Financial Data and Key Metrics Changes - For Q1 2025, the company reported a loss of $0.04 per share compared to earnings of $0.15 per share in Q1 2024, primarily due to the sale of Wright Canyon Energy in 2024 which provided a one-time benefit of $0.15 [15][16] - The increase in O&M, interest expense, and depreciation and amortization negatively impacted financial results, while new rates effective March 8, 2024, provided a $0.29 year-over-year benefit [16][19] - Weather-normalized sales growth was 2.1% for the quarter, with expectations of overall growth meeting guidance of 4% to 6% for the year [19][20] Business Line Data and Key Metrics Changes - Customer growth for the quarter was strong at 2.3%, near the high end of annual guidance, driven by significant growth in manufacturing and data center customers [18][19] - The company experienced a weather-normalized sales growth of 2.1%, with C&I growth at 5.3% due to the ramp-up of manufacturing and data center customers [19][20] Market Data and Key Metrics Changes - Arizona's economy is thriving, with significant investments in semiconductor manufacturing, including TSMC's increased investment to $165 billion, which is expected to create tens of thousands of high-paying jobs [6][20] - Arizona's total international exports rose nearly 12% in 2024, the highest growth rate in the country, led by sectors such as mining, semiconductors, and aerospace products [8] Company Strategy and Development Direction - The company is focused on enhancing customer experience and reliability, with ongoing investments in grid infrastructure and advanced digital platforms [9][12] - A rate case filing is planned for midyear, aiming to recover costs and develop a modernized rate structure to support high load factor customers [13][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing their strategy while creating customer and shareholder value, highlighting the robust growth in Arizona's economy and the need for continued investments [14][22] - The company is preparing for a significant increase in demand due to the growth of high load factor customers and ongoing economic development in the region [20][22] Other Important Information - The company has been recognized as one of the most trustworthy companies in America for 2024 by Newsweek [12] - The company is actively evaluating project proposals for new resources to be in service between 2028 and 2030, seeking at least 2,000 megawatts [11][55] Q&A Session Summary Question: Impact of TSMC customer additions on long-term forecast - The first fabrication facility is included in the forecast, and the ramp-up in C&I sales is attributed to TSMC and data centers [27][28] Question: Confirmation of retail rate return on new disclosures - The pipeline of opportunities extends beyond the three-year plan, with strategic transmission projects and generation investments highlighted [31][32] Question: Update on high load factor customer pipeline - The company remains committed to four gigawatts and has interest from over 10 gigawatts, with ongoing assessments of customer needs [43][44] Question: Regulatory lag expectations for 2026 - The focus is on minimizing regulatory lag through the upcoming rate case, with intentions to design a formula rate plan to address this issue [40][41] Question: Update on coal plant closure - The Cholla coal plant has been retired in accordance with federal law, and the company is exploring future repurposing options for the site [94][95] Question: Clarification on residential sales growth trends - The underlying sales growth trends are strong, with adjustments in accounting for unbilled revenues impacting reported figures [102][103] Question: Timing for formula rate adjustments - The intent is to have the first formula rate adjustment in 2027 following the conclusion of the current rate case [107][108]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported a loss of $0.04 per share compared to earnings of $0.15 per share in Q1 2024, primarily due to the sale of Wright Canyon Energy in 2024 which provided a one-time benefit of $0.15 [14][15] - The increase in operational and maintenance (O&M) expenses, interest expense, and depreciation and amortization negatively impacted financial results, while new rates effective March 8, 2024, provided a $0.29 year-over-year benefit [15][20] - Weather-normalized sales growth was 2.1% for the quarter, driven by strong commercial and industrial (C&I) growth of 5.3% [18][19] Business Line Data and Key Metrics Changes - Customer growth for the quarter was strong at 2.3%, near the high end of annual guidance, with Maricopa County being the third fastest growing county in the US [16] - The company’s capital plan is designed to meet the needs of ongoing customer growth and ensure reliable service [16][20] - The company expects overall weather-normalized sales growth to meet guidance expectations of 4% to 6% for the year [18] Market Data and Key Metrics Changes - Arizona's economy is thriving, with significant investments in semiconductor and advanced manufacturing, including TSMC's increased investment to $165 billion [5][19] - Arizona's total international exports rose nearly 12% in 2024, the highest growth rate in the country, driven by sectors such as mining and aerospace [6][7] Company Strategy and Development Direction - The company is focused on providing reliable service and enhancing customer experience through investments in digital platforms and infrastructure [11][12] - A rate case filing is planned for midyear 2025 to recover costs and investments, aiming to modernize the rate structure and reduce regulatory lag [12][21] - The company is actively evaluating project proposals for new resources to be in service between 2028 and 2030, seeking at least 2,000 megawatts [10][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in executing the strategy while creating customer and shareholder value [13] - The regulatory environment is being addressed to minimize lag and ensure competitive returns on equity [40][42] - The company is exploring future opportunities for repurposing retired coal plant sites for new generation technologies [92] Other Important Information - The company was recognized by Newsweek as one of the most trustworthy companies in America for 2024 [11] - The company is in the final stages of planned maintenance activities for generation units, with Palo Verde unit one expected to return to service in early May [10][12] Q&A Session Summary Question: Impact of TSMC customer additions on long-term outlook - The first fabrication facility is in full production, and the ramp-up in C&I sales is partly due to TSMC and data centers [28] - Future fabs are expected to accelerate, with ongoing evaluations of infrastructure needs [30] Question: Current pipeline of high load factor customers - The company remains committed to four gigawatts and is assessing interest from an additional 10 gigawatts [44] Question: Regulatory lag and formula rate plan - The intent is to minimize regulatory lag through the upcoming rate case, with a formula rate plan designed for annual adjustments [40][42][104] Question: Update on Eldorado investment - A gain was recognized due to higher profitability from a long-standing investment in an electric switchgear company [87][88] Question: Coal plant closure and future plans - The Cholla coal plant has been retired, and the site is being evaluated for potential new generation technologies [92][93] Question: Sales growth trends and residential usage - Underlying sales growth trends remain strong, with adjustments in accounting impacting reported figures [96][98]