Exhibit 99.2

ARIZONA PUBLIC SERVICE COMPANY
NON-GAAP FINANCIAL MEASURE RECONCILIATION — OPERATING INCOME
(GAAP MEASURE) TO GROSS MARGIN (NON-GAAP FINANCIAL MEASURE)
(in thousands)

	THREE MONTHS ENDED
	MARCH 31,					Increase (Decrease)
	2006			2005		Pretax			After Tax
RECONCILIATION OF GROSS MARGIN
Operating Income (closest GAAP measure)	$	25,044		$	58,743	$	(33,699	)	$	(20,540	)
Plus:
Operations and maintenance		173,353			142,294		31,059			18,930
Depreciation and amortization		86,311			82,214		4,097			2,497
Income taxes		(3,029	)		16,380		(19,409	)		(11,830	)
Other taxes		35,548			31,445		4,103			2,501
Gross margin	$	317,227		$	331,076	$	(13,849	)	$	(8,442	)