Pinnacle West Capital Corp. executives said they remain committed to a $4.7 billion total capital expenditure forecast for 2020 through 2022, largely driven by clean energy investments and Arizona's still vigorous economic expansion, despite the COVID-19 pandemic.

To help customers who are struggling to pay their electricity bills due to the novel coronavirus, state regulators on May 5 agreed to have Pinnacle West subsidiary Arizona Public Service Co., or APS, return to customers millions of dollars in unspent money the utilities collected for energy efficiency programs.

But despite that development, as well as changes in operations and electricity sales stemming from the COVID-19 pandemic, Chairman, President and CEO Jeffrey Guldner and Senior Vice President and CFO Ted Geisler provided an upbeat assessment during the company's May 8 first-quarter earnings call.

"We don't know today what the ultimate disruptions or impacts of this pandemic will be, but I have no doubt we'll navigate both through the near term and continue to deliver on our long-term goals," Guldner said.

Guldner said the company expects to announce the results of an outstanding wind and solar request for proposals in the near future. The company will evaluate assumptions about the utility's future generation resource needs and make adjustments in response to any change in customer needs that might result from the pandemic. But, he said, "our resource plans for additional generation remain in place."

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Pinnacle West subsidiary APS, has moved many of its employees to work from home, including 140 call center associates who provide customer service, Guldner said. In the field, employees continue to prepare for the summer peak demand season, although some discretionary maintenance has been deferred until later in the year in order to reduce the number of workers required to be on-site and to minimize power disruptions to customers, he continued.

High-load customers continue to develop commercial and manufacturing facilities in the utility's service area, according to Geisler, who pointed out that two more data centers just opened.

Since many Arizona businesses have closed in response to COVID-19, Geisler said, the utility has seen a 14% reduction in weather-normalized commercial and industrial load through April 30, compared to the same period in 2019. Arizona Gov. Doug Ducey's stay-at-home order remains in effect through May 15, although some retail reopenings are beginning prior to that date, Geisler noted.

To compensate for lower electricity sales, APS continues to reduce operating costs and increase efficiency. Geisler specifically pointed to the company's digital transformation program, through which robots have been deployed to automate certain tasks at power plants.

On the regulatory front, the Arizona Corporation Commission is adjusting its schedules to address COVID-19 concerns. That impacts APS's current general rate case, which the utility filed in October 2019, asking for a $184 million, or 5.6%, increase in revenue. Guldner said commission staff has delayed filing testimony in that proceeding for three months, so a hearing now is set to begin Sept. 30.

The commission wanted a fully litigated case rather than a multiparty settlement of terms, but the pandemic might make settlement a possibility, Geisler said.

$36M in refunds granted to customers

To help customers cope with the ramifications of COVID-19, the commission on May 5 voted to have APS return $36 million of demand-side management, or DSM, funds to customers through a one-time bill credit in June, Guldner noted. APS has not yet spent the money it collected for energy efficiency and DSM programs because the commission had not approved the utility's plans for those programs, APS spokesman Alan Bunnell said before the earnings call.

The commission also voted to refund the entire $8.3 million in unspent funds Fortis Inc. subsidiary Tucson Electric Power Co. collected for its energy efficiency and DSM programs.

Customer credits will vary based on individual usage and other circumstances, the commission said in a press release.

APS ceased disconnections for non-payment beginning March 13 and is waiving late fees on past due balances during the pandemic, the commission said, noting that APS also established a customer support fund with $1.5 million in shareholder money to assist customers who are having trouble paying their bills.

The commission has not yet taken any action on future reimbursement to the utility for deferring bill collections, but Guldner said the agency has discussed the treatment of costs associated with COVID-19. An accounting order related to the pandemic costs will be brought before the commission later, he added.