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Pinnacle West Capital

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Pinnacle West Capital Corporation
Type Public (NYSEPNW)
Headquarters 400 North 5th St.
Phoenix, AZ 85004
Area served AZ
Key people Donald E. Brandt, CEO
Industry Electric Producer & Utility
Real Estate
Investment
Products Electricity
Revenue $4.4 million
Net income $3.3 billion
Employees 7,600 (2007)
Subsidiaries Arizona Public Service
APS Energy Services
SunCor Development
El Dorado Investment
Website PinnacleWest.com

Pinnacle West Capital Corporation (NYSE: PNW) is an Arizona-based energy company with consolidated assets of about $11 billion. [1]

Pinnacle West's largest affiliate, Arizona Public Service Company is the operator and co-owner of the Palo Verde Nuclear Generating Station, is the second fastest growing electric utility in the U.S. over the last five years, and serves more than a million customers in 11 of Arizona’s 15 counties. Other affiliates include SunCor Development Company, a developer of residential, commercial and industrial real estate; APS Energy Services, a retail energy service provider; and El Dorado Investment Company, a venture capital and investment firm. [1]

In 2010, Pinnacle West Capital had an operating revenue of $3.2 billion.[2] Its CEO, Donald E. Brandt, received $5.65 million in total compensation in 2010. [3]

Ties to the American Legislative Exchange Council

Pinnacle West is a member of the American Legislative Exchange Council (ALEC).

Pinnacle West's Vice President of Government Affairs, Martin Shultz, represents the corporation as Co-Chair of ALEC's Energy, Environment and Agriculture Task Force. [4][5] In other parts of the ALEC website, Shultz is listed as representing the law & lobbying firm Brownstein Hyatt Farber Schreck. [6]

About ALEC
ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.


Political Contributions and Lobbying

In 2010, Pinnacle West's PAC contributed $379,956 to federal House and Senate candidates or their PACs. Their overall contributions were evenly split between Republicans and Democrats. [7]

$71,000 was given to House Democrats and $40,500 to House Republicans. Senate Democrats received $12,500 and Senate Republicans $66,000.[8] Pinnacle West donated $59,000 to Republican candidate's PACs, and $17,500 to Democrat's PACs; a full list of PAC recipients can be viewed HERE.

In 2010, Pinnacle West spent $710,000 on lobbying. A full list of federal bills the company lobbied on can be accessed HERE.

Pinnacle West continues active lobbying within Arizona. Records of company lobbying expenditures in Arizona can be found HERE. The Arizona Secretary of State's Office [1] defines lobbying as "Attempting to influence the passage or defeat of any legislation by directly communicating with any legislator; or in the case of bonding lobbyists, directly communicating with any school district employee or a school district governing board member or attempting to influence any formal rule making proceeding pursuant to chapter 6 of this title or rule making proceedings that are exempt from chapter 6 of this title by directly communicating with any state officer or employee."

Nuclear Plants

The utility company also operates three nuclear reactors. Its Palo Verde Nuclear Generating Station in Arizona, the largest nuclear plant in the U.S., came under scrutiny by the Nuclear Regulatory Commission in 2005 when operational problems began to cause prolonged outages. "They have had a problem with human performance, and in properly identifying problems and finding resolution" over the past few years, said Nuclear Regulatory Commission spokesman Victor Dricks, referring to APS. While Dricks said the NRC may put Palo Verde on extra watch, the plant is not considered a danger to public safety.[9]

Annual Revenue

2010[10]
Sales/Operating Revenue: $3.3 billion
Net Income: $370 million
Assets: $12.4 billion
Employees: 6,740

2009[11]
Sales/Operating Revenue: $3.2 billion
Net Income: $72 million
Assets: $11.9 billion

2008[12]
Sales/Operating Revenue: $3.2 billion
Net Income: $259 million
Assets: $11.8 billion

Executive Compensation

2011[13]

  • Donald G. Robinson - President and Chief Operating Officer, APS: $4.4 million
  • Randall K. Edington - Executive Vice President and Chief Nuclear Officer, APS: $5.3 million
  • James R. Hatfield - Senior Vice President, Chief Financial Officer of the Company and APS: $1.5 million
  • David P. Falck - Executive Vice President, General Counsel and Secretary of the Company and APS: $2 million

