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Amended_Final_FERC_Formula_2010

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Arizona Public Service Company
                                                                                                                          FERC Form 1 Page # or
Formula Rate -- Appendix A                                                                                 Notes               Instruction           2010

Shaded cells are input cells
Allocators

       Wages & Salary Allocation Factor
  1        Transmission Wages Expense                                                                                p354.21.b                       15,047,067

  2          Total Wages Expense                                                                                     p354.28b                       370,850,556
  3          Less A&G Wages Expense                                                                                  p354.27b                        82,437,809
  4          Total                                                                                                   (Line 2 - 3)                   288,412,747

  5    Wages & Salary Allocator                                                                                      (Line 1 / 4)                       5.2172%

       Plant Allocation Factors
  6          Electric Plant in Service                                                                    (Note B)   Attachment 5                 13,649,112,462
  7          Total Plant In Service                                                                                  (Sum Line 6)                 13,649,112,462

  8          Accumulated Depreciation (Total Electric Plant)                                                         Attachment 5                  5,218,999,715
  9          Total Accumulated Depreciation                                                                          (Line 8)                      5,218,999,715

  10         Net Plant                                                                                               (Line 7 - 9)                  8,430,112,747

  11        Transmission Gross Plant                                                                                 (Line 23 - Line 39)           2,012,492,037
  12   Gross Plant Allocator                                                                                         (Line 11 / 7)                     14.7445%

  13        Transmission Net Plant                                                                                   (Line 33 - Line 39)           1,412,946,779
  14   Net Plant Allocator                                                                                           (Line 13 / 10)                    16.7607%

Plant Calculations

       Plant In Service (Note O)
  15         Transmission Plant In Service                                                                (Note B)   Attachment 5                  1,948,810,364
  16         New Transmission Plant Additions for Current Calendar Year (weighted by months in service)              Attachment 6                     20,069,191
  17         Total Transmission Plant In Service                                                                     (Line 15 + 16)                1,968,879,555

  18         Other Utility Plant                                                                                     Attachment 5                    35,701,349

  19         General & Intangible                                                                                    Attachment 5                  1,050,740,530
  20         Total General                                                                                           (Line19)                      1,050,740,530
  21         Wage & Salary Allocation Factor                                                                         (Line 5)                          5.21720%
  22         General Plant Allocated to Transmission                                                                 (Line 18 + (20 * 21))            90,520,574


  23   TOTAL Plant In Service                                                                                        (Line 17 + 22)                2,059,400,129

       Accumulated Depreciation

  24         Transmission Accumulated Depreciation                                                        (Note B)   Attachment 5                   569,007,097
  25         Accumulated Depreciation for Transmission Plant Additions for Current Rate Year                         Attachment 6                        40,646
  26         Total Transmission Accumulated Depreciation                                                             (Line 24 + Line 25)            569,047,743

  27         Accumulated General Depreciation                                                                        Attachment 5                   144,644,882
  28         Accumulated Intangible Depreciation                                                                     Attachment 5                   439,912,362
  29         Total Accumulated Depreciation                                                                          (Sum Lines 27 to 28)           584,557,244
  30         Wage & Salary Allocation Factor                                                                         (Line 5)                          5.2172%
  31         General Allocated to Transmission                                                                       (Line 29 * 30)                  30,497,515

  32   TOTAL Accumulated Depreciation                                                                                (Line 26 + 31)                 599,545,258

  33   TOTAL Net Property, Plant & Equipment                                                                         (Line 23 - 32)                1,459,854,871
                                                                                                                                                                         Page 2 of 77


Adjustment To Rate Base

      Accumulated Deferred Income Taxes
 34       ADIT net of FASB 106 and 109                                                                                        Attachment 1                            -365,760,158
 35       Accumulated Deferred Income Taxes Allocated To Transmission                                                         (Line 34)                               -365,760,158

      Transmission O&M Reserves
 36        Total Balance Transmission Related Account 242 Reserves                                       Enter Negative       Attachment 5                              -3,917,061

