Pinnacle West Capital

“APS is, or may become, subject to numerous environmental laws and regulations affecting many aspects of its present and future operations, including air emissions of conventional pollutants and GHGs, water quality, discharges of wastewater and waste streams originating from fly ash and bottom ash handling facilities, solid waste, hazardous waste, and coal combustion products, which consist of bottom ash, fly ash, and air pollution control wastes. These laws and regulations can result in increased capital, operating, and other costs, particularly with regard to enforcement efforts focused on power plant emissions obligations. They could also impact the overall business environment in Arizona and affect APS’s customer and sales growth rates.”

Annual report 2025A · The company itself

“Due to current or potential future regulations or legislation coupled with trends in natural gas and coal prices, or other clean energy rules or initiatives, the economics or feasibility of continuing to own certain resources, particularly coal facilities, may deteriorate, warranting early retirement of those plants, which may result in asset impairments. APS would seek recovery in rates for the book value of any remaining investments in the plants as well as other costs related to early retirement but cannot predict whether it would obtain such recovery.”

Annual report 2025A · The company itself

“In expressing concerns about the environmental and climate-related impacts from continued extraction, transportation, delivery and combustion of fossil fuels, environmental advocacy groups and other third parties have in recent years undertaken greater efforts to oppose the permitting, construction, and operation of fossil fuel infrastructure projects. These efforts may increase in scope and frequency depending on a number of variables, including the future course of Federal environmental regulation and the increasing financial resources devoted to these opposition activities.”

Annual report 2025A · The company itself

“APS’s sources of energy by type used to supply energy to Native Load customers during 2025 were approximately as follows: APS has a diverse portfolio of existing and planned resources, including biomass, biogas, coal, energy storage, geothermal, natural gas, solar, and wind. APS has an aspirational goal to be carbon-neutral by 2050, meaning that for any GHG emissions still produced by generation resources in 2050, APS will aim to offset these emissions elsewhere. In 2025, the share of APS’s energy supply derived from clean resources was approximately 58%, which includes energy from nuclear, renewables, and DSM as well as PPAs with clean resources.”

Annual report 2025A · The company itself

“Current laws and regulations as well as changes to those laws and regulations, including via judicial decisions and executive orders, create strategic challenges in acquiring an appropriate generation portfolio and fuel diversification mix. APS is required by the ACC to meet certain energy resource portfolio requirements, including those related to renewables development and energy efficiency measures, in addition to specific competitive resource procurement requirements.”

Annual report 2025A · The company itself

“APS’s 2025 peak one-hour demand on its electric system was recorded on August 7, 2025, at 8,648 MW, compared to the 2024 peak of 8,210 MW recorded on August 4, 2024.”

Annual report 2025A · The company itself

“This practice is becoming more popular with customers installing or having installed products such as rooftop solar panels to meet or supplement their energy needs. While historically this practice has been largely focused on customers installing behind the meter technologies, such as rooftop solar panels or back-up generators to meet or supplement their energy needs, today APS and utilities broadly are seeing a rise in large customers seeking to develop or accelerate large, utility scale generation projects to serve their energy needs.”

Annual report 2025A · The company itself

“Weather conditions directly influence the demand for electricity and affect the price of energy commodities. Electric power demand is generally a seasonal business. In Arizona, demand for power peaks during the hot summer months, with market prices also peaking at that time.”

Annual report 2025A · The company itself

“Table of Contents BUSINESS OF ARIZONA PUBLIC SERVICE COMPANY APS currently provides electric service to approximately 1.4 million customers.”

Annual report 2025A · The company itself

“APS is exposed to the impact of market fluctuations in the price and transportation costs of electricity, natural gas, and coal to the extent that unhedged positions exist. We have established procedures to manage risks associated with these market fluctuations by utilizing various commodity derivatives, including exchange traded futures and over-the-counter (“OTC”) forwards, options, and swaps.”

Annual report 2025A · The company itself

“Among other strategies, APS intends to achieve this goal through various methods such as relying on Palo Verde, one of the nation’s largest producers of carbon-free energy; seeking a balanced energy mix; managing demand with a modern interactive grid; promoting customer technology and energy efficiency; and optimizing regional resources.”

Annual report 2025A · The company itself

“Western Energy Imbalance Market and Wholesale Market In 2016, APS began to participate in the WEIM, a voluntary, real-time optimization market operated by the CAISO. The WEIM allows for rebalancing supply and demand in 15-minute blocks and dispatching generation every five minutes, instead of the traditional one-hour blocks. APS continues to expect that its participation in the WEIM will lower its fuel and purchased-power costs, improve situational awareness for system operations in the Western Interconnection power grid, and improve integration of APS’s renewable resources.”