Pinnacle West Capital Leadership

2011[14]

  • Donald E. Brandt - Chairman of the Board, President and CEO, Pinnacle West Capital Corporation; Chairman and CEO of Arizona Public Service Company
  • Donald G. Robinson - President and COO, Arizona Public Service Company
  • David A. Hansen - Vice President of Fossil Operations, Arizona Public Service Company
  • James R. Hatfield - Senior Vice President and CFO, Pinnacle West Capital Corporation and Arizona Public Service Company
  • Robert S. Aiken - Vice President, Federal Affairs, Pinnacle West Capital Corporation
  • Bob Bement - Senior Vice President of Operations, Palo Verde Nuclear Generating Station, Arizona Public Service Company
  • Kenneth C. Bohlen - Vice President and Chief Information Officer of Arizona Public Service Company
  • John Hatfield - Vice President of Communications of Arizona Public Service Company
  • Denise R. Danner - Vice President of Controller and Chief Accounting; Officer of Pinnacle West Capital Corporation and Arizona Public Service Company
  • John Hesser - Vice President of Engineering, Palo Verde Nuclear; Generating Station, Arizona Public Service Company
  • Pat Dinkel - Vice President of Power Marketing and Resource Planning, Arizona Public Service Company
  • Warren Kotzmann - Vice President of Strategic Initiatives & Risk, Arizona Public Service Company
  • Randy Edington - Executive Vice President & Chief Nuclear Officer of Arizona Public Service Company
  • Maria Lacal - Vice President of Operations Support, Palo Verde; Nuclear, Generating Station®, Arizona Public Service Company
  • David P. Falck - Executive Vice President of General Counsel & Secretary, Pinnacle West Capital Corporation and Arizona Public Service Company
  • Tammy McLeod - Vice President & Chief Customer Officer of Arizona Public Service Company
  • Edward Z. Fox - Vice President & Chief Sustainability Officer of Arizona Public Service Company
  • Dwight Mims - Senior Vice President of Regulatory and Oversight, Palo Verde Nuclear Generating Station®
  • Daniel Froetscher - Vice President of Energy Delivery, Arizona Public Service Company
  • Lee R. Nickloy - Vice President and Treasurer of Pinnacle West Capital Corporation and Arizona Public Service Company
  • Barbara M. Gomez - Vice President of Supply Chain Management, Arizona Public Service Company
  • Mark A. Schiavoni - Senior Vice President of Fossil Generation, Arizona Public Service Company
  • Jeff Guldner - Vice President Rates & Regulation of Arizona Public Service Company

History

Arizona Public Service Company began to pay a cash dividend to shareholders in 1920, and continued the annual dividend without interruption through the 1980s. The stock doubled in price through the long bear market of the 1970s, while paying a 10% dividend yield. By then it had become an electric and natural gas utility fueled 94.4% by coal plants, 5.2% by natural gas, and 0.4% by oil. The company traded its common stock on the New York Stock Exchange, and in 1976, the company issued a preferred stock with a 10.5% dividend, callable in 1990.[15]

APS also performed well through the early 1980s recession, reaching peak earnings of over $255 million in 1983. However, by then the company had accumulated over $2.1 billion in long-term debt. 1984 was a down year for both earnings and the stock price, which at its low that year had lost almost half its value from the 1983 peak.[15]

AZP Group

In February 1985, Arizona Public Service Company reorganized into a holding company structure, named AZP Group Inc.[16] It traded under the ticker symbol AZP. 1985 earnings reached a new record high at almost $290 million, and by the end of the year the stock price had doubled from its 1984 low.[15]

Pinnacle West Capital

In 1987, AZP Group changed its name to Pinnacle West Capital Corporation, and began trading under the new ticker symbol PNW. The utility continued to operate as its principal subsidiary.[16] By then Pinnacle's long-term debt had grown to almost $2.4 billion. Earnings had declined to $260 million in 1986, but were recovering by the end 1987. However, the stock price reached an all-time peak that year, which was not surpassed for the next decade, as the company ran into troubles through the early 1990s.[15]