      Prepayments
 37        Prepayments                                                                                      (Note A)          Attachment 5                              6,008,669
 38        Total Prepayments Allocated to Transmission                                                                        (Line 37)                                 6,008,669

 39   Land Held for Future Use                                                                             (Note C)           p214                                     46,908,092

      Materials and Supplies
 40        Undistributed Stores Exp                                                                         (Note A)          p227.6c & 16.c                                    0
 41        Wage & Salary Allocation Factor                                                                                    (Line 5)                                   5.2172%
 42        Total Transmission Allocated                                                                                       (Line 40 * 41)                                    0
 43        Transmission Materials & Supplies                                                                                  p227.8c                                  25,893,267
 44        Total Materials & Supplies Allocated to Transmission                                                               (Line 42 + 43)                           25,893,267

      Cash Working Capital
 45        Operation & Maintenance Expense                                                                                    (Line 73)                                40,173,236
 46        Zero Cash Working Capital                                                                                          Zero                                          0.0%
 47        Total Cash Working Capital Allocated to Transmission                                                               (Line 45 * 46)                                    0

      Network Credits
 48       Outstanding Network Credits                                                                      (Note N)           Attachment 5                                      0
 49          Less Accumulated Depreciation Associated with Facilities with Outstanding Network Credits     (Note N)           Attachment 5                                      0
 50       Net Outstanding Credits                                                                                             (Line 48 - 49)                                    0

 51   TOTAL Adjustment to Rate Base                                                                                       (Line 35 + 36 + 38 + 39 + 44 + 47 - 50 )    -290,867,191

 52   Rate Base                                                                                                               (Line 33 + 51)                         1,168,987,680

O&M

      Transmission O&M
 53        Transmission O&M                                                                                                   p321.112.b                               46,538,921
 54           Less Account 565                                                                                                p321.96.b                                17,660,814
 55        Transmission O&M                                                                                                   (Line 53 - 54)                           28,878,107

      Allocated General Expenses
 56        Total A&G                                                                                                          p323.197.b                              190,368,607
 57           Less PBOP Adjustment                                                                                            Attachment 5                             39,794,895
 58           Less Property Insurance Account 924                                                                             p323.185b                                 5,059,330
 59           Less Regulatory Commission Exp Account 928                                                    (Note E)          p323.189b                                18,592,015
 60           Less General Advertising Exp Account 930.1                                                                      p323.191b                                 3,548,750
 61           Less EPRI Dues                                                                               (Note D)           p352-353                                          0
 62        General Expenses                                                                                                   (Line 56) - Sum (57 to 61)              123,373,617
 63        Wage & Salary Allocation Factor                                                                                    (Line 5)                                   5.2172%
 64        General Expenses Allocated to Transmission                                                                         (Line 62 * 63)                            6,436,647

      Directly Assigned A&G
 65        Regulatory Commission Exp Account 928                                                           (Note G)           Attachment 5                              4,010,502
 66        General Advertising Exp Account 930.1                                                           (Note K)           Attachment 5                                      0
 67        Subtotal - Transmission Related                                                                                    (Line 65 + 66)                            4,010,502

 68        Property Insurance Account 924                                                                                     p323.185b                                 5,059,330
 69        General Advertising Exp Account 930.1                                                            (Note F)          Attatchment 5                                     0
 70        Total                                                                                                              (Line 68 + 69)                            5,059,330
 71        Net Plant Allocation Factor                                                                                        (Line 14)                                 16.7607%
 72        A&G Directly Assigned to Transmission                                                                              (Line 70 * 71)                              847,980

 73        Total Transmission O&M                                                                                             (Line 55 + 64 + 67 + 72)                 40,173,236

Depreciation & Amortization Expense

      Depreciation Expense (Note P)
 74        Transmission Depreciation Expense                                                                                  p336.7f                                  39,174,531
 75        New plant Depreciation Expense                                                                                     Attachment 6                                 97,784
 76        Total Transmission Depreciation Expense                                                                            (Line 74 + Line 75)                      39,272,315

