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- **Strong Operational Performance**: Q3 2025 EPS of $3.39, up $0.02 YoY, driven by 5.4% weather-normalized sales growth and record transmission revenue.
- **Major Projects**: 2,000 MW Desert Sun Power Plant (Phase 1: 2030 in-service) and $6 billion transmission expansion to support 7%-9% rate base growth.
- **Guidance Updates**: 2025 EPS revised to $4.90-$5.10, 2026 EPS of $4.55-$4.75, with customer growth of 1.5%-2.5%.
- **Subscription Model Success**: 1.2 GW subscription discussions underway, aligning generation delivery with customer demand.
- **Regulatory Focus**: Rate case resolution critical for reducing regulatory lag and improving recovery timing.

**【Management Opening Remarks】**
- Amanda Ho welcomed participants and outlined the call's structure, emphasizing operational and financial performance highlights. She noted the availability of slides on the Investor Relations website and reminded participants of the forward-looking statements' risks and uncertainties. The third-quarter 2025 Form 10-Q was filed, and a replay of the call would be available for 30 days.

**【CEO Summary Section】**
- **Operational Excellence**: The company delivered strong performance during a dynamic summer, including record peak days and reliable service despite extreme weather. The Palo Verde Generating Station operated at 100% capacity factor.
- **Economic Growth Drivers**: Arizona's population growth and major employer expansions (e.g., TSMC, Amkor) are driving demand. SEMICON West's first Phoenix hosting highlighted the region's economic momentum.
- **Major Projects**: 
  - **Desert Sun Power Plant**: A 2,000 MW natural gas project in two phases, with Phase 1 targeting 2030 in-service and Phase 2 leveraging a subscription model for new customers.
  - **Transmission Expansion**: $6 billion in FERC-regulated transmission investments to enhance reliability and access to out-of-state generation.
- **Subscription Model**: A commercial construct to align generation capacity delivery with customer ramp rates, protecting affordability while supporting growth.

**【CFO Financial Commentary】**
- **Q3 2025 Results**: EPS of $3.39, up $0.02 YoY, driven by higher transmission revenues and sales growth across all customer classes. Weather-normalized sales growth was 5.4%.
- **Guidance Updates**: 
  - **2025 EPS**: Revised to $4.90-$5.10 (from $4.40-$4.60), reflecting strong sales and transmission performance.
  - **2026 Outlook**: EPS of $4.55-$4.75, with lower weather assumptions and higher financing costs. Customer growth expected at 1.5%-2.5%, and sales growth of 4%-6%.
- **Capital Strategy**: 
  - **Transmission Investment**: $2.6 billion through 2028, supporting rate base growth of 7%-9%.
  - **Equity Needs**: $1 billion-$1.2 billion through 2028, with 85% of 2026 needs priced. Focus on minimizing dilution through rate case outcomes and subscription model cash contributions.
- **O&M Efficiency**: Expecting a slight YoY decrease in 2026, with long-term focus on reducing O&M per MWh.

**【Q&A Key Highlights】**
- **Desert Sun Timeline**: Phase 1 in-service by late 2030, Phase 2 aligned with customer ramp rates. Discussions with 1.2 GW subscription customers ongoing.
- **Transmission Contribution**: 2026 transmission revenue up $0.55 YoY, driven by FERC formula rate and wheeling opportunities.
- **Regulatory Lag Mitigation**: Focus on rate case resolution and subscription model cash inflows to reduce equity needs.
- **Customer Growth**: 35,000 new meter sets in 2025, with 2026 forecast of 1.5%-2.5% growth, supported by advanced manufacturing and data center expansion.
- **Affordability**: Phoenix's low inflation (1.4%) and cost of living advantages attract businesses and residents, supporting long-term growth.


Pinnacle West Capital Corporation (PNW) Q3 2025 Earnings Call Transcript

- **Record Growth**: Q2 peak demand up 300 MW YoY to 8,500 MW, driven by extreme heat and population growth. 
- **Strategic Investments**: 
  - 675 MW new gas generation and 1.5 Bcf/day pipeline to support 2030+ growth. 
  - $800M bond issuance to fund $4.4B-$4.6B 2025 EPS guidance. 
- **Regulatory Focus**: Rate case seeks $580M revenue increase, with formula rate mechanism to reduce lag. 
- **Customer Expansion**: 20 GW uncommitted queue positions for future generation projects. 
- **Financial Resilience**: Despite $0.18 YoY EPS decline, reaffirmed full year guidance amid strong sales growth (+5.2% weather-normalized).

