8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported):    June 1, 2016

Commission File Number	Exact Name of Registrant as Specified in Charter; State of Incorporation; Address and Telephone Number	IRS Employer Identification Number
1-8962	Pinnacle West Capital Corporation (an Arizona corporation) 400 North Fifth Street, P.O. Box 53999 Phoenix, AZ 85072-3999 (602) 250-1000	86-0512431
1-4473	Arizona Public Service Company (an Arizona corporation) 400 North Fifth Street, P.O. Box 53999 Phoenix, AZ 85072-3999 (602) 250-1000	86-0011170

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

This combined Form 8-K is separately filed or furnished by Pinnacle West Capital Corporation and Arizona Public Service Company. Each registrant is filing or furnishing on its own behalf all of the information contained in this Form 8-K that relates to such registrant and, where required, its subsidiaries. Except as stated in the preceding sentence, neither registrant is filing or furnishing any information that does not relate to such registrant, and therefore makes no representation as to any such information.

Item 7.01 Regulation FD Disclosure.

Investor and Analyst Meetings and Rate Case Materials

Pinnacle West Capital Corporation (“Pinnacle West”) will be participating in various investor and analyst meetings from June 2, 2016 through June 14, 2016 and will be utilizing slides during those meetings.  Copies of the slides are attached hereto as Exhibit 99.1.

As described under Item 8.01 below, Arizona Public Service Company (“APS” or the “Company”) will be filing an application and related schedules for an annual increase in retail base rates with the Arizona Corporation Commission (the “ACC”) on June 1, 2016.  These materials will be posted on an APS website at www.azenergyfuture.com.  The information on this website is not incorporated by reference into this report. The ACC docket number is E-01345A-16-0036. On June 1, 2016, APS also issued a press release announcing its filing with the ACC described above.  A copy of the press release is attached hereto as Exhibit 99.2.

Item 8.01 Other Events.

Retail Rate Case Filing with the Arizona Corporation Commission

On June 1, 2016, APS will file an application with the ACC for an annual increase in retail base rates of $165.9 million. This amount excludes amounts that are currently collected on customer bills through adjustor mechanisms. The application requests that some of the balances in these adjustor accounts (aggregating to approximately $267.6 million as of December 31, 2015) be transferred into base rates through the ratemaking process. This transfer would not have an incremental effect on customer bills. The average annual customer bill impact of APS’s request is an increase of 5.74%.

The principal provisions of the application are:

• a test year ended December 31, 2015, adjusted as described below;

• an original cost rate base of $6.8 billion, which approximates the ACC-jurisdictional portion of the book value of utility assets, net of accumulated depreciation and other credits, as of December 31, 2015;

• the following proposed capital structure and costs of capital:

	Capital Structure		Cost of Capital
Long-term debt	44.20	%	5.13	%
Common stock equity	55.80	%	10.50	%
Weighted-average cost of capital			8.13	%

• a 1% return on the increment of fair value rate base above APS’s original cost rate base, as provided for by Arizona law;

• a base rate for fuel and purchased power costs of $0.029882 per kilowatt-hour (“kWh”) based on estimated 2017 prices (a decrease from the current base fuel rate of $0.032071 per kWh);

• authorization to defer for potential future recovery its share of the construction costs associated with installing selective catalytic reduction equipment at the Four Corners Power Plant (estimated at approximately $400 million in direct costs). APS will propose that the rates established in this rate case be increased through a step mechanism beginning in 2019 to reflect these deferred costs;

• authorization to defer for potential future recovery in the Company’s next general rate case the construction costs APS incurs for its Ocotillo power plant modernization project, once the project reaches commercial operation. APS estimates the direct construction costs at approximately $500 million and that the new facility will be fully in service by early 2019;

• authorization to defer until the Company’s next general rate case the increase or decrease in its Arizona property taxes attributable to tax rate changes after the date the rate application is adjudicated;

• updates and modifications to four of APS’s adjustor mechanisms - the Power Supply Adjustor (“PSA”), the Lost Fixed Cost Recovery Mechanism (“LFCR”), the Transmission Cost Adjustor (“TCA”) and the Environmental Improvement Surcharge (“EIS”);

• a number of proposed rate design changes for residential customers, including:

◦ change the on-peak time of use period from 12 p.m. - 7 p.m. to 3 p.m. - 8 p.m. Monday through Friday, excluding holidays;

◦ reduce the difference in the on- and off-peak energy price and lower all energy charges;

◦ offer four rate plan options, three of which have demand charges and a fourth that is available to non-partial requirements customers using less than 600 kWh on average per month; and

◦ modify the current net metering tariff to provide for a credit at the retail rate for the portion of generation by rooftop solar customers that offsets their own load, and for a credit for excess energy delivered to the grid at an export rate.