Power portfolio

Out of its total 10,640 MW of electric generating capacity in 2005 (1.0% of the U.S. total), Pinnacle West produced 39.6% from nuclear, 35.2% from natural gas, 24.3% from coal, 1.0% from oil, and 0.1% from solar. Pinnacle West owns power plants in Arizona (86.4% of generating capacity) and New Mexico (13.6%).[17]

EPA releases list of 44 "high hazard" coal ash dumps

In response to demands from environmentalists as well as Senator Barbara Boxer (D-California), chair of the Senate Committee on the Environment and Public Works, the EPA made public a list of 44 "high hazard potential" coal waste dumps. The rating applies to sites at which a dam failure would most likely cause loss of human life, but does not include an assessment of the likelihood of such an event. Arizona Public Service Company owns 2 of the sites, both of which store coal combustion waste for the Cholla Generating Station.[18][19] To see the full list of sites, see Coal waste.

Existing coal-fired power plants

Pinnacle West owned or co-owned 9 coal-fired generating stations in 2005, with 2,580 MW of capacity. Here is a list of Pinnacle West's coal power plants:[17][20][21]

Plant Name State County Year(s) Built Capacity 2007 CO2 Emissions 2006 SO2 Emissions
Four Corners NM San Juan 1963, 1964, 1969, 1970 1452 MW 14,800,000 tons 15,192 tons
Cholla AZ Navajo 1962, 1978, 1980, 1981 1129 MW 8,026,000 tons 21,147 tons

In 2006, Pinnacle West's 2 coal-fired power plants emitted 22.8 million tons of CO2 and 36,000 tons of SO2 (X% of all U.S. SO2 emissions).

Articles and Resources

Resources

Related SourceWatch Articles

External Articles

References

  1. 1.0 1.1 "about us" page, Pinnacle West website, accessed July 10, 2011.
  2. Pinnacle West Capital Financials, Hoovers, accessed July 10, 2011.
  3. Donald E. Brandt profile, Forbes, accessed July 9, 2011.
  4. Martin L. Shultz profile, Pinnacle West website, accessed July 9, 2011.
  5. Natural Resources Task Force, ALEC website, accessed July 9, 2011 (listing Martin Shultz as representing Pinnacle West).
  6. Energy, Environment and Agriculture Task Force, ALEC website, accessed July 9, 2011 (listing Martin Shultz as representing Brownstein Hyatt Farber Schreck).
  7. Center for Responsive Politics, Pinnacle West Capital 2010 Contributions Summary, "Open Secrets.gov"
  8. Center for Responsive Politics, Pinnacle West Capital Contributions 2010, "Open Secrets.gov"
  9. Pinnacle West: The Peak of the Energy Pyramid, SeekingAlpha.com, By Ted Allrich, posted on: November 20, 2006
  10. Forbes Pinnacle West Financials
  11. Forbes Pinnacle West Financials
  12. Forbes Pinnacle West Financials
  13. Executive Compensation, "Businessweek"
  14. Management Profiles, "Pinnacle West Capital"
  15. 15.0 15.1 15.2 15.3 Standard & Poor's Stock Guide, various issues
  16. 16.0 16.1 Compilation of Investor-Owned Utility Transactions - Holding Companies Established, American Public Power Association, (updated 09-03)
  17. 17.0 17.1 Existing Electric Generating Units in the United States, 2005, Energy Information Administration, accessed April 2008.
  18. Shaila Dewan, "E.P.A. Lists ‘High Hazard’ Coal Ash Dumps," New York Times, June 30, 2009.
  19. Fact Sheet: Coal Combustion Residues (CCR) - Surface Impoundments with High Hazard Potential Ratings, Environmental Protection Agency, June 2009.
  20. Environmental Integrity Project, Dirty Kilowatts: America’s Most Polluting Power Plants, July 2007.
  21. Dig Deeper, Carbon Monitoring for Action database, accessed June 2008.