Pinnacle West Capital Corporation (NYSE:PNW) Q3 2020 Earnings Conference Call - Final Transcript

Oct 30, 2020 • 12:00 pm ET

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Pinnacle West Capital Corporation (NYSE:PNW) Q3 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Ted N. Geisler

as one time opportunities, like our $10 million contribution to the APS Foundation, which supports our community non-profits.

Our revised 2020 O&M guidance range of $870 million to $890 million reflects these items. While we believe this increase in O&M demonstrates prudent, planning and flexibility through this challenging year, we do remain focused on our lean initiatives and continue to see our core O&M trend down. We are executing our plan to reduce 2020 O&M expense by $20 million, including $10 million through improved procurement and contract management activities, and another $10 million in several small operating efficiencies across the enterprise. We also continue to partner with Arizona State University to train our workforce on lean skills and are excited about the long-term potential in continuing to streamline our business. While we don't enter a year counting on whether it would be a driver, we do enter the year prepared to take advantage of above normal weather when it makes sense to do so. This can help us mitigate the impacts of mild weather in future years, while also enabling our investment in certain key initiatives that improve customer experience, a focus area for our company.

Our resource planning and capital expenditure forecast have also been revised. The delay in our clean energy procurement impacted by the McMicken investigation, slightly reduced our 2020 capital expenditure forecast by $68 million. However, we do remain committed to our clean energy commitments and have made progress with our resource acquisition activities. In September, we executed a 200 megawatt wind PPA with a 20-year term. This is a re-power of an existing wind facility and is expected to be fully upgraded with additional capacity in 2021. We also plan to issue two new RFPs. One outsourced RFP and an additional utility owned energy storage RFP at our existing solar facilities.

While it was an exceptionally hot summer, we are grateful the weather tailwind allowed us to further increase financial assistance to customers struggling to pay their bills as a result of COVID-19, and to accelerate investments that will enhance the quality of our service and maintain our record for providing top tier reliability. As Jeff mentioned, we will continue to focus on our regulatory outcomes in the near term, while executing our long-term plan to deliver value for our customers, shareholders and community stakeholders.

This concludes our prepared remarks. I'll now turn the call back over to the operator for questions.