW forest waste
• Under construction

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Pinal County CAFO Project

• Phase I manure study
• 36 feedlots in Casa Grande, Florence, Maricopa,
  Red Rock, Stanfield areas
• 200,000 cattle within a 30 mile radius
• 4.6 M Tons of manure annually
• 70 pack, 30 slurry
• Gasifier and digester technologies
• Over 2,000,000 Chickens
• Potential for over 30MW of generation capacity
• Phase II financial study

150 W
150 W
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Renewable Energy - Electricity Generation

• Biogas
• Butterfield landfill
• 70kW microturbine
• 91st Avenue WWTP
• Renewable methane purchase
• 10MW generation at Redhawk

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Geothermal Energy
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Geothermal Binary Power Plant

• 350ºF brine pumped out of production well
• Boils pentane in a heat exchanger
• Cooled brine re-injected into the earth
• Pentane vapor used to power a turbine/generator

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Future Fuels - Demonstrations

• Hydrogen refueling station
• 502 Complex
• Dispense Hydrogen, CNG and blends
• All major credit cards accepted
• Hydrogen Power Park
• Industrial enclave powered by Hydrogen

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Hydrogasification

• Gasify carbon
• Coal
• Biomass
• Manure
• Synthetic natural gas (un-natural gas?)
• 2.6M grant from DOE

C 2H2 H2O ? CO2 CH4
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Algae

• Use CO2 from Redhawk stack
• Grow algae strains
• Extract the lipid oil from the algae
• Produce bio-diesel, methanol or methane
• In one year a one acre algae farm can produce
• 6,000gal biodiesel
• 5,000 gal ethanol
• 80,000 lb high protein animal feed

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ALGAE HAS MULTIPLE ENERGY USES
Biodiesel Ethanol, CH4 and Bioplastics Animal
Feed Green Power Biohydrogen
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Future Fuels - Demonstrations
Scrubbed flue gas
Sunlight
Algae consume CO2 NOX
Flue gas in
Flue gas in
Algal biofuel out
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Education and Outreach Renewable Energy

• APS Road to Renewable Energy Program
• R2Re is a compilation of graphic posters,
  presentations and interactive worksheets for the
  classroom
• Primarily focused on AZ school grades 4 - 9
• Available in three different formats
• CD
• APS website http//www.aps.com/my_community/renewa
  ble/energy_1.html.
• Book

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SUSTAINABILITY OUR PATHWAY TO ENERGY SECURITY
Ruins of a civilization which disappeared in the
Four Corners area of the USA. Only their empty
dwellings tell us they ever existed.