Pinnacle West(US:PNW)2025-05-01 16:00Financial 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]