• proposed rate design changes for commercial customers, including an aggregation rider that allows certain large customers to qualify for a reduced rate, an extra-high load factor rate schedule for certain customers, and an economic development rate offering for new loads meeting certain criteria.

The Company will request that the increase become effective July 1, 2017.  APS expects the ACC to issue a procedural schedule during the next sixty days detailing the timeline for addressing the application. APS cannot predict the outcome of its request.

Item 9.01Financial Statements and Exhibits.

(d)Exhibits

Exhibit No.	Registrant(s)	Description
99.1	Pinnacle West APS	APS Rate Case Filing Overview slide presentation for use at investor and analyst meetings from June 2, 2016 through June 14, 2016.
99.2	Pinnacle West APS	News Release issued on June 1, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PINNACLE WEST CAPITAL CORPORATION
	(Registrant)
Dated: June 1, 2016	By: /s/ James R. Hatfield
	James R. Hatfield
	Executive Vice President and
	Chief Financial Officer
	ARIZONA PUBLIC SERVICE COMPANY
	(Registrant)
Dated: June 1, 2016	By: /s/ James R. Hatfield
	James R. Hatfield
	Executive Vice President and
	Chief Financial Officer

Exhibit Index

Exhibit No.	Registrant(s)	Description
99.1	Pinnacle West APS	APS Rate Case Filing Overview slide presentation for use at investor and analyst meetings from June 2, 2016 through June 14, 2016.
99.2	Pinnacle West APS	News Release issued on June 1, 2016.

EX-99.1

Powering Growth, Delivering Value APS Rate Case Filing Overview l June 2016 POWERING GROWTH DELIVERING VALUE

Powering Growth, Delivering Value2 FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements based on current expectations, including statements regarding our earnings guidance and financial outlook and goals. These forward-looking statements are often identified by words such as “estimate,” “predict,” “may,” “believe,” “plan,” “expect,” “require,” “intend,” “assume” and similar words. Because actual results may differ materially from expectations, we caution you not to place undue reliance on these statements. A number of factors could cause future results to differ materially from historical results, or from outcomes currently expected or sought by Pinnacle West or APS. These factors include, but are not limited to: our ability to manage capital expenditures and operations and maintenance costs while maintaining high reliability and customer service levels; variations in demand for electricity, including those due to weather seasonality, the general economy, customer and sales growth (or decline), and the effects of energy conservation measures and distributed generation; power plant and transmission system performance and outages; competition in retail and wholesale power markets; regulatory and judicial decisions, developments and proceedings; new legislation, ballot initiatives and regulation, including those relating to environmental requirements, regulatory policy, nuclear plant operations and potential deregulation of retail electric markets; fuel and water supply availability; our ability to achieve timely and adequate rate recovery of our costs, including returns on and of debt and equity capital investments; our ability to meet renewable energy and energy efficiency mandates and recover related costs; risks inherent in the operation of nuclear facilities, including spent fuel disposal uncertainty; current and future economic conditions in Arizona, including in real estate markets; the development of new technologies which may affect electric sales or delivery; the cost of debt and equity capital and the ability to access capital markets when required; environmental and other concerns surrounding coal-fired generation, including regulation of greenhouse gas emissions; volatile fuel and purchased power costs; the investment performance of the assets of our nuclear decommissioning trust, pension, and other postretirement benefit plans and the resulting impact on future funding requirements; the liquidity of wholesale power markets and the use of derivative contracts in our business; potential shortfalls in insurance coverage; new accounting requirements or new interpretations of existing requirements; generation, transmission and distribution facility and system conditions and operating costs; the ability to meet the anticipated future need for additional generation and associated transmission facilities in our region; the willingness or ability of our counterparties, power plant participants and power plant land owners to meet contractual or other obligations or extend the rights for continued power plant operations; and restrictions on dividends or other provisions in our credit agreements and ACC orders. These and other factors are discussed in Risk Factors described in Part I, Item 1A of the Pinnacle West/APS Annual Report on Form 10-K for the fiscal year ended December 31, 2015, which you should review carefully before placing any reliance on our financial statements, disclosures or earnings outlook. Neither Pinnacle West nor APS assumes any obligation to update these statements, even if our internal estimates change, except as required by law.