 77        General Depreciation                                                                                               p336.10f                                 27,108,845
 78        Intangible Amortization                                                                          (Note A)          p336.1f                                  45,035,213
 79        Total                                                                                                              (Line 77 + 78)                           72,144,058
 80        Wage & Salary Allocation Factor                                                                                    (Line 5)                                   5.2172%
 81        General Depreciation Allocated to Transmission                                                                     (Line 79 * 80)                            3,763,899

 82   Total Transmission Depreciation & Amortization                                                                          (Line 76 + 81)                           43,036,214
                                                                                                                                Page 3 of 77



Taxes Other than Income

  83   Taxes Other than Income                                                         Attachment 2                           19,720,829

  84   Total Taxes Other than Income                                                   (Line 83)                              19,720,829

Return / Capitalization Calculations

       Long Term Interest
  85        Long Term Interest                                                         p117.62c through 67c                  209,554,771
  86        Long Term Interest                                                         (Line 85)                             209,554,771

  87   Preferred Dividends                                            enter positive   p118.29c                                        0

       Common Stock
  88      Proprietary Capital                                                          p112.16c                             3,824,953,717
  89        Less Preferred Stock                                      enter negative   (Line 97)                                        0
  90        Less Accumulated Other Comprehensive Income Account 219   enter negative   p112.15c                               136,294,557
  91        Less Account 216.1                                        enter negative   p112.12c                                    -7,746
  92      Common Stock                                                                 (Sum Lines 88 to 91)                 3,961,240,528

       Capitalization
  93        Long Term Debt                                                             p112.18c through 23c                 3,396,236,107
  94             Less Loss on Reacquired Debt                         enter negative   p111.81c                               -21,815,952
  95             Plus Gain on Reacquired Debt                         enter positive   p113.61c                                   544,897
  96        Total Long Term Debt                                                       (Sum Lines 93 to 95)                 3,374,965,052
  97        Preferred Stock                                                            p112.3c                                          0
  98        Common Stock                                                               (Line 92)                            3,961,240,528
  99        Total Capitalization                                                       (Sum Lines 96 to 98)                 7,336,205,580

 100         Debt %                                                                    (Line 96 / 99)                               46%
 101         Preferred %                                                               (Line 97 / 99)                                0%
 102         Common %                                                                  (Line 98 / 99)                               54%

 103         Debt Cost                                                                 (Line 86 / 96)                             0.0621
 104         Preferred Cost                                                            (Line 87 / 97)                             0.0000
 105         Common Cost                                                 (Note J)      Fixed                                      0.1075

 106         Weighted Cost of Debt                                                     (Line 100 * 103)                           0.0286
 107         Weighted Cost of Preferred                                                (Line 101 * 104)                           0.0000
 108         Weighted Cost of Common                                                   (Line 102 * 105)                           0.0580
 109   Total Return ( R )                                                              (Sum Lines 106 to 108)                     0.0866

 110   Investment Return = Rate Base * Rate of Return                                  (Line 52 * 109)                       101,245,921

Composite Income Taxes

       Income Tax Rates
 111        FIT=Federal Income Tax Rate                                                                                           35.00%
 112        SIT=State Income Tax Rate or Composite                       (Note I)                                                  6.93%
 113        p                                                                          FIT deductible for SIT                      0.00%
 114        T = 1-{[(1-SIT) * (1-FIT)]/(1-SIT * FIT * p)}                                                                         39.50%
 115        T/ (1-T)                                                                                                              65.30%

       ITC Adjustment                                                    (Note I)
 116        Amortized Investment Tax Credit                           enter negative   p266.8f                                  -108,064
 117        T/(1-T)                                                                    (Line 115)                                65.30%
 118        Net Plant Allocation Factor                                                (Line 14)                               16.7607%
 119        ITC Adjustment Allocated to Transmission                                   (Line 116 * (1 + 117) * 118)              -29,940




 120   Income Tax Component =                                                          [Line 115 * 110 * (1-(106 / 109))]     44,309,987

 121   Total Income Taxes                                                              (Line 119 + 120)                       44,280,047