Annual report 2025A · The company itself

“In addition, APS is participating in the Western Resource Adequacy Program administered by Western Power Pool and is transitioning to full binding participation in 2027 or 2028.”

Annual report 2025A · The company itself

“Table of Contents BUSINESS OF ARIZONA PUBLIC SERVICE COMPANY APS currently provides electric service to approximately 1.4 million customers.”

Annual report 2025A · The company itself

“In 2025, the share of APS’s energy supply derived from clean resources was approximately 58%, which includes energy from nuclear, renewables, and DSM as well as PPAs with clean resources.”

Annual report 2025A · The company itself

“Nuclear Palo Verde Generating Station — Palo Verde is a 3-unit nuclear power plant located approximately 50 miles west of Phoenix, Arizona. APS operates the plant and owns 29.1% of Palo Verde Units 1 and 3 and approximately 23.9% of Unit 2. In addition, APS leases approximately 5.2% of Unit 2, resulting in a 29.1% combined ownership and leasehold interest in that unit. APS has a total entitlement from Palo Verde of 1,146 MW.”

Annual report 2025A · The company itself

“This practice is becoming more popular with customers installing or having installed products such as rooftop solar panels to meet or supplement their energy needs. While historically this practice has been largely focused on customers installing behind the meter technologies, such as rooftop solar panels or back-up generators to meet or supplement their energy needs, today APS and utilities broadly are seeing a rise in large customers seeking to develop or accelerate large, utility scale generation projects to serve their energy needs.”

Annual report 2025A · The company itself

“Alternative energy technologies that produce power or reduce power consumption or emissions are being developed and commercialized, including renewable technologies such as photovoltaic (solar) cells, customer-sited generation, energy storage (batteries) and efficiency technologies. Advances in technology and equipment/appliance efficiency could reduce the demand for supply from conventional generation, including carbon-free nuclear generation, and increase the complexity of managing APS’s information technology and power system operations, which could adversely affect APS’s business.”

Annual report 2025A · The company itself

“Deployment of renewable energy technologies is expected to continue across the western states and result in a larger portion of the overall energy production coming from these sources. These trends, which have benefited from historical and continuing government support for certain technologies, have the potential to put downward pressure on wholesale power prices throughout the western states which could make APS’s existing generating facilities less economical and impact their operational patterns and long-term viability.”

Annual report 2025A · The company itself

“Modification of the ACC’s retail electric competition rules or other efforts of deregulation and other factors, such as customers installing behind the meter technologies or large customers developing large, utility scale generation projects to serve their energy needs, may result increased competition, which could have a significant adverse impact on APS’s business and results of operations.”

Annual report 2025A · The company itself

“Current laws and regulations as well as changes to those laws and regulations, including via judicial decisions and executive orders, create strategic challenges in acquiring an appropriate generation portfolio and fuel diversification mix. APS is required by the ACC to meet certain energy resource portfolio requirements, including those related to renewables development and energy efficiency measures, in addition to specific competitive resource procurement requirements.”

Annual report 2025A · The company itself

“Location Actual/Target Commercial Operation Date Net Capacity (MW) In Operation Net Capacity (MW) Planned/Under Development Solar: Paloma Gila Bend, AZ 2011 17 Cotton Center Gila Bend, AZ 2011 17 Hyder I Hyder, AZ 2012 17 Chino Valley Chino Valley, AZ 2012 20 Hyder II Hyder, AZ 2013 14 Foothills Yuma, AZ 2013 38 Gila Bend Gila Bend, AZ 2014 36 Luke AFB Glendale, AZ 2015 11 Desert Star Buckeye, AZ 2015 10 Red Rock Red Rock, AZ 2016 44 Agave Solar Arlington, AZ 2023 150 Ironwood Solar Dateland, AZ (a) 168 Multiple Facilities AZ Various 4 Distributed Energy: (b) APS Owned (c) AZ Various 41 Total APS Owned 419 168 (a)This project met plant in service criteria as of December 31, 2025.”

Annual report 2025A · The company itself

“Agreements for the development and completion of future resources are subject to various conditions, including successful siting, permitting and interconnection of the projects to the electric grid.”