Powering Growth, Delivering Value3 2016 APS RATE CASE APPLICATION • Filed June 1, 2016* • Propose new rates go into effect on July 1, 2017 • Docket Number: E-01345A-16-0036 • Additional details, including filing, can be found at http://www.azenergyfuture.com/rate-review/ * 1-month sufficiency review period by ACC

Powering Growth, Delivering Value4 2016 RATE CASE KEY FINANCIALS APS has requested a rate increase to become effective July 1, 2017 Test year ended December 31, 2015 Total Rate Base - Adjusted $8.01 Billion ACC Rate Base - Adjusted $6.77 Billion Allowed Return on Equity 10.5% Capital Structure Long-term debt 44.2% Common equity 55.8% Base Fuel Rate (¢/kWh) 2.9882 Post-test year plant period 18 months Overview of Rate Increase ($ in Millions) Total stated base rate increase (inclusive of existing adjustor transfers) $ 433.43 15.00% Less: Transfer to base rates of various adjustors already in effect (267.55) (9.26) Net Customer Bill Impact $ 165.88 5.74%

Powering Growth, Delivering Value5 Focus on Clean Energy Focus on Customers Focus on Innovation Focus on Sustainability • Generate power from diverse portfolio and support environmental improvements • Create sustainable path forward for flexible resource portfolio • Optimize customer service and reliability • Better align rates with the true cost of service • Provide rate gradualism and bill stability for customers by managing overall rate trajectory and the transition to new rate design • Prudently invest in new technologies • Implement new customer information system to enable adaptable customer programs and rates • Modernize rates to enable advanced technologies and grid services • Achieve an earned return that provides for financial stability and allows for sustainable investments in Arizona • Maintain structure of constructive regulatory support • Improve concurrent cost recovery of plant investments 2016 RATE CASE FRAMEWORK “A Bridge to the Future” Rate Case Objectives

Powering Growth, Delivering Value6 2016 RATE CASE SUMMARY Focus on Clean Energy Focus on Customers Focus on Innovation Focus on Sustainability Ocotillo Modernization Project • Requesting cost deferral order from in-service dates in 2018 and 2019 to effective date of rates in next rate case Four Corners Selective Catalytic Reduction (SCR) Equipment • Requesting cost deferral order from in-service dates to incorporation of the SCR costs in rates using a step-increase beginning in 2019 Residential Rate Design Modernization • Transition to 3-part residential rate structure including a variable (energy kWh) charge, a fixed (basic service) charge, and a demand charge • Modify net energy metering to differentiate compensation between energy consumed on site and exported energy General Service (Business) • Retire AG-1; introduce aggregation discount for customers with multiple sites, a new rate for customers with extra high load factors and a economic development rate Solar Partners Programs • Installing 10 MW of APS-owned residential PV systems on 1,600 homes with advanced inverters, including 4 MW of battery storage Red Rock Solar Generating Station • 40 MW utility-scale solar facility (post-test year plant) Microgrid Projects • Two microgrids in service by 3Q16; partnered with Marine Corps Air Station Yuma and Aligned Data Center in Phoenix Power Supply Adjustment • Include environmental chemical costs, generation-related water costs, and energy storage products from 3rd party providers Environmental Improvement Surcharge • Increase from ~$5M total cap to $10M year-over- year cap Depreciation Rate Changes • Change depreciation life schedules including Cholla Units 1 & 3, Ocotillo Units 1 & 2, Yucca Units 1-4 and AMI meters

Powering Growth, Delivering Value7 APS COST OF SERVICE Appropriate to place residential solar customers into a unique sub-category of customers 108% 86% Percent of Cost to Serve* Residential Solar Customers Demand Rate 71% • Cost of service shows disparities in ratio of allocated costs to provide electric service, and what customer classes pay for the services received • Solar customers on an energy-based rate avoid approximately $72 per month based on proposed rates • Current rate structure results in 96% of customers paying more than they should to subsidize rooftop solar • APS is the first utility to conduct a full cost of service study considering solar customers as a separate class Energy Rate 38% Total General Service (Business) Customers Total Residential Customers * Test-year ended December 31, 2015 based on current rates