REVENUE REQUIREMENT

       Summary
 122       Net Property, Plant & Equipment                                             (Line 33)                            1,459,854,871
 123       Adjustment to Rate Base                                                     (Line 51)                             -290,867,191
 124       Rate Base                                                                   (Line 52)                            1,168,987,680

 125         O&M                                                                       (Line 73)                              40,173,236
 126         Depreciation & Amortization                                               (Line 82)                              43,036,214
 127         Taxes Other than Income                                                   (Line 84)                              19,720,829
 128         Investment Return                                                         (Line 110)                            101,245,921
 129         Income Taxes                                                              (Line 121)                             44,280,047

 130         Gross Revenue Requirement                                                 (Sum Lines 125 to 129)               248,456,247
                                                                                                                                                      Page 4 of 77



      Adjustment to Remove Revenue Requirements Associated with Excluded Transmission Facilities
131        Transmission Plant In Service                                                                      (Line 15)                           1,948,810,364
132        Excluded Transmission Facilities                                                        (Note M)   Attachment 5                           66,849,939
133        Included Transmission Facilities                                                                   (Line 131 - 132)                    1,881,960,425
134        Inclusion Ratio                                                                                    (Line 133 / 131)                          96.57%
135        Gross Revenue Requirement                                                                          (Line 130)                            248,456,247
136        Adjusted Gross Revenue Requirement                                                                 (Line 134 * 135)                      239,933,466

      Revenue Credits & Interest on Network Credits
137       Revenue Credits                                                                                     Attachment 3                          13,114,198
138       Interest on Network Credits                                                              (Note N)   Attachment 5                                 -

139        Net Revenue Requirement                                                                            (Line 136 - 137 + 138)              226,819,267

      Net Plant Carrying Charge
140        Net Revenue Requirement                                                                            (Line 139)                            226,819,267
141        Net Transmission Plant                                                                             (Line 15 - 24)                      1,379,803,267
142        Net Plant Carrying Charge                                                                          (Line 140 / 141)                         16.4385%
143        Net Plant Carrying Charge without Depreciation                                                     (Line 140 - 74) / 141                    13.5994%
144        Net Plant Carrying Charge without Depreciation, Return, nor Income Taxes                           (Line 140 - 74 - 110 - 121) / 141         3.0525%

      Net Plant Carrying Charge Calculation per 100 Basis Point increase in ROE
145        Net Revenue Requirement Less Return and Taxes                                                      (Line 139 - 128 - 129)                 81,293,299
146        Increased Return and Taxes                                                                         Attachment 4                          155,959,866
147        Net Revenue Requirement per 100 Basis Point increase in ROE                                        (Line 145 + 146)                      237,253,165
148        Net Transmission Plant                                                                             (Line 15 - 24)                      1,379,803,267
149        Net Plant Carrying Charge per 100 Basis Point increase in ROE                                      (Line 147 / 148)                         17.1947%
150        Net Plant Carrying Charge per 100 Basis Point in ROE without Depreciation                          (Line 147 - 74) / 148                    14.3556%

151        Net Revenue Requirement                                                                            (Line 139)                           226,819,267
152        True-up amount                                                                                     Attachment 6                           7,690,214
153        Plus any increased ROE calculated on Attachment 7                                                  Attachment 7                                 -
154        Facility Credits under Section 30.9 of the APS OATT                                                Attachment 5                                 -
155        Net Adjusted Revenue Requirement                                                                   (Line 151 - 152 + 154)               234,509,481

      Annual Point-to-Point Transmission Rate
156       Average of the 4 Summer CP                                                               (Note L)   Network Transmission Peak Report       7,955,691
157       Annual Point-to-Point Transmission Rate                                                             (Line 155 / 156)                           29.48

158        Average of the 8 Non-Summer CP                                                          (Note L)   Network Transmission Peak Report       5,496,997
159        Implied Non-Summer Revenue Requirement                                                             ((Line 157/12)*8* Line 158)          108,023,120
                                                                                                                                                                                       Page 5 of 77


 160        Implied Summer Revenue Requirement                                                                                                (Line 139 - Line 159)                  118,796,147
 161        Implied Annualized Summer Point-to-Point Transmission Rate                                                                        ((Line 155- line 159/Line 156/4)*12)        47.70

