2. Special Open Meeting of the Arizona Corporation Commission Energy Workshop February 16, 2001 Arizona Public Service Company Cary B. Deise Director, Transmission Operations and Planning

3. 2 Overview  Reliability  Service Territory  Load Forecast  Resources  Fuel Supply Plan  Transmission  Conclusion

4. 3 Reliability  To meet customers electric energy requirements on time.  Factors impacting reliability  Customer Requirements  Transmission, Generation and Distribution availability  Weather  Neighboring systems

5. 4 APS Service Territory

6. 5 APS Valley Service Territory

7. 6 Peak Load Forecast 5.7% 5793 2001 Residential - 2772 Commercial Industrial - 2660 Other - 361 2002 Residential - 2929 Commercial Industrial - 2721 Other - 373 6023 4.0% Residential - 2553 5479 2000 Actual Commercial Industrial - 2596 Other - 330 Values in MW

8. 7 Existing Generation 3982 APS Existing Generation (Nominal ratings in MW) Cholla 615 Four Corners 782 Navajo 315 WPhoenix 365 Ocotillo 366 Saguaro 319 Douglas 16 Palo Verde 1105 Yuma 147

9. 8 Resources 2001 2002  Existing Generation 3982 4497 Renewable 9 13  Additions Upgrade of existing CC&CT 107 - Reactivate WPhx Steam 4&6 96 - WPhx CC 4 114 - Temporary WPhx CT’s - 5 units 99 (99) Temporary Saguaro CT’s - 5 units 99 (99) Redhawk CC 1&2 _-__ 988 Subtotal 515 790  Long-term Contracts Pacificorp Exchange 480 480 SRP_______________ 336 343 Subtotal 816 823  Short-term Contracts 1176 638  Total Resources 6498 6761

10. 9 APS Load and Resources 6023 6761 738 Margin Peak LoadResources 2002 6498 5793 705 Margin ResourcesPeak Load 2001

11. 10 APS fuel supply plan is characterized by Diverse fuel types Firm contracts Futures and options contracts Spot market transactions Duel fuel burning capacity at existing gas fired plants Fuel Supply Plan

12. 11 Fuel Supply Continued Projected annual fuel consumption

13. 12 Length of Supply and delivery contracts Fuel Supply Continued Coal: 2004 - 2011 Depending on plant Natural Gas: Firm supply contracts - 2004 with 100% coverage through 2002; transport 2013 Nuclear: 100% coverage through 2003; evaluating proposals for 2004 to 2008

14. 13 APS EHV System Transmission Capacity less wheeling obligations N. Gila 140 Navajo 315 Westwing Moenkopi Yavapai 559 Palo Verde 1105 Kyrene 1643 Pinnacle Peak Saguaro 319 1683 Mead 236 1175 Four Corners 782 Cholla 615 500kV 345kV

15. 14 APS EHV System 20012002 Total Transmission to Load 4261 4261 Purchased Transmission 400 675 Total 4661 4936 Remote Generation (2817) (3805) Purchase (Pac + Short-Term) (1656) (1118) Margin 188 13

16. 15 Overhead Underground APS Valley 230kV Transmission Pinnacle Peak Reach Kyrene Ocotillo Westwing Country Club Agua Fria Alexander West Phoenix White Tanks

17. 16 APS Valley Load Serving Capability Existing 2001 2002 Transmission 2870 4227 Generation (WPhx & Ocotillo) 701__-___ Subtotal 3571 - Transmission Additions 270 Generation Additions 386 (99) Load Serving Capacity 4227 4128 Valley Load (3800)(3950) Margin 427 178

18. 17 Conclusions Transmission additions are critical. APS fuel sources are secure and diverse. Future new generation is critical.

19. 18 Conclusions (cont.) APS has and will acquire the resources necessary to achieve reliable system operations in 2001 and 2002 Although the APS plans meet the forecast reliability requirements, unforeseen events such as violent storms, extreme hot spells,equipment failures and construction delays can threaten the security and adequacy of the electric power system.

20. 19 The End