Powering Growth, Delivering Value8 Focus Area Current State Rate Case Objective Time-of-Use Rates (TOU) • > 50% of residential customers are on a TOU rate • On-peak hours from 12-7 PM (M-F) • TOU difference in on-peak prices that are 4 times the off-peak prices • Most residential customers on a TOU rate • On-peak hours from 3-8 PM (M-F) to better align with system peak • TOU difference in on-peak prices that are 2 times the off-peak prices Demand Rates • 11% of residential customers are on demand rates, more than any other electric utility • Most residential customers on demand rates • Calculated on the highest demand averaged over a one-hour period during the on-peak period each month Basic Service (Fixed) Charge • Customers pay basic service charge ranging from $8.67 - $16.91 per month • Set basic service charge for all rate classes ranging from $14 - $24 per month Net Metering • Excess power compensated at full retail price • Excess power compensated at export price aligned with avoided cost • Recovery of cost to purchase through existing PSA mechanism • Grandfather qualified rooftop solar customers Lost Fixed Cost Recovery (LFCR) • 1% year-over-year adjustment cap based on total revenues • Recovers portion of costs reduced by energy efficiency (EE) and distributed generation (DG) programs • Similar construct, but increase year-over-year adjustment cap to 2% based on total revenues • Increased portion of lost fixed costs eligible for recovery RATE DESIGN MODERNIZATION Rate design that better aligns pricing with cost to serve and leverages existing platform

Powering Growth, Delivering Value9 RATE DESIGN MODERNIZATION Key residential rate proposals designed to reduce cost shift among customers • Streamlined rate choices for residential customers including combinations of the following: – Reductions to kWh (variable) charges; – Increases in basic service (fixed) charges; and – Variations of demand (kW) charges applied to on-peak hours • Modify the net energy metering transaction, while providing a grandfathering program for qualifying customers with rooftop solar Variable Variable (lower cost per kWh) Fixed Fixed Demand Current Customer Bill Proposed Customer Bill

Powering Growth, Delivering Value10 OCOTILLO MODERNIZATION PROJECT AND FOUR CORNERS SCRs Ocotillo Modernization Project Four Corners SCRs In-Service Dates Units 6, 7 – Fall 2018 Units 3, 4 and 5 – Spring 2019 Unit 5 – Late 2017 Unit 4 – Spring 2018 Total Cost (APS) $500 million $400 million Estimated Cost Deferral $45 million (through 2019) $30 million (through 2018) Rate Request Requesting cost deferral from date of commercial operation to the effective date of rates in next rate case Requesting cost deferral order from time of installation to incorporation of the SCR costs in rates using a step increase beginning in 2019 • Requesting Accounting Deferral Orders for two large generation-related capital investments – Ocotillo Modernization Project: Retiring two aging, steam-based, natural gas units, and replacing with 5 new, fast-ramping, combustion turbine units – Four Corners Power Plant: Install Selective Catalytic Reduction (SCR) equipment to comply with Federal environmental standards

Powering Growth, Delivering Value APPENDIX

Powering Growth, Delivering Value12 RATE BASE APS’s revenues come from a regulated retail rate base and meaningful transmission business $6.0 $6.5 $7.9 $1.3 $1.4 $1.7 2014 2015 2016 2017 2018 APS Rate Base Growth Year-End ACC FERC Total Approved Rate Base Projected Most Recent Rate Decisions ACC FERC Rate Effective Date 7/1/2012 6/1/2016 Test Year Ended 12/31/2010* 12/31/2015 Rate Base $5.7B $1.4B Equity Layer 54% 56% Allowed ROE 10.00% 10.75% *Adjusted to include post test-year plant in service through 3/31/2012 83% 17% Generation & Distribution Transmission Rate base $ in billions, rounded