       Retail Transmission Rates
 162         Residential (kWh)                                                                                                                Rate Design Worksheet                     0.00838
 163         Gen Serv < 3MW Without Demand Meters -Includes All Customers 20 kW and less (kWh)                                                Rate Design Worksheet                     0.00586
 164         Gen Serv < 3MW (kW)                                                                                                              Rate Design Worksheet                       2.108
 165         Gen Serv > 3MW (kW)                                                                                                              Rate Design Worksheet                       2.036

       Notes
        A Electric portion only
        B Exclude Construction Work In Progress expensed as O&M (rather than amortized). New Transmission plant
            that is expected to be placed in service in the current calendar year weighted by number of months it is expected to be in-service. New Transmission plant expected
            to be placed in service in the current calendar year that is not included in the Transmission Plan must be separately detailed on Attachment 5.
            For the Reconciliation, new transmission plant that was actually placed in service weighted by the number of months it was actually in service
        C Transmission Portion Only
        D All EPRI Annual Membership Dues
        E All Regulatory Commission Expenses
        F Safety related advertising included in Account 930.1
        G Regulatory Commission Expenses directly related to transmission service, RTO filings, or transmission siting itemized in Form 1 at 351.h.
         I The currently effective income tax rate, where FIT is the Federal income tax rate; SIT is the State income tax rate, and p =
              "the percentage of federal income tax deductible for state income taxes". If the utility includes taxes in more than one state, it must explain in
              Attachment 5 the name of each state and how the blended or composite SIT was developed. Furthermore, a utility that
              elected to use amortization of tax credits against taxable income, rather than book tax credits to Account No. 255 and reduce
              rate base, must reduce its income tax expense by the amount of the Amortized Investment Tax Credit (Form 1, 266.8.f)
              multiplied by (1/1-T). A utility must not include tax credits as a reduction to rate base and as an amortization against taxable income.
              If the tax rates change during a calendar year, an average tax rate will be used - calculated based on the number of days each was effective in the calendar year.
        J ROE of 10.75%
        K Education and outreach expenses relating to transmission, for example siting or billing
        L Based on APS Network Transmission Peak Report
        M Amount of transmission plant excluded from rates per Attachment 5.
        N Outstanding Network Credits is the balance of Network Facilities Upgrades Credits due Transmission Customers who have made lump-sum payments
              (net of accumulated depreciation) towards the construction of Network Transmission Facilities consistent with Paragraph 657 of Order 2003-A.
              Interest on the Network Credits as booked each year is added to the revenue requirement to make the Transmisison Owner whole on Line 138.
        O AFUDC shall not be applied to the portion of a Network Upgrade for which the customer has provided the funds.
        P Changes in depreciation or amortization rates must be filed with the Commission, as well as any new depreciation or amortization rates.




END
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159,541,623




     2.4564
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                154
                                                                                                                                                                                                                                                                                     Page 55 of 77




                                                                                                                          Arizona Public Service Company

                                                                                                       Attachment 1 - Accumulated Deferred Income Taxes (ADIT) Worksheet



                                                                                                      Transmission           Plant                Labor                 Total
                                                                                                         Related            Related              Related                ADIT


               ADIT- 282                                                                                             0     (2,331,501,543)                  0        (2,331,501,543)
               ADIT-283                                                                                    (18,045,062)           284,634        (292,947,863)         (310,708,291)
               ADIT-190                                                                                              0                  0         216,488,262           216,488,262
               Subtotal                                                                                    (18,045,062)    (2,331,216,909)        (76,459,601)       (2,425,721,572)
               Wages & Salary Allocator                                                                                                               5.2172%
               Gross Plant Allocator                                                                                           14.7445%
               ADIT                                                                                        (18,045,062)     (343,726,047)          (3,989,050)         (365,760,158)



In filling out this attachment, a full and complete description of each item and justification for the allocation to Columns B-E and each separate ADIT item will be listed, dissimilar items
with amounts exceeding $100,000 will be listed separately.