Annual report 2025A · The company itself

“Additionally, the future demand from these customers may not be realized to the extent currently projected and significant uncertainties exist regarding the future energy demand associated with data centers and AI. The difficulty in forecasting these demands and the 36 Table of Contents additional risk of these arrangements could lead to stranded costs and other effects that could have material adverse impacts on APS’s financial condition, results of operations, and cash flows.”

Annual report 2025A · The company itself

“APS’s strategy, including the timing of such strategy, in adopting new technologies, such as artificial intelligence, could also adversely impact APS’s business. For example, if APS fails to strategically implement artificial intelligence, it could miss the opportunity for cost savings, face increasing costs on legacy systems, insufficiently integrate internal and external data sets, or invest in low data quality, risk misusing artificial intelligence, impact employee satisfaction with its implementation of or failure to implement artificial intelligence and other technologies.”

Annual report 2025A · The company itself

“Recent industry trends and projections of load growth reflect significant demand from data centers to support AI as well as onshoring of manufacturing, such as advanced semiconductor manufacturing. These data centers and large manufacturers may locate their operations within service territories other than our own. If they do choose to locate within our service territory, we may not be able to provide sufficient electric service within the time period they require due to capital or other constraints.”

Annual report 2025A · The company itself

“Additionally, the future demand from these customers may not be realized to the extent currently projected and significant uncertainties exist regarding the future energy demand associated with data centers and AI. The difficulty in forecasting these demands and the 36 Table of Contents additional risk of these arrangements could lead to stranded costs and other effects that could have material adverse impacts on APS’s financial condition, results of operations, and cash flows.”

Annual report 2025A · The company itself

“The capital expenditures table presented in the “Liquidity and Capital Resources” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of this report includes new APS transmission projects, along with other transmission costs for upgrades and replacements, including those for data center and semi-conductor manufacturing development.”

Annual report 2025A · The company itself

“Recent industry trends and projections of load growth reflect significant demand from data centers to support AI as well as onshoring of manufacturing, such as advanced semiconductor manufacturing. These data centers and large manufacturers may locate their operations within service territories other than our own. If they do choose to locate within our service territory, we may not be able to provide sufficient electric service within the time period they require due to capital or other constraints.”

Annual report 2025A · The company itself

“Deployment of renewable energy technologies is expected to continue across the western states and result in a larger portion of the overall energy production coming from these sources. These trends, which have benefited from historical and continuing government support for certain technologies, have the potential to put downward pressure on wholesale power prices throughout the western states which could make APS’s existing generating facilities less economical and impact their operational patterns and long-term viability.”

Annual report 2025A · The company itself

“Current laws and regulations as well as changes to those laws and regulations, including via judicial decisions and executive orders, create strategic challenges in acquiring an appropriate generation portfolio and fuel diversification mix. APS is required by the ACC to meet certain energy resource portfolio requirements, including those related to renewables development and energy efficiency measures, in addition to specific competitive resource procurement requirements.”

Annual report 2025A · The company itself

“Agreements for the development and completion of future resources are subject to various conditions, including successful siting, permitting and interconnection of the projects to the electric grid.”

Annual report 2025A · The company itself

“Like many companies in the electric utility industry, our workforce is maturing, with approximately 26.1% of employees eligible to retire by the end of 2030. Although we have undertaken efforts to recruit, train and develop new employees, we face increased competition for talent. We are subject to other employee workforce factors, such as the availability and retention of qualified personnel and the need to negotiate collective bargaining agreements with union employees.”

Annual report 2025A · The company itself

“Human Capital The Company’s success depends on a strong human capital strategy including attracting, developing, and retaining a high-performing workforce. We are committed to fostering a safe, inclusive, and engaging work environment that empowers all employees to reach their full potential.”

Annual report 2025A · The company itself

“APS’s sources of energy by type used to supply energy to Native Load customers during 2025 were approximately as follows: APS has a diverse portfolio of existing and planned resources, including biomass, biogas, coal, energy storage, geothermal, natural gas, solar, and wind. APS has an aspirational goal to be carbon-neutral by 2050, meaning that for any GHG emissions still produced by generation resources in 2050, APS will aim to offset these emissions elsewhere. In 2025, the share of APS’s energy supply derived from clean resources was approximately 58%, which includes energy from nuclear, renewables, and DSM as well as PPAs with clean resources.”

Annual report 2025A · The company itself

“Table of Contents BUSINESS OF ARIZONA PUBLIC SERVICE COMPANY APS currently provides electric service to approximately 1.4 million customers.”