**【CEO Summary Section】**
- **Operational Highlights**: Set a new peak energy demand record of 8,500 MW in Q2 2025, up 300 MW from 2024, driven by extreme summer temperatures and population growth. 
- **Economic Growth Alignment**: Arizona's record job creation (24,000 in FY2025) and $31B in business investment align with company's infrastructure expansion. 
- **Energy Portfolio Expansion**: 
  - Secured 94 MW of low-cost baseload nuclear capacity through a buyout option. 
  - Developing 675 MW of new natural gas generation. 
  - Announced 1.5 Bcf/day pipeline expansion to support 2030+ gas generation needs. 
- **Regulatory Update**: Filed rate case seeking $580M annual revenue increase, with new rates expected in late 2026. Proposed formula rate mechanism to reduce regulatory lag.

**【CFO Financial Commentary】**
- **Q2 2025 Results**: EPS of $1.58 (-11% YoY) due to: 
  - $0.08 benefit from 5.2% weather-normalized sales growth (C&I +8%). 
  - $0.18 drag from higher O&M costs, weather underperformance vs. 2024, and pension expenses. 
- **Customer Growth**: 2.4% net meter additions, with 2025H1 new meters at record pace. 
- **Capital Allocation**: Issued $800M bonds to refinance maturing debt. Reaffirmed full year EPS guidance of $4.40-$4.60.

**【Q&A Key Highlights】**
- **Pipeline Impact**: 1.5 Bcf/day pipeline (anchor shipper) unlocks 2+ GW of new gas generation by 2030, supporting 20 GW of uncommitted customer demand. 
- **Transmission Growth**: Transmission capex to double from $350M to $700M+ annually, driven by: 
  - Core system upgrades for reliability. 
  - Strategic projects to connect new generation. 
- **Regulatory Lag**: Current rate case (2024 test year) creates ~$100M/year lag. Formula rate mechanism proposed for 2027 implementation. 
- **Customer Pipeline**: 4.5 GW of committed high-load-factor customers (data centers, TSMC), plus 20 GW of uncommitted queue.

Pinnacle West Capital Corporation (PNW) Q2 2025 Earnings Call Transcript

- **Semiconductor Boom Drives Growth**: TSMC's $165B Arizona expansion (6 fabs, 40,000+ jobs) and NVIDIA's chip manufacturing partnership highlight Arizona's tech leadership
- **Customer Growth Accelerates**: 2.3% QoQ customer growth (near 4-6% annual target), C&I sales +5.3% driven by data centers and manufacturing
- **Operational Resilience**: Completed major outages, AI wildfire detection, and Palo Verde refueling on track for summer reliability
- **Financial Health**: Q1 loss due to one-time 2024 benefit, but new rates (+$0.29/share) and transmission growth offset O&M drag
- **Regulatory Progress**: Formula rate proposal to reduce regulatory lag to ~1-2% vs. 9.55% ROE, mid-2025 rate case filing
- **Pipeline Expansion**: $3-3.5B QIP includes strategic transmission and generation projects (e.g., Red Hawk 2028 in-service)

**【CEO Summary Section】**
- Arizona's economy is thriving, driven by semiconductor investments (TSMC's $165B expansion, including 6 fabs and advanced packaging facilities) and healthcare growth (Mayo Clinic's $2B hospital expansion). 
- Operational highlights: 
  - Completed major outages at Four Corners and Red Hawk units
  - Palo Verde Unit 1 refueling outage on track for early May return
  - Deployed AI-powered fire-sensing cameras for wildfire mitigation
- Long-term resource procurement: Seeking 2,000+ MW of new resources (2028-2030) via All-Source RFP
- Customer experience: APS ranked #10 nationally in digital utility experience, recognized as Most Trustworthy Company
- Regulatory focus: Mid-2025 rate case to update 2021 Test Year costs, with formula rate proposal to reduce regulatory lag

