Pinnacle West(US:PNW)2022-02-25 19:41Financial Data and Key Metrics Changes - In Q4 2021, the company earned $0.24 per share compared to a loss of $0.17 per share in Q4 2020, with unique items in 2020 affecting comparability [20] - For the full year 2021, earnings were $5.47 per share, up from $4.87 per share in 2020 [21] - Weather-normalized sales growth for 2021 was 4.2%, with a stronger-than-expected Q4 growth of 6.7% [22][27] Business Line Data and Key Metrics Changes - The non-nuclear fleet achieved a reliability performance with a summertime equivalent availability factor (EAF) of 94.4% [11] - Year-over-year retail customer growth ended at 2.2% for 2021 [23] Market Data and Key Metrics Changes - Employment in Metro Phoenix increased by 4% compared to a national average of 2.8%, with Arizona achieving pre-pandemic employment levels [24] - Maricopa County residential housing permits reached over 43,000, the strongest year since 2005 [24] Company Strategy and Development Direction - The company aims to improve customer communication and engagement, enhance regulatory relationships, and execute its clean energy commitment [16] - The company is focused on building a constructive relationship with regulators to support capital investment and growth [33][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from the unfavorable rate case outcome but remains optimistic about long-term value for customers and shareholders [16][19] - The company is committed to disciplined cost management despite inflationary pressures [26][28] Other Important Information - The company celebrated two years since announcing its goal to reach 100% clean carbon-free energy by 2050, having procured nearly 1,400 megawatts of clean energy resources [14] - The company received several awards in 2021 for its commitment to ESG, including the Energy Star Partner of the Year Award and recognition from CDP for corporate sustainability [15] Q&A Session Summary Question: Concerns about generation expenses disallowances and growth - Management acknowledged the disconnect between high growth and low returns on equity, emphasizing the need for regulatory support to recover costs [33] Question: Legislative interest in rate-making - Management noted that the commission's authority over ratemaking is constitutional, limiting legislative influence, and emphasized the importance of dialogue with stakeholders [38] Question: Capital expenditure and customer growth - Management confirmed that capital budgets are set conservatively to maintain affordability while addressing customer growth [44] Question: Rate case appeal timeline - Management clarified that the appeal process is not a gating issue for the upcoming rate case, with key dates for briefs outlined [54] Question: Renewable procurement and supply chain issues - Management reported minor delays in renewable projects but does not anticipate significant impacts on the capital program [73] Question: Concurrent recovery mechanism for renewables - Management confirmed that discussions regarding a concurrent recovery mechanism for renewables are ongoing [75]