Annual report 2025A · The company itself

“The capital expenditures table presented in the “Liquidity and Capital Resources” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of this report includes new APS transmission projects, along with other transmission costs for upgrades and replacements, including those for data center and semi-conductor manufacturing development.”

Annual report 2025A · The company itself

“APS also intends to harden its infrastructure in order to improve resiliency, which involves system and operational improvements aimed at reducing the impact of extreme weather events and other disruptions upon APS’s operations. Wildfire safety remains a critical focus for APS and other utilities. APS has increased investment in fire mitigation efforts to clear defensible space around its infrastructure, continue ongoing system upgrades, build partnerships with government entities and first responders, and educate customers and communities.”

Annual report 2025A · The company itself

“In addition, APS has historically sold less power, and consequently earned less income, when weather conditions are milder. As a result, unusually mild weather could diminish APS’s financial condition, results of operations, or cash flows.”

Annual report 2025A · The company itself

“Weather extremes such as drought and high temperature variations are common occurrences in the southwestern United States’ desert area, and these are risks that APS considers in the normal course of business in the engineering and construction of its electric system. Large increases in ambient temperatures could require evaluation of certain materials used within its system and may represent a greater challenge. Limitations on water supplies necessary to operate electric generation infrastructure could arise from prolonged drought and shortage declarations associated with key surface water resources.”

Annual report 2025A · The company itself

“Table of Contents Higher temperatures may decrease the snowpack, which might result in lowered soil moisture and an increased threat of wildfires. Wildfires could threaten APS’s communities and electric transmission lines and facilities. Any damage caused as a result of wildfires could negatively impact APS’s financial condition, results of operations, or cash flows.”

Annual report 2025A · The company itself

“In addition, the decrease in snowpack can also lead to reduced water supplies in the areas where APS relies upon non-renewable water resources to supply cooling and process water for electricity generation. Prolonged and extreme drought conditions can also affect APS’s long-term ability to access the water resources necessary for thermal electricity generation operations. Reductions in the availability of water for power plant cooling could negatively impact APS’s financial condition, results of operations, or cash flows.”

Annual report 2025A · The company itself

“In addition, the region in which APS’s power plants are located suffers from prolonged drought conditions, which could potentially affect the plants’ water supplies. Climate change is projected to exacerbate such 38 Table of Contents drought conditions. Colorado River water supplies for Arizona are subject to shortage declarations that substantially limit the quantity of water available to the state.”

Annual report 2025A · The company itself

“Wildfires have the potential to affect communities within APS’s service territory and the surrounding areas, as well as APS’s vast network of electric transmission and distribution lines and facilities. The potential likelihood and severity of wildfires has increased due to many of the same weather and climate change impacts existing in Arizona as those that led to catastrophic wildfires in other states. The continued expansion of the wildland urban interface has also increased wildfire risk to surrounding communities.”

Annual report 2025A · The company itself

“However, APS’s fire mitigation efforts may be insufficient to prevent wildfires in APS’s expansive service territory and surrounding areas and could result in claims alleging damages due to the use, non-use, timing, or effectiveness of such measures. In addition, APS could be sued regardless of fault for damages incurred as a result of wildfires and may not be able to recover all or a substantial portion of any such damages or costs from insurance or through rates.”

Annual report 2025A · The company itself

“The economics of continuing to own certain resources, particularly our coal plants, may deteriorate, warranting early retirement of those plants, which may result in asset impairments. APS would seek recovery in rates for the book value of any remaining investments in the plants as well as other costs related to early retirement but cannot predict whether it would obtain such recovery.”

Annual report 2025A · The company itself

“Due to current or potential future regulations or legislation coupled with trends in natural gas and coal prices, or other clean energy rules or initiatives, the economics or feasibility of continuing to own certain resources, particularly coal facilities, may deteriorate, warranting early retirement of those plants, which may result in asset impairments. APS would seek recovery in rates for the book value of any remaining investments in the plants as well as other costs related to early retirement but cannot predict whether it would obtain such recovery.”

Annual report 2025A · The company itself

“NTEC, a company formed by the Navajo Nation to own the mine that serves Four Corners and develop other energy projects, is the coal supplier for Four Corners. The Four Corners co-owners executed a long-term agreement for the supply of coal to Four Corners from July 2016 through 2031, which was amended and restated on July 1, 2024.”

Annual report 2025A · The company itself

“APS ceased coal-burning operations at Cholla in March 2025 and formally retired Cholla Units 1 and 3 on April 30, 2025.”