      A                                                                              B                      C                   D                    E                     F                                                                   G
                                                                                    Total               Gas, Prod             Only
ADIT-190                                                                                                Or Other          Transmission            Plant                 Labor
                                                                                                         Related             Related             Related               Related                                                           Justification

Deferred Credits - Injury Reserve                                                    1,212,092                1,212,092                                                                Injury Reserve is related to injuries and damages liability to third party in all functions
Deferred Credits - SFAS 112                                                          3,930,947                                                                            3,930,947    Post Employment Benefits - relates to employees in all functions
Deferred Credits - Legal Reserves                                                    1,840,358               1,840,358                                                                 Production related
Deferred Credits - Palo Verde Rent                                                   9,378,317               9,378,317                                                                 Production related
Deferred Credits - Coal Reclaimation                                                46,319,389              46,319,389                                                                 Production related
Deferred Credits - Unamortized Gain on PV Sale/Leaseback                            11,844,278              11,844,278                                                                 Production related
Deferred Credits - Def Comp                                                         12,260,203              12,260,203                                                                 Not a component of rate base so deferred taxes are not a component of rate base
Deferred Credits - Medical Reserve                                                   3,350,079               3,350,079                                                                 Not a component of rate base so deferred taxes are not a component of rate base
Deferred Credits - Option II                                                         4,639,029                                                                            4,639,029    Relates to employees in all functions
Deferred Credits - Retention Units                                                   2,919,961                                                                            2,919,961    Relates to employees in all functions
Reg Liab - ARO                                                                      72,730,308              72,730,308                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Reg Liab - PacifiCorp                                                                7,111,261               7,111,261                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Reg Liab - Gain on Sale of Property                                                    144,645                 144,645                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Reg Liab - PV ISFS                                                                  15,143,041              15,143,041                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Reg Liab - Power Supply Adjustor                                                    23,088,817              23,088,817                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Reg Liab - Unamortized Gain on Reacquired Debt                                         215,273                 215,273                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Reg Liab - Deferred ITC                                                                641,602                 641,602                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Reg Liab - Sundance Maintenance                                                      2,225,114               2,225,114                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Reg Liability - Amonix                                                               2,434,394               2,434,394                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Reg Liab-Renewable Energy Standard                                                  18,748,848              18,748,848                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Reg Liab-Star Center Patent Rights                                                     444,609                 444,609                                                                 Pursuant to state retail regulatory order (Regulatory Liability)
Pension and other Postretirement Benefits                                          303,054,916                                                                          303,054,916    Relates to employees in all functions
Low Income Bill Assistance                                                           1,580,280               1,580,280                                                                 Pursuant to state retail regulatory order
Mark to market                                                                     150,040,065             150,040,065                                                                 Production related
Suncor Deferred Tax Gain                                                               (32,029)                (32,029)                                                                Not a component of rate base so deferred taxes are not a component of rate base
Sales/Use tax and Other Tax Accruals                                                (6,046,245)             (6,046,245)                                                                Not a component of rate base so deferred taxes are not a component of rate base
Interest on Tax Reserve                                                                289,697                 289,697                                                                 Not a component of rate base so deferred taxes are not a component of rate base
Severance Reserve                                                                      972,087                                                                              972,087    Relates to employees in all functions
Workers' Compensation                                                                3,022,700                                                                            3,022,700    Relates to employees in all functions
Vehicle Capital Leases                                                                 507,911                 507,911                                                                 Not a component of rate base so deferred taxes are not a component of rate base
Renewable Energy Incentives                                                         37,327,182              37,327,182                                                                 Production related

Subtotal - p234                                                                    731,339,129             412,799,489                   0                    0         318,539,640
Less FASB 109 Above if not separately removed                                                0                       0                   0                    0                   0
Less FASB 106 Above if not separately removed                                      102,051,378                       0                   0                    0         102,051,378
Total                                                                              629,287,751             412,799,489                   0                    0         216,488,262