Powering Growth, Delivering Value13 $263 $220 $218 $298 $66 $77 $234 $115 $44 $232 $194 $90 $58 $110 $1 $1 $201 $114 $200 $150 $340 $364 $354 $382 $85 $88 $84 $88 2015 2016 2017 2018 CAPITAL EXPENDITURES Capital expenditures are funded primarily through internally generated cash flow ($ Millions) $1,205 $1,285 Other Distribution Transmission Renewable Generation Environmental1 Traditional Generation Projected $1,124 New Gas Generation2 $1,057 • The table does not include capital expenditures related to El Paso's 7% interest in Four Corners Units 4 and 5 of $3 million in 2015, $30 million in 2016 and $25 million in 2017. • 2016 – 2018 as disclosed in First Quarter 2016 Form 10-Q. 1 Includes Selective Catalytic Reduction controls at Four Corners with in-service dates of late 2017 (Unit 5) and Spring 2018 (Unit 4) 2 Ocotillo Modernization Project: 2 units scheduled for completion in Fall 2018, 3 units schedule for completion in Spring 2019

Powering Growth, Delivering Value14 THE GRID IS EVOLVING – INCREASINGLY DYNAMIC AND COMPLEX Drivers for Change – Traditional grid built for one-way flow – Technology advancements (storage, home energy management) – Changing customer needs and demands – Proliferation of distributed solar energy, which does not align with peak The Modern Grid – New technologies to enable two-way flow – Proactive vs. reactive operations and maintenance – Modern rate structure – New ways to interact with customer – Mobility for our field personnel – Smarter, more flexible real- time system operations – Support consumer products and services – Addresses cybersecurity APS Laying Foundation for the Future – Solar R&D initiatives • Solar Partner Program • Solar Innovation Study – Smart meters fully deployed – Investing in peaking capacity upgrades (Ocotillo) – Evaluating storage • Battery pilot investments • Microgrids (Marine Corps Air Station Yuma) – Software upgrades for distribution operations and customer service – Ensuring our people have the relevant skill sets • Grid stability, power quality and reliability remain the core of a sustainable electrical system • APS is at the forefront of utilities designing and planning for the electric grid • Rates need to be modernized to enable advanced technologies and to reflect the true cost of service

Powering Growth, Delivering Value15 APS RATE DESIGN: A SOLID FOUNDATION TO BUILD ON Over 50% of APS residential customers are already on time-of-use rates, including 11% on demand rates 0% 25% 50% 75% 100% Standard TOU - Energy TOU - Demand

Powering Growth, Delivering Value16 RESIDENTIAL VS. UTILITY-SCALE SOLAR Performance at system peak 0 2,000 4,000 6,000 8,000 0 100 200 300 400 500 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 M W Hour Ending On August 15th, APS customers hit “peak demand” for 2015 using more than 7,300 MW of electricity 0 2,000 4,000 6,000 8,000 0 100 200 300 400 500 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 M W Hour Ending Rooftop Output System Load 6,315 166 7,362 75 6,952 0 AZ Sun Output System Load 7,362 140 • Noon: Customer demand still increasing; rooftop solar peaks and begins to decline • 5PM: Customer demand peaks; rooftop solar producing at 38% of total capacity • 7PM: Rooftop output at zero, but demand still above 6,900 MW of power • Solar panels at 8 of the AZ Sun plants rotate to track the sun, achieving highest production earlier in the day and maintaining it later • At peak demand, utility-scale solar producing at nearly 80% of total capacity Residential Rooftop Solar AZ Sun Utility-Scale Solar

Powering Growth, Delivering Value17 ROOFTOP SOLAR CUSTOMERS USE THE GRID 24 HOURS PER DAY TYPICAL GRID INTERACTION FOR ROOFTOP SOLAR • Customers with rooftop solar systems do not pay for all of the electric services they use • These unpaid costs are then paid by other customers (through higher rates) that can’t have or don’t want solar • This issue will only get bigger over time

Powering Growth, Delivering Value18 Bob Stump (R)* Tom Forese (R) Doug Little (R) Chairman Terms to January 2019Terms to January 2017 Bob Burns (R) Other State Officials Andy Tobin (R) ARIZONA CORPORATION COMMISSION * Term limited - elected to four-year terms (limited to two consecutive terms) ACC Utility Division Director - Tom Broderick RUCO Director - David Tenney

