Arizona Public Service
Encyclopedia
Arizona Public Service Company is the largest electric utility in Arizona
and the principal subsidiary of publicly-traded S&P 500
member Pinnacle West Capital Corporation , which in turn had been formerly named AZP Group, when Arizona Public Service reorganized as that holding company in 1985.
With 4,000 MW of generating capacity, APS serves more than one million customers in 11 counties throughout most of the state, but mainly concentrated in northern and central Arizona. In particular, APS is one of the two suppliers of electricity to the Phoenix metropolitan area
(the other being Salt River Project
).
APS is regulated by the Arizona Corporation Commission
(ACC), the state agency that regulates all energy utilities in Arizona.
The holding company, Pinnacle West Capital, through its APS utility sells wholesale and retail power to the wider western United States and also provides energy-related services. Through another major subsidiary, Pinnacle West, it also develops and manages real estate in Arizona.
The utility company also operates three nuclear reactor
s. 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.
, and continued the annual dividend without interruption for the next 69 years.
The company became a subsidiary of the giant conglomerate American Power and Light in 1925, but became an independent company once again in 1945. In 1949, it merged with Northern Arizona Power and Light. In 1952, it merged with Arizona Edison and changed its name to Arizona Public Service.
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 (formerly ) with a 10.5% dividend, callable in 1990.
APS also performed well through the early 1980s recession
, reaching peak earnings of over US$255 million in 1983. However, by then the company had accumulated over US$2.1 billion in long-term debt.
In 1982, APS issued another preferred stock (formerly ) with an 11.9% dividend, callable in 1987. And in 1983, it issued a third preferred stock (formerly ) paying an adjustable rate between 6 and 12%, through 1986.
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.
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. By then Pinnacle's long-term debt had grown to almost US$2.4 billion. Earnings had declined to US$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.
By 1990, the company's earnings had fallen to under US$100 million, as it struggled through the 1990-1991 recession, as well as a series of failed attempts to diversify. By 1991, the company was facing a loss of almost US$190 million, and for the first time in over 70 years, it discontinued paying its dividend. The stock price plunged 85% from its 1987 peak, to its lowest level in over twenty years. It's long-term debt by then reached over US$2.5 billion.
However, by 1992, the company returned to profitability, as earnings recovered to over US$150 million. The stock price tripled from its 1991 low by the end of 1993. The company reinstated its dividend that year.
By 1995, Pinnacle West Capital had been added to the S&P MidCap 400 index. That year, earnings surpassed US$200 million again, and by early the next year the stock price began approaching its old 1987 high. Also in 1995, the utility subsidiary Arizona Public Services issued 30-year Monthly Income Debt Securities paying 10%.
affecting a region spreading west from Yuma, AZ to San Diego, CA and affecting parts of Northern Mexico. The outage was the result of 23 distinct events that occurred on 5 separate power grids in a span of 11 minutes including the APS North Gila Substation.
Federal, regional and local officials are investigating what happened and why the outage cascaded the way it did.
Most of the areas affected were served by San Diego Gas & Electric
Company. Approximately 7 million people were without power.
The outage occurred days before the tenth anniversary of the September 11 attacks, and hours before the United States Department of Homeland Security
warned of a potential terrorist attack leading up to the anniversary, but the Federal Bureau of Investigation
and San Diego Gas & Electric
early in their investigations ruled out terrorism.
Arizona
Arizona ; is a state located in the southwestern region of the United States. It is also part of the western United States and the mountain west. The capital and largest city is Phoenix...
and the principal subsidiary of publicly-traded S&P 500
S&P 500
The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock...
member Pinnacle West Capital Corporation , which in turn had been formerly named AZP Group, when Arizona Public Service reorganized as that holding company in 1985.
With 4,000 MW of generating capacity, APS serves more than one million customers in 11 counties throughout most of the state, but mainly concentrated in northern and central Arizona. In particular, APS is one of the two suppliers of electricity to the Phoenix metropolitan area
Phoenix Metropolitan Area
The Phoenix metropolitan area, often referred to as The Valley of the Sun, is a metropolitan area, centered on the city of Phoenix, that includes much of the central part of the US state of Arizona...
(the other being Salt River Project
Salt River Project
The Salt River Project is the umbrella name for two separate entities: the Salt River Project Agricultural Improvement and Power District, an agency of the state of Arizona that serves as an electrical utility for the Phoenix metropolitan area, and the Salt River Valley Water Users' Association, a...
).
APS is regulated by the Arizona Corporation Commission
Arizona Corporation Commission
The Arizona Corporation Commission is the Public Utilities Commission of the State of Arizona, established by Article 15 of the Arizona Constitution. There are currently five members of the commission . Arizona is one of only a handful of states with elected commissioners...
(ACC), the state agency that regulates all energy utilities in Arizona.
The holding company, Pinnacle West Capital, through its APS utility sells wholesale and retail power to the wider western United States and also provides energy-related services. Through another major subsidiary, Pinnacle West, it also develops and manages real estate in Arizona.