**【CFO Financial Commentary】**
- Q1 2025 Results: 
  - Net loss of $0.04/share vs. $0.15/share in Q1 2024 (due to 2024 Bright Canyon sale benefit)
  - O&M up 12% YoY (Four Corners outage, IT projects)
  - Partial offsets: New rates (+$0.29/share), El Dorado equity gain, transmission sales growth
- Key trends: 
  - Customer growth 2.3% QoQ (near high end of 4-6% annual guidance)
  - Weather-normalized sales +2.1% (C&I +5.3%)
  - Adjusted unbilled revenues reduced reported sales growth by 1.9%
- Financial health: 
  - Strong balance sheet with stable credit ratings
  - 2025 O&M guidance unchanged, offsetting Q1 drag
  - Reaffirmed 2025-2027 sales growth (4-6%), capital spending ($3.5-4.5B), and ROE (9.55%)

**【Q&A Key Highlights】**
- **TSMC Expansion Impact**: 
  - Fab 2 start-up accelerated, Fab 3 construction begins
  - Supports 40,000+ jobs over 4 years
  - Beyond 2027-2028 guidance, highlights long-term growth pipeline
- **Qualified Investment Pipeline (QIP)**: 
  - $3-3.5B pipeline includes strategic transmission, generation projects
  - Example: Red Hawk gas plant (2028 in-service)
- **Regulatory Lag**: 
  - Formula rate proposal aims to limit lag to ~1-2% vs. current 9.55% ROE
  - 2024 Test Year case expected late 2026
- **Customer Load Factors**: 
  - Committed to 4 GW high-load customers, 10+ GW in planning
  - 2028-2030 RFP seeks 2,000+ MW, potential upsize based on quality
- **Transmission Strategy**: 
  - Focused on 230kV/500kV projects for near-term needs
  - Evaluating 645kV for future expansion
- **Rate Case Timing**: 
  - Mid-2025 filing, formula rate adjustments starting 2027
- **O&M Trends**: 
  - Q1 lumpiness (Four Corners outage, IT project) expected to normalize
  - On track to meet 2025 O&M guidance
- **Solar Trends**: 
  - Rooftop solar applications down due to market saturation
  - Organic sales growth offsetting efficiency gains

Pinnacle West Capital (PNW)-1 May 25-2025 Q1 Earnings call transcript

- **Record Customer Growth**: 5.7% sales growth (9.7% C&I), 49% YoY new meters in Metro Phoenix
- **Formula Rate Opportunity**: 2025 rate case to implement formula rates for faster cost recovery
- **Strong Financial Health**: Full-year EPS $5.24 vs. $4.60-$4.80 guidance; reaffirm 5-7% long-term EPS growth
- **Future Expansion**: $2.3B 2025 CapEx; 7,300 MW new resources to meet 2026-2028 demand
- **Leadership Transition**: Seamless CEO succession as Jeff Guldner retires March 31, 2025

**【CEO Summary Section】**
- **2024 Regulatory Success**: Secured constructive rate case outcome and progress on reducing regulatory lag via formula rates. Achieved 16th consecutive year of Palo Verde nuclear plant exceeding 30 million MWh net generation.
- **Operational Excellence**: 0 serious injuries/fatalities in 2024 despite record-breaking 113-day heatwave. Set new peak demand record at 8,210 MW.
- **Leadership Transition**: CEO Jeff Guldner announced retirement effective March 31, 2025, with seamless succession plan in place.

**【Ted Geisler - Future Strategy】**
- **Customer Growth**: 2.1% full-year customer growth (1.1% residential, 9.7% C&I). Metro Phoenix meters up 49% YoY. New TSMC fabs expected to create 62,000 jobs by 2030.
- **Capital Expansion**: Procured 7,300 MW of new generation/transmission to meet 2026-2028 demand. 40%+ of future CapEx eligible for timely recovery via SRB or FERC formula rates.
- **Decarbonization**: 54% carbon-free energy mix in 2024 while maintaining top-quartile reliability.

**【CFO Financial Summary】**
- **2024 Financials**: Full-year EPS $5.24 (vs. $4.60-$4.80 guidance). Q4 loss of $0.06 due to O&M/D&A cost increases offset by 5.7% sales growth.
- **2025 Outlook**: Reaffirm 4-6% sales growth (3-5% C&I). Maintain 5-7% long-term EPS growth target. 2025 CapEx ~$2.3B.
- **Cost Management**: O&M per MWh declining. Equity issuance to maintain 50% debt/50% equity target.