Powering Growth, Delivering Value19 2016 KEY DATES ACC Key Dates Docket # Q1 Q2 Q3 Q4 Key Recurring Regulatory Filings Lost Fixed Cost Recovery E-01345A-11-0224 Jan 15 Transmission Cost Adjustor E-01345A-11-0224 May 15 Renewable Energy Surcharge TBD Jul 1 APS Rate Case E-01345A-16-0036 Jan 29: Notice of Intent Filing Jun 1: Initial filing TBD TBD Resource Planning and Procurement E-00000V-15-0094 Mar 1: Preliminary IRP filed Oct 1: File updates to preliminary IRP* Value and Cost of Distributed Generation E-00000J- 14-0023 Feb 25: DG Methodologies & supporting testimony filed Apr 7: Rebuttal testimony and alternate proposals due Apr 15: Pre-hearing Apr 18: Hearing; Jun 8-9 Hearing Jun 13: Responses Due Jun 20: Initial briefs Jul 8: Reply briefs TBD: ALJ Order ACC Open Meetings - ACC Open Meetings Held Monthly * April 2017: Final IRP due Other Key Dates Docket # Q1 Q2 Q3 Q4 Arizona State Legislature n/a In session Jan 11- May 7 (Adjourned) Elections n/a Aug 30: Primary Nov 8: General All Source Request for Proposal (RFP) n/a Mar 11: RFP Issued Jun 9: Responses Due

Powering Growth, Delivering Value20 ARIZONA ELECTRIC UTILITIES GENERAL RATE CASES UNS Electric (93,000 customers) Docket # E-04204A-15-0142 Application filed May 5, 2015 Direct testimony - ex rate design, cost of service (Nov 6, 2015) Direct testimony - rate design, cost of service (Dec 9, 2015) Rebuttal testimony (Jan 19, 2016) Surrebuttal testimony (Feb 23, 2016) Rejoinder testimony (Feb 29, 2016) Pre-hearing (Feb 26, 2016) Hearing (Mar 1, 2016) Post hearing initial briefs (April 25, 2016) Reply briefs (May 11, 2016) ALJ order expected in July; followed by ACC decision Tucson Electric Power Company (415,000 customers) Docket # E-01933A-15-0322 Application filed Sep 4, 2015 Direct testimony – ex rate design and cost of service (Jun 3, 2016) Direct testimony – rate design and cost of service (Jun 24, 2016) Rebuttal testimony (Jul 25, 2016) Surrebuttal testimony (Aug 18, 2016) Rejoinder testimony (Aug 25, 2016) Pre-hearing (Aug 25, 2016) Hearing (Aug 31, 2016) Sulphur Springs Valley Electric Cooperative (58,000 customers) Docket # E-01575A-15-0312 Application filed Aug 31, 2015 Direct testimony - ex rate design, cost of service (Mar 18, 2016) Direct testimony - rate design, cost of service (Apr 1, 2016) Rebuttal testimony (Apr 15, 2016) Surrebuttal testimony (May 4, 2016) Rejoinder (May 11, 2016) Pre-hearing (May 13, 2016) Hearing (May 17, 2016) Settlement discussions began April 15, 2016 Trico Electric Cooperative (38,000 customers) Docket # E-01461A-15-0363 Application filed Oct 23, 2015 Direct testimony - ex rate design, cost of service (May 4, 2016) Direct testimony - rate design, cost of service (May 25, 2016) Rebuttal testimony (Jun 22, 2016) Surrebuttal testimony (Jul 8, 2016) Rejoinder (Jul 15, 2016) Pre-hearing (Jul 18, 2016) Hearing (Jul 19, 2016)

Powering Growth, Delivering Value21 INVESTOR RELATIONS CONTACTS Paul J. Mountain, CFA General Manager, Investor Relations & Audit Services (602) 250-4952 paul.mountain@pinnaclewest.com Ted Geisler Director, Investor Relations (602) 250-3200 ted.geisler@pinnaclewest.com Chalese Haraldsen (602) 250-5643 chalese.haraldsen@pinnaclewest.com Pinnacle West Capital Corporation P.O. Box 53999, Mail Station 9998 Phoenix, Arizona 85072-3999 Visit us online at: www.pinnaclewest.com

EX-99.2

FOR IMMEDIATE RELEASE		June 1, 2016
Media Contacts:	Jenna Shaver (602) 250-4403
	Jim McDonald (602) 321-3738
Investor Contact:	Ted Geisler (602) 250-3200
Websites:	azenergyfuture.com; aps.com/newsroom

APS REQUESTS FIRST RATE REVIEW IN FIVE YEARS

Proposal enables continued investment in reliability, clean energy, innovation

PHOENIX - Arizona Public Service today asked the Arizona Corporation Commission for the first comprehensive review of the company’s rates in five years.