The utility company also operates three nuclear reactor
Nuclear reactor
A nuclear reactor is a device to initiate and control a sustained nuclear chain reaction. Most commonly they are used for generating electricity and for the propulsion of ships. Usually heat from nuclear fission is passed to a working fluid , which runs through turbines that power either ship's...
s. Its Palo Verde Nuclear Generating Station
Palo Verde Nuclear Generating Station
The Palo Verde Nuclear Generating Station is a nuclear power plant located in Wintersburg, Arizona, about 45 miles west of central Phoenix. It is the largest nuclear generation facility in the United States, averaging over 3.3 gigawatts of electrical power production in 2008 to serve...
in Arizona, the largest nuclear plant in the U.S., came under scrutiny by the Nuclear Regulatory Commission
Nuclear Regulatory Commission
The Nuclear Regulatory Commission is an independent agency of the United States government that was established by the Energy Reorganization Act of 1974 from the United States Atomic Energy Commission, and was first opened January 19, 1975...
in 2005 when operational problems began to cause prolonged outages.
History
In 1884, the Phoenix Light and Fuel Company was formed to provide electricity and heat to the people of the three-year-old town of Phoenix. It changed its name to Pacific Gas and Electric in 1906 and to Central Arizona Light and Power in 1920. Also in 1920, it paid a dividendDividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
, and continued the annual dividend without interruption for the next 69 years.
The company became a subsidiary of the giant conglomerate American Power and Light in 1925, but became an independent company once again in 1945. In 1949, it merged with Northern Arizona Power and Light. In 1952, it merged with Arizona Edison and changed its name to Arizona Public Service.
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
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
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
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
, and in 1976, the company issued a preferred stock (formerly ) with a 10.5% dividend, callable in 1990.
APS also performed well through the early 1980s recession
Early 1980s recession
The early 1980s recession describes the severe global economic recession affecting much of the developed world in the late 1970s and early 1980s. The United States and Japan exited recession relatively early, but high unemployment would continue to affect other OECD nations through at least 1985...
, reaching peak earnings of over US$255 million in 1983. However, by then the company had accumulated over US$2.1 billion in long-term debt.
In 1982, APS issued another preferred stock (formerly ) with an 11.9% dividend, callable in 1987. And in 1983, it issued a third preferred stock (formerly ) paying an adjustable rate between 6 and 12%, through 1986.
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.
Pinnacle West Capital
In February 1985, Arizona Public Service Company reorganized into a holding company structure, named AZP Group Inc. It traded under the ticker symbol AZP. 1985 earnings reached a new record high at almost US$290 million, and by the end of the year the stock price had doubled from its 1984 low.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. By then Pinnacle's long-term debt had grown to almost US$2.4 billion. Earnings had declined to US$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.
By 1990, the company's earnings had fallen to under US$100 million, as it struggled through the 1990-1991 recession, as well as a series of failed attempts to diversify. By 1991, the company was facing a loss of almost US$190 million, and for the first time in over 70 years, it discontinued paying its dividend. The stock price plunged 85% from its 1987 peak, to its lowest level in over twenty years. It's long-term debt by then reached over US$2.5 billion.
However, by 1992, the company returned to profitability, as earnings recovered to over US$150 million. The stock price tripled from its 1991 low by the end of 1993. The company reinstated its dividend that year.
By 1995, Pinnacle West Capital had been added to the S&P MidCap 400 index. That year, earnings surpassed US$200 million again, and by early the next year the stock price began approaching its old 1987 high. Also in 1995, the utility subsidiary Arizona Public Services issued 30-year Monthly Income Debt Securities paying 10%.
Major power outage
On September 8, 2011 there was a widespread power outagePower outage
A power outage is a short- or long-term loss of the electric power to an area.There are many causes of power failures in an electricity network...
affecting a region spreading west from Yuma, AZ to San Diego, CA and affecting parts of Northern Mexico. The outage was the result of 23 distinct events that occurred on 5 separate power grids in a span of 11 minutes including the APS North Gila Substation.
Federal, regional and local officials are investigating what happened and why the outage cascaded the way it did.
Most of the areas affected were served by San Diego Gas & Electric
San Diego Gas & Electric
San Diego Gas & Electric is the utility that provides natural gas and electricity to San Diego County and southern Orange County in southwestern California, United States...
Company. Approximately 7 million people were without power.
The outage occurred days before the tenth anniversary of the September 11 attacks, and hours before the United States Department of Homeland Security
United States Department of Homeland Security
The United States Department of Homeland Security is a cabinet department of the United States federal government, created in response to the September 11 attacks, and with the primary responsibilities of protecting the territory of the United States and protectorates from and responding to...
warned of a potential terrorist attack leading up to the anniversary, but the Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
and San Diego Gas & Electric
San Diego Gas & Electric
San Diego Gas & Electric is the utility that provides natural gas and electricity to San Diego County and southern Orange County in southwestern California, United States...
early in their investigations ruled out terrorism.
See also
- Path 46Path 46Path 46, also called West of Colorado River, Arizona-California West-of-the-River Path , is a set of many alternating current high-voltage transmission lines that are located in southeast California and Nevada up to the Colorado River...
, also called West of Colorado River, Arizona-California West-of-the-River Path (WOR) - Palo Verde Nuclear Generating StationPalo Verde Nuclear Generating StationThe Palo Verde Nuclear Generating Station is a nuclear power plant located in Wintersburg, Arizona, about 45 miles west of central Phoenix. It is the largest nuclear generation facility in the United States, averaging over 3.3 gigawatts of electrical power production in 2008 to serve...
- Four Corners Generating StationFour Corners Generating StationThe Four Corners Generating Station is a coal-fired power plant located near Fruitland, New Mexico, United States, on property located within the Navajo Indian Reservation that is leased from the Navajo Nation.-Description:...