               Instructions for Account 190:
               1. ADIT items related only to Non-Electric Operations (e.g.,
               Gas, Water, Sewer) or Production are directly assigned to
               Column C
               2. ADIT items related only to Transmission are directly assigned to Column D
               3. ADIT items related to Plant and not in Columns C & D are included in Column E
               4. ADIT items related to labor and not in Columns C & D are included in Column F
               5. Deferred income taxes arise when items are included in
               taxable income in different periods than they are included in
               rates, therefore if the item giving rise to the ADIT is not
               included in the formula, the associated ADIT amount shall
               be excluded

               6. Re: Form 1-F filer: Sum of subtotals for Accounts 282 and 283 should tie to Form No. 1-F, p.113.57.c
                                                                                                                                                                                                                                               Page 56 of 77




Attachment 1 - Accumulated Deferred Income Taxes (ADIT) Worksheet

                                          A                                        B                      C                    D                 E                F                                                                 G
                                                                                  Total               Gas, Prod              Only
             ADIT- 282                                                                                Or Other           Transmission          Plant            Labor
                                                                                                       Related              Related           Related          Related                                                       Justification
Net Plant Book/Tax Differences                                                (2,331,501,543)                                               (2,331,501,543)                    Accelerated depreciation functionalized as plant related
Reg Liab - Removal Costs                                                         149,717,584             149,717,584                                                           Pursuant to State retail Regulatory Order (Regulatory Liab)

Subtotal - p275 (Form 1-F filer: see note 6 below)                            (2,181,783,959)            149,717,584                    0   (2,331,501,543)               0
Less FASB 109 Above if not separately removed                                              0                                                             0
Less FASB 106 Above if not separately removed                                              0
Total                                                                         (2,181,783,959)            149,717,584                    0   (2,331,501,543)               0

             Instructions for Account 282:
             1. ADIT items related only to Non-Electric Operations (e.g.,
             Gas, Water, Sewer) or Production are directly assigned to
             Column C
             2. ADIT items related only to Transmission are directly assigned to Column D
             3. ADIT items related to Plant and not in Columns C & D are included in Column E
             4. ADIT items related to labor and not in Columns C & D are included in Column F
             5. Deferred income taxes arise when items are included in
             taxable income in different periods than they are included in
             rates, therefore if the item giving rise to the ADIT is not
             included in the formula, the associated ADIT amount shall
             be excluded

             6. Re: Form 1-F filer: Sum of subtotals for Accounts 282 and 283 should tie to Form No. 1-F, p.113.57.c




Attachment 1 - Accumulated Deferred Income Taxes (ADIT) Worksheet

                                          A                                        B                      C                    D                 E                F                                                                 G
                                                                                  Total               Gas, Prod              Only
             ADIT-283                                                                                 Or Other           Transmission         Plant             Labor
                                                                                                       Related              Related          Related           Related                                                         Justification
Reg Asset - Transmission Vegitation Management                                   (18,045,062)                                (18,045,062)                                      Pursuant to federal regulatory order (Regulatory Asset)
Reg Asset - AFUDC                                                                (28,275,576)            (28,275,576)                                                          Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - Mead Phx Line                                                         (5,148,792)             (5,148,792)                                                          Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - Decontamination                                                         (127,131)               (127,131)                                                          Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - Unamortized loss on Reacquired Debt                                   (8,618,830)             (8,618,830)                                                          Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - Power Supply Adjustor MTM                                            (30,276,195)            (30,276,195)                                                          Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - Coal Reclaimation                                                    (15,120,538)            (15,120,538)                                                          Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - Pension and Other Postretirement benefits                           (264,313,238)                                                                  (264,313,238)   Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - Option II                                                            (12,628,230)                                                                   (12,628,230)   Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - Demand Side Management                                                (7,016,796)              (7,016,796)                                                         Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - SFAS 109                                                              (1,142,370)              (1,142,370)                                                         Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - Demand Response                                                          (46,872)                 (46,872)                                                         Pursuant to state retail regulatory order (Regulatory Asset)
Reg Asset - OPEB Subsidy PPACA                                                    (9,182,905)                                                                    (9,182,905)   Pursuant to state retail regulatory order (Regulatory Asset)
Bad Debt Allowