Pinnacle West Capital Corporation

Good afternoon, ladies and gentlemen, and welcome to the Pinnacle West Capital Corporation 2022 First Quarter Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Amanda Ho. Ma'am, the floor is yours.

Thank you, Matt. I would like to thank everyone for participating in this conference call and webcast to review our first quarter 2022 earnings, recent developments, and operating performances. Our speakers today will be our Chairman and CEO, Jeff Goldner, and our CFO, Ted Geisler. Barbara Lockwood, Senior Vice President, Public Policy, and Jacob Tetlow, Executive Vice President, Operations, are also here with us. First, I need to cover a few details with you. The slides that we will be using are available on our Investor Relations website, along with our earnings release and related information. Today's comments and our slides contain forward-looking statements based on current expectations that actual results may differ materially from expectations. Our annual 2022 Form 10Q was filed this morning. Please refer to that document for forward-looking statements, cautionary language, as well as the risk factors and MDNA sections, which identify risks and uncertainties that could cause actual results to differ materially from those contained in our disclosures. A replay of this call will be available shortly on our website for the next 30 days. It will also be available by telephone through May 11, 2022. I will now turn the call over to Jeff.

Great. Thank you, Amanda. Thank you all for joining us today. 2022 started off in line with the financial guidance that we provided coming out of the rate case decision last year. And before Ted discusses the details of our first quarter results, let me provide a few updates on recent operational and regulatory developments, and then I'll touch on our progress towards achieving our 2022 goals. First off, as you know, safety is our number one priority, and I do want to take this opportunity to commend and congratulate our employees for keeping safety in sharp focus in the first quarter. Significant injuries or fatalities, or SIFs, are the most important safety metric, and we completed the quarter with no serious injuries. SIF is a metric that's focused on preventing serious injuries by improving hazard recognition, risk-based decision-making, procedures, equipment selection, employee training and much more because we don't leave anything to chance when it comes to the safety of our people on the job and I'm grateful to our employees for taking accountability to operate by one of our principles within the APS promise that's anchoring and safety and to help their co-workers to do the same. As you all know spring is an important time of year for our summer preparedness work. We have always had a robust summer preparedness program But resource adequacy has become increasingly important as energy supplies in the Southwest tighten. To serve our customers with top-tier reliability, each year we perform preventative maintenance, emergency operations center drills, acquire critical spare equipment, conduct fire mitigation line patrols, and execute a comprehensive plan to support public safety and first responders. In fact, we've already started seeing the benefits of our preparation as we've had an early start to the Arizona wildfire season. Our system has fared well, and our defensible space around poles, what we call our DSAP program, is demonstrating great success while we continue to coordinate effectively with local first responder agencies to ensure that affected customers and communities have the support that they need. Also, during the first quarter, our Palverde nuclear facility operated at a 95% capacity factor. We've got Unit 1 currently in a planned refueling outage that began on April 8th, and it's on schedule to return to service within the next few days. We expect our two refueling outages in 2022 to last approximately 30 days each. That's a timeframe that reflects sound planning and execution. And upon the successful completion of the latest refueling outages, all three units will be poised to provide around the clock energy to help meet the demands of the summer for the entire desert Southwest. Our procurement process is another important way that we help to ensure long-term resource adequacy and progress towards our clean energy commitment We're on track to bring into service 141 megawatts of battery storage, located on six APS-owned solar sites this year. Last year, we received robust RFP responses to meet the growing needs of our customers. The RFPs resulted in an additional 60 megawatts of APS-owned batteries to be placed at APS solar sites and 150 megawatts of new APS-owned solar, all expected to be online in 2023. as well as additional clean energy resources through PPAs. We're currently in the final stages of contracting for another APS-owned solar plus storage project that we look forward to announcing in the near future. And lastly, APS is working on another all-source RFP that's expected to be released in mid-May for new resources to be in service by 2024 and 2025. On the regulatory front, We've been preparing for the upcoming rate case filing and continue to expect the filing mid-year. The primary objectives of this next rate case will be to recover costs and investments that we've made to reliably serve our existing customers and to support the tremendous growth that we're seeing in our service territory. In addition, we continue to work with the Arizona Corporation Commission and many stakeholders in an effort to gain a common understanding on a variety of issues and to move forward with balanced solutions. One example of the stakeholder work has been our most recent customer education and outreach plan, which was recently approved by the Corporation Commission after months of collaboration. I think this was a great example of the progress that we're making to align with stakeholders and the Commission on issues that have been challenging in years past. We truly appreciate the individuals and organizations that have been involved in these discussions, and I want to personally thank them for their time and thoughtful participation. We look forward to continuing the dialogue and making further progress with respect to our state's regulatory environment. I've also already touched on the progress of some of our 2022 priorities, including enhancing our stakeholder relationships and continuing to execute on our clean energy commitment. In addition, I'd like to highlight improvements we're making in the customer experience and communication space. I'm proud to say that we're making solid progress in improving our J.D. Power residential customer satisfaction survey scores. APS made quartile gains in every single driver of customer satisfaction during Q1, moving the company to the top half of the third quartile for overall satisfaction when compared to its large investor-owned peers. APS's strongest performing drivers in the latest JDP survey were power quality and reliability in customer care, phone and digital, both of which performed well above the large investor-owned peer set averages. Enhancements to our website, interactive outage map, and alerts by text and email have improved customer satisfaction with our digital experience and grown engagement with transactions completed through these tools. Although we're making solid progress, we know we still have much work to do, and we look forward to continuing to execute on our priorities throughout the year. With that, Ted, I'll turn the call over to you.