Annual report 2025A · The company itself

“APS is exposed to the impact of market fluctuations in the price and transportation costs of electricity, natural gas, and coal to the extent that unhedged positions exist. We have established procedures to manage risks associated with these market fluctuations by utilizing various commodity derivatives, including exchange traded futures and over-the-counter (“OTC”) forwards, options, and swaps.”

Annual report 2025A · The company itself

“APS’s 2025 peak one-hour demand on its electric system was recorded on August 7, 2025, at 8,648 MW, compared to the 2024 peak of 8,210 MW recorded on August 4, 2024.”

Annual report 2025A · The company itself

“Weather conditions directly influence the demand for electricity and affect the price of energy commodities. Electric power demand is generally a seasonal business. In Arizona, demand for power peaks during the hot summer months, with market prices also peaking at that time.”

Annual report 2025A · The company itself

“General economic factors that are beyond the Company’s control impact the Company’s forecasts and actual performance. These factors include interest rates; recession; inflation; stagflation; deflation; supply chain constraints; unemployment trends; sanctions, trade restrictions, military interventions and the threat or possibility of war; terrorism or other global or national unrest; and political or financial instability.”

Annual report 2025A · The company itself

“Weather extremes such as drought and high temperature variations are common occurrences in the southwestern United States’ desert area, and these are risks that APS considers in the normal course of business in the engineering and construction of its electric system. Large increases in ambient temperatures could require evaluation of certain materials used within its system and may represent a greater challenge. Limitations on water supplies necessary to operate electric generation infrastructure could arise from prolonged drought and shortage declarations associated with key surface water resources.”

Annual report 2025A · The company itself

“In addition, the decrease in snowpack can also lead to reduced water supplies in the areas where APS relies upon non-renewable water resources to supply cooling and process water for electricity generation. Prolonged and extreme drought conditions can also affect APS’s long-term ability to access the water resources necessary for thermal electricity generation operations. Reductions in the availability of water for power plant cooling could negatively impact APS’s financial condition, results of operations, or cash flows.”

Annual report 2025A · The company itself

“In addition, the region in which APS’s power plants are located suffers from prolonged drought conditions, which could potentially affect the plants’ water supplies. Climate change is projected to exacerbate such 38 Table of Contents drought conditions. Colorado River water supplies for Arizona are subject to shortage declarations that substantially limit the quantity of water available to the state.”

Annual report 2025A · The company itself

“There appears to be an increasing level of activity, sophistication, and maturity of threat actors, including from both nation-state and non-nation state actors, that seek to exploit potential vulnerabilities in the electric utility industry and wish to disrupt the U.S. bulk power system, our information technology systems, generation (including our Palo Verde nuclear facility), transmission and distribution facilities, and other infrastructure facilities and systems and physical assets. We have been and could be the target of attacks, and the aforementioned systems are critical areas of cyber protection for us.”

Annual report 2025A · The company itself

“In expressing concerns about the environmental and climate-related impacts from continued extraction, transportation, delivery and combustion of fossil fuels, environmental advocacy groups and other third parties have in recent years undertaken greater efforts to oppose the permitting, construction, and operation of fossil fuel infrastructure projects. These efforts may increase in scope and frequency depending on a number of variables, including the future course of Federal environmental regulation and the increasing financial resources devoted to these opposition activities.”

Annual report 2025A · The company itself

“General economic factors that are beyond the Company’s control impact the Company’s forecasts and actual performance. These factors include interest rates; recession; inflation; stagflation; deflation; supply chain constraints; unemployment trends; sanctions, trade restrictions, military interventions and the threat or possibility of war; terrorism or other global or national unrest; and political or financial instability.”

Annual report 2025A · The company itself

“In particular, in recent years the United States’ economy experienced a substantial rise in the inflation rate and more recently in 2025 the Trump administration has implemented tariffs and discussed additional tariffs, which would further increase costs.”

Annual report 2025A · The company itself

“APS is, or may become, subject to numerous environmental laws and regulations affecting many aspects of its present and future operations, including air emissions of conventional pollutants and GHGs, water quality, discharges of wastewater and waste streams originating from fly ash and bottom ash handling facilities, solid waste, hazardous waste, and coal combustion products, which consist of bottom ash, fly ash, and air pollution control wastes. These laws and regulations can result in increased capital, operating, and other costs, particularly with regard to enforcement efforts focused on power plant emissions obligations. They could also impact the overall business environment in Arizona and affect APS’s customer and sales growth rates.”