“Our proposal moves Arizona forward with continued investments in an advanced energy grid, a cleaner energy mix and new technologies that will enable our customers to have more choices and control,” said Don Brandt, chairman, president and CEO of APS.

If approved, the request would enable APS to:

• Invest $3.6 billion over the next three years in upgrades and maintenance for the energy grid;

• Complete a $500 million investment to modernize the Ocotillo Power Plant with more efficient generation that reduces emissions and water use;

• Support a $400 million investment to reduce emissions at the Four Corners Power Plant and comply with more stringent federal environmental standards;

• Fund the continued development of innovative technologies such as battery storage, microgrids and advanced solar research;

• Continue industry-leading performance at the Palo Verde Nuclear Generating Station, which produces 80 percent of Arizona’s carbon-free electricity;

• Increase funding by 35 percent for financial assistance to help limited-income customers, to $48 million annually; and

• Create new economic development rates to help attract jobs and investment to Arizona.

APS also proposes changes to the rate options it offers to customers. For residential customers, the APS plan would:

• Offer the choice of three options with demand-based components that more accurately reflect the way customers use energy, and give customers an additional way to save on their monthly bills;

• Create a new flat-bill option for customers who don’t want to actively manage their energy use;

• Provide a new rate option tailored for small-usage customers;

• Reduce the “on-peak” period by two hours each weekday, to 3-8 p.m.; and

• Offer four new “off-peak” holidays, increasing the total number to 10.

“These new rate options would give customers more ability to control their energy bills by taking a few simple actions,” said Brandt. “We already have 120,000 customers on demand-based rates - it’s our fastest-growing rate plan because it works for customers.”

For business customers, the APS plan would:

• Offer a new economic development rate option to encourage businesses to relocate or expand;

• Create a new rate to attract highly-efficient customers, such as data centers, that need affordable, highly reliable electricity;

• Provide an aggregation rate that lowers energy costs for chain accounts such as grocery stores; and

• Improve time-of-use options to work better with the operating schedules of many businesses.

“By investing $3.6 billion in Arizona’s energy grid over the next three years, we’ll also be stimulating Arizona’s economy and creating opportunities for suppliers,” said Brandt. He added, “We are recommending new economic development rates that will help attract new jobs and investment to Arizona, with a particular emphasis on high-tech data centers.”

APS is requesting a net increase of 5.74 percent, or $166 million annually, to support its operations and investments in the energy grid. The average monthly bill for residential customers would increase 7.96 percent, from $139.32 to $150.41. Of that $11.09 monthly increase, $1.74 is due to subsidies for the rooftop solar industry, which continue to grow. Business customers would see increases ranging from 0.4 percent to 6.14 percent depending on the size and energy usage of the business.

APS prices have remained stable over the last 20 years, increasing 1.6 percent per year on average - well below the rate of inflation. The company noted in its filing that through efficiency measures and other cost-saving initiatives, it has reduced costs by $207 million since 2008. “It was important that we tighten our own belt before asking customers to pay more,” said Brandt.

“We realize that not all of our customers have benefited from Arizona’s economic recovery, and that’s why we propose to increase funding for limited-income assistance programs that help customers struggling to make ends meet,” said Brandt.

The APS plan also benefits customers by reducing the lucrative subsidy currently paid to support the rooftop solar industry by the 96 percent of residential customers who do not have rooftop solar. The change would not affect the 40,000 customers who already have rooftop solar, or those who install systems prior to July 1, 2017.

“Our proposal is pro-solar and pro-customer. We want to continue Arizona’s solar leadership the right way -with more solar, for more customers, without driving up the energy bills paid by non-solar customers,” said Brandt. “Importantly, our proposal does not affect customers who have already made the decision to put solar on their homes.”

APS first proposed a reduction in the subsidy in 2013; the resulting cost shift has now grown into a billion-dollar price tag paid for by non-solar customers, and it will continue to grow until the ACC takes action.

“It’s time for our industry to adapt its pricing model to reflect new energy technologies and the changing way customers are using electricity,” said Brandt. “There will be the usual naysayers who want to protect the status quo for their short-term financial gain, but Arizona has delayed too long already.”

APS, Arizona’s largest and longest-serving electricity utility, serves nearly 1.2 million customers in 11 of the state’s 15 counties. With headquarters in Phoenix, APS is the principal subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).