PINNACLE WEST CAPITAL CORP Q4 FY2024 earnings call

Jeff Guldner Highlights:

• Proud of company accomplishments in 2024, meeting/exceeding targets, including strong service reliability.
• Regulatory progress: constructive outcome in a case, commission efforts to reduce regulatory lag, new commissioners and leadership changes.
• Operations: field team's execution, zero serious injuries/fatalities in 2024, peak energy demand record in August 2024, Palo Verde Generating Station's nuclear units' strong performance.
• Announced retirement on March 31, 2025.

Ted Geisler Highlights:

• Recognized Jeff's leadership, future focus on grid expansion, customer experience, talent development.
• Arizona's growth with TSMC, Amcor Technology, etc., driving economic growth. Residential and C&I customer growth. Large transmission and generation expansion plans.
• Decarbonization progress, delivering top quartile reliability, 54% carbon-free energy mix in 2024. Plan to file new rate case midyear 2025.

Andrew Cooper Highlights:

• Shared Q4 and full-year 2024 financial results, sales growth trends (2.1% customer growth, 5.7% full-year sales growth).
• Cost management focus, reaffirmed 2025 guidance including 4%-6% weather normalized sales growth and long-term 5%-7% EPS growth guidance.

No specific product segment financial performance with absolute terms and revenue contribution % provided in the transcript.

Guidance:

• Reiterated 2025 weather normalized sales growth guidance remains unchanged at 4% to 6%, matching long-term expectations with extra high load factor C&I customers contributing 3% to 5%.
• Reaffirmed capital and financing plans, focusing on infrastructure strengthening and timely investment recovery.
• Maintained long-term 5% to 7% EPS growth guidance based on midpoint of original 2024 guide of $4.60 to $4.80 per share.

Risks:

• No specific detailed risks discussed beyond general regulatory considerations related to rate cases and regulatory lag.

Question and Answer

Q: Julien Dumoulin-Smith asked about formula rates and CapEx trends.

A: Ted Geisler mentioned being open to settlements but preparing for a litigated case, and Andrew Cooper discussed CapEx trends related to longer lead time projects and future capital allocation.

Q: Michael Lonegan asked about EPS growth and House Bill 2201.

A: Ted Geisler stated focus on 5%-7% EPS growth with smoother profile and monitoring House Bill 2201 progress.

Q: Travis Miller asked about midyear 2025 rate case, ROE, and CapEx shifts.

A: Ted Geisler explained rate case timeline and ROE considerations, and Andrew Cooper discussed capital allocation opportunities with formula rates.

Q: Chris Ellinghaus asked about CapEx timeline, new nuclear.

A: Ted Geisler discussed new nuclear assessment process, collaboration with utility partners, and monitoring technology maturity for potential future nuclear investments.