**【Key Q&A Themes】**
- **Formula Rates**: 2025 rate case will include formula rate design. Potential for smoother earnings path if adopted.
- **CapEx Beyond 2027**: Strategic transmission projects extend into 2030s. Evaluating generation investments for 2040s+.
- **Wildfire Mitigation**: Support HB 2201 to establish wildfire prevention standards and limit liability exposure.
- **New Nuclear**: Exploring SMR potential for 2040s, but currently in assessment phase with state partners.


Pinnacle West Capital Corporation (PNW) Q4 2024 Earnings Call Transcript

Pinnacle West Capital (PNW)-6 Nov 24-2024 Q3 Earnings call transcript

Pinnacle West Capital (PNW)-1 Aug 24-2024 Q2 Earnings call transcript

Pinnacle West Capital (PNW)-2 May 24-2024 Q1 Earnings call transcript

Pinnacle West Capital (PNW)-27 Feb 24-2023 Q4 Earnings call transcript

- **Extreme Weather Resilience**: Q3 peak demand up 500 MW YoY, with 93.4% generation fleet availability. Virtual power plant nears 200 MW capacity.
- **Financial Outperformance**: $3.50 EPS (+$0.62 YoY), driven by 28% cooling degree day increase. 2023 CapEx raised to $1.8B for transmission and reliability.
- **Growth Drivers**: 2.8% C&I sales growth YTD, 4.5%-6.5% long-term target from TSMC and data centers. Residential decline offset by efficiency trends.
- **Risk Management**: Advocating for SSA mechanism to reduce regulatory lag. 2024 pension and interest expense impacts TBD.

**【CEO Operations Update】**
- **Extreme Summer Performance**: Recorded 55 days of 110+°F, with APS setting 5 new peak demand records (8,162 MW on July 15). Generation fleet availability was 93.4%, including 99% capacity factor for Palo Verde Unit 1.
- **Customer Engagement**: 58,000+ customers participated in Cool Rewards, conserving 135 MW during peak hours. Virtual power plant nearing 200 MW capacity.
- **Regulatory Progress**: Filed 15-year Integrated Resource Plan (IRP) for 65% carbon-free by 2030. Rate case hearings concluded; awaiting Administrative Law Judge recommendation.
- **Community Impact**: Recognized for corporate philanthropy in heat relief programs, including partnerships with Salvation Army and Lyft.

**【CFO Financial Review】**
- **Q3 Earnings**: $3.50 EPS, +$0.62 YoY, driven by 28% increase in cooling degree days. Weather benefit of $0.38 vs. Q3 2022.
- **Sales Growth**: 2% customer growth, 2.8% C&I sales growth YTD. Adjusted 2023 sales guidance to 1%-3% (from 2%-4%) due to residential efficiency trends.
- **Cost Management**: O&M expenses slightly lower YoY, but raised 2023 guidance to $915-935M. Interest expense up due to Fed rate hikes.
- **Capital Spending**: Raised 2023 CapEx to $1.8B (+$130M), driven by transmission ($55M increase) and generation maintenance.
- **Dividend Growth**: 1.7% dividend increase, targeting 65%-75% payout ratio over long term.

**【Q&A Highlights】**
- **TransCanyon Transmission**: DOE derisking positive, but project 3-5 years out. Focus on regulated transmission spend (+50% YoY in 2023).
- **Pension Performance**: Fixed-income portfolio (80% of assets) under pressure, but higher rates reduce O&M pension costs. 2024 impact TBD.
- **Sales Growth Drivers**: TSMC (2025 startup) and data centers driving 4.5%-6.5% long-term C&I growth. Residential decline offset by virtual power plant efficiency.
- **Regulatory Lag Mitigation**: Advocating for Self-Service Adjustment (SSA) mechanism to reduce rate case frequency. Tucson Electric precedent cautionary.
- **O&M Flexibility**: 2023 O&M flat YoY, but 2024+ outlook depends on rate case outcome and fleet maintenance needs.


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