Lines of Credit and Short-Term Borrowings

12 Months Ended

Dec. 31, 2021

Lines of Credit and Short-Term Borrowings

Lines of Credit and Short-Term Borrowings

Lines of Credit and Short-Term Borrowings

Pinnacle West and APS maintain committed revolving credit facilities in order to enhance liquidity and provide credit support for their commercial paper programs, to refinance indebtedness, and for other general corporate purposes.

The table below presents the consolidated credit facilities and the amounts available and outstanding (dollars in thousands):

	December 31, 2021						December 31, 2020
	Pinnacle West		APS		Total		Pinnacle West		APS		Total
Commitments under Credit Facilities	$	200,000	$	1,000,000	$	1,200,000	$	231,000	$	1,000,000	$	1,231,000
Outstanding Commercial Paper, Term Loan and Revolving Credit Facility Borrowings	(13,300)		(278,700)		(292,000)		(169,000)		—		(169,000)
Amount of Credit Facilities Available	$	186,700	$	721,300	$	908,000	$	62,000	$	1,000,000	$	1,062,000
Commitment Fees	0.175%		0.125%				0.125%		0.100%

Pinnacle West

On May 5, 2020, Pinnacle West refinanced its 364-day $50 million term loan agreement with a new 364-day $31 million term loan facility that would have matured May 4, 2021. Borrowings under the facility bore interest at Eurodollar Rate plus 1.40% per annum. Pinnacle West repaid this facility on April 27, 2021.

On May 28, 2021, Pinnacle West replaced its $200 million revolving credit facility that would have matured on July 11, 2023, with a new $200 million revolving credit facility that matures on May 28, 2026. Pinnacle West has the option to increase the amount of the facility up to a maximum of $300 million upon the satisfaction of certain conditions and with the consent of the lenders.  Interest rates are based on Pinnacle West’s senior unsecured debt credit ratings and the agreement includes a sustainability-linked pricing metric which permits an interest rate reduction or increase by meeting or missing targets related to specific environmental and employee health and safety sustainability objectives. The facility is available to support Pinnacle West’s general corporate purposes, including support for Pinnacle West's $200 million commercial paper program, for bank borrowings or for issuances of letters of credits. At December 31, 2021, Pinnacle West had no outstanding borrowings under its revolving credit facility, no letters of credit outstanding under the credit facility and $13 million of commercial paper borrowings.

APS

On May 28, 2021, APS replaced its two $500 million revolving credit facilities that would have matured on June 29, 2022 and July 11, 2023, respectively, with two new $500 million revolving credit facilities that total $1 billion and that mature on May 28, 2026.  APS may increase the amount of each facility up to a maximum of $700 million, for a total of $1.4 billion, upon the satisfaction of certain

conditions and with the consent of the lenders.  Interest rates are based on APS’s senior unsecured debt credit ratings and the agreements include a sustainability-linked pricing metric which permits an interest rate reduction or increase by meeting or missing targets related to specific environmental and employee health and safety sustainability objectives. These facilities are available to support APS’s general corporate purposes, including support for APS’s $750 million commercial paper program, for bank borrowings or for issuances of letters of credit.  At December 31, 2021, APS had no outstanding borrowings under its revolving credit facilities, no letters of credit outstanding under the credit facilities and $279 million of outstanding commercial paper borrowings.

See “Financial Assurances” in Note 11 for a discussion of other outstanding letters of credit.

Debt Provisions

On December 17, 2020, the ACC issued a financing order in which, subject to specified parameters and procedures, it approved APS’s short-term debt authorization equal to a sum of (i) 7% of APS’s capitalization, and (ii) $500 million (which is required to be used for costs relating to purchases of natural gas and power). See Note 7 for additional long-term debt provisions.