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Arizona’s Energy Future

Arizona’s Energy Future. Renewables + Energy Efficiency + Smart Technologies = More Control for Customers August xx, 2011. In 2009, a Long-Term Energy Vision Was Shared by 23 Arizona Groups. Environmental groups Business associations Community groups Arizona Corporation Commission

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Arizona’s Energy Future

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  1. Arizona’s Energy Future Renewables + Energy Efficiency + Smart Technologies = More Control for Customers August xx, 2011

  2. In 2009, a Long-Term Energy Vision Was Shared by 23 Arizona Groups • Environmental groups • Business associations • Community groups • Arizona Corporation Commission • Residential Utility Consumer Office • Arizona Public Service

  3. That Shared Vision Is Important to Arizona • Aggressive goals for renewable energy • Ambitious energy efficiency targets • Maintain reliability and upgrade power grid • Implement smart technologies to give customers greater choice and control APS Goals 2010 2020 2010 2025 Renewable Energy Energy Efficiency

  4. APS Is Meeting Arizona’s Goals Meeting those goals requires continued investment: We’re spending about $1 billion dollars each year to create a • Cleaner • More reliable • More efficient energy future for Arizona. APS Capital Expenditures ($ Millions) $1,340 $952 $962

  5. Energy Efficiency Saves Customers Money and Reduces Spending on New Power Plants • The cheapest kilowatt-hour is the one never used • Energy efficiency is a viable resource, just like natural gas or coal • APS will invest nearly $800 million over 5 years to help customers reduce energy usage • Every megawatt saved = 250 homes off the grid

  6. APS and Its Customers Are Rapidly Adding Renewables, Especially Solar • Renewable portfolio grew from 1 MW in 2001 to 304 MW today • APS is spending up to $500 million for 100 MW of Arizona solar panels • Arizona’s Solana solar plant of 250 MW will be one of world’s largest in 2013 • Nearly 16,000 customers used APS incentives to install solar on their homes and businesses since 2006

  7. Smart Technologies: control and options for customers; efficiency, responsiveness for utility • Nearly 610,000 smart meters installed – greater flexibility in rate, demand response development • Self-healing grid pilot project in Flagstaff shows potential • Home Energy Information Pilot initiates smart thermostat / in-home display / appliance control elements • Infrastructure improvements over last two years – 6 substations and 493 miles of distribution lines Flagstaff Smart Grid pilot reduced customer outage minutes by 66%.

  8. Modernized Rates Will Encourage Energy Efficiency Investment • Today’s outmoded rate structure dates from the early 1900s • APS is modernizing rates to align its energy efficiency interests with those of customers • Energy efficiency gains will reduce the need for new power plants • Customers will also see greater predictability with modernized rates APS Fossil Energy Growth by 2025 (Megawatts)

  9. Like the 2009 Settlement, the 2012 Rate Case Seeks Benefits for Customers, APS and Arizona • For customers . . . • Continuing support for energy efficiency and renewables • Greater choice and control • More predictable and consistent rates • Fewer rate cases • For APS . . . • Modernized rates to support energy efficiency, renewables and grid upgrades • Ability to achieve Arizona’s energy goals • For Arizona . . . • A growing renewables industry and jobs • Progress toward a sustainable energy future

  10. We’ve Tightened Our Belt And Productivity Remains High APS is working to limit current and future rate increases by diligently managing costs. • Achieved $37 million in cost savings in 2010 • Reduced staff by 380 positions Employee Productivity Improvement(APS Customers Served per Employee)

  11. Lower Fuel Costs Significantly Reduce the Proposed Rate Increase

  12. Even with 2012 Proposed Increase, APS Rates Beat Inflation

  13. Typical Customer Could Easily Offset Increase with APS Program • Typical Customer – 1,100 kWh per month • Rate request potential increase of about $8.36 • Customer programs and incentives can help reduce electricity usage • 10 CFLs can offset up to 33% of rate increase • Participation in the refrigerator recycling program can save enough to cover rate increase • APS offers 9 programs to reduce electricity usage without change in lifestyle

  14. APS Makes Major Contributions to Arizona’s Economy, Communities and Jobs 2010 Economy and Jobs Impact • Contributed $3.4 billion to the economy • Purchased almost $1 billion Arizona goods & services • Paid $408 million Arizona taxes • Supported 5,600 Arizona jobs and $436 million of total income Community Impact • 6,700 Employees • $4 million to United Way • 165,000 volunteer hours • Limited-income assistance

  15. We’re Asking the ACC to Continue Supporting Arizona’s Ambitious Goals • Energy efficiency and renewable goals among the most ambitious in the nation • This work will increase customer bills by about 6.6%, on average • Continues shared, longer-term vision established via 2009 rate settlement • We’re confident this plan is right for customers and for Arizona APS Energy Growth Sources 2011 - 2025 33% Utility-ScaleRenewable Energy 83%Clean Energy Distributed Energy 10% 40% Energy Efficiency Natural Gas 17%

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