Annual report 2025A · The company itself

“There appears to be an increasing level of activity, sophistication, and maturity of threat actors, including from both nation-state and non-nation state actors, that seek to exploit potential vulnerabilities in the electric utility industry and wish to disrupt the U.S. bulk power system, our information technology systems, generation (including our Palo Verde nuclear facility), transmission and distribution facilities, and other infrastructure facilities and systems and physical assets. We have been and could be the target of attacks, and the aforementioned systems are critical areas of cyber protection for us.”

Annual report 2025A · The company itself

“General economic factors that are beyond the Company’s control impact the Company’s forecasts and actual performance. These factors include interest rates; recession; inflation; stagflation; deflation; supply chain constraints; unemployment trends; sanctions, trade restrictions, military interventions and the threat or possibility of war; terrorism or other global or national unrest; and political or financial instability.”

Annual report 2025A · The company itself

“Changes in economic conditions, monetary policy, fiscal policy, financial regulation, rating agency treatment and/or other factors could result in higher interest rates, which would increase interest expense on our existing variable rate debt and new debt we expect to issue in the future, and thus increase the cost and/or reduce the amount of funds available to us for our current plans.”

Annual report 2025A · The company itself

“APS also plans to add up to 2,000 MW of flexible natural gas generation to its portfolio, designed to help meet the growing around-the-clock energy needs in Arizona.”

Annual report 2025A · The company itself

“APS is exposed to the impact of market fluctuations in the price and transportation costs of electricity, natural gas, and coal to the extent that unhedged positions exist. We have established procedures to manage risks associated with these market fluctuations by utilizing various commodity derivatives, including exchange traded futures and over-the-counter (“OTC”) forwards, options, and swaps.”

Annual report 2025A · The company itself

“Modification of the ACC’s retail electric competition rules or other efforts of deregulation and other factors, such as customers installing behind the meter technologies or large customers developing large, utility scale generation projects to serve their energy needs, may result increased competition, which could have a significant adverse impact on APS’s business and results of operations.”

Annual report 2025A · The company itself

“Alternative energy technologies that produce power or reduce power consumption or emissions are being developed and commercialized, including renewable technologies such as photovoltaic (solar) cells, customer-sited generation, energy storage (batteries) and efficiency technologies. Advances in technology and equipment/appliance efficiency could reduce the demand for supply from conventional generation, including carbon-free nuclear generation, and increase the complexity of managing APS’s information technology and power system operations, which could adversely affect APS’s business.”

Annual report 2025A · The company itself

“Additionally, as APS’s transmission infrastructure ages and its transmission system needs to grow to support growth in our territory and in the Southwest, it will need to replace and expand certain portions of its transmission infrastructure, which requires significant investment of capital. Risks related to the timely completion of, and costs associated with, these projects may be exacerbated by a constrained supply chain limiting the availability of necessary parts and materials as well as APS’s use, in some cases, of older, obsolete, or unsupported equipment.”

Annual report 2025A · The company itself

“Alternative energy technologies that produce power or reduce power consumption or emissions are being developed and commercialized, including renewable technologies such as photovoltaic (solar) cells, customer-sited generation, energy storage (batteries) and efficiency technologies. Advances in technology and equipment/appliance efficiency could reduce the demand for supply from conventional generation, including carbon-free nuclear generation, and increase the complexity of managing APS’s information technology and power system operations, which could adversely affect APS’s business.”

Annual report 2025A · The company itself

“The Palo Verde participants have contracted for 100% of Palo Verde’s requirements for uranium concentrates through 2028 and 70% through 2029; 100% of Palo Verde’s requirements for conversion services through 2030 and 32% through 2031; 100% of Palo Verde’s requirements for enrichment services through 2028; and 100% of Palo Verde’s requirements for fuel fabrication through 2027 for Unit 2 and Unit 1 and 2028 for Unit 3.”

Annual report 2025A · The company itself

“Additionally, as APS’s transmission infrastructure ages and its transmission system needs to grow to support growth in our territory and in the Southwest, it will need to replace and expand certain portions of its transmission infrastructure, which requires significant investment of capital. Risks related to the timely completion of, and costs associated with, these projects may be exacerbated by a constrained supply chain limiting the availability of necessary parts and materials as well as APS’s use, in some cases, of older, obsolete, or unsupported equipment.”

Annual report 2025A · The company itself

“APS is Arizona’s largest and longest-serving electric company and generates safe, affordable electricity in 11 of Arizona’s 15 counties.”

Annual report 2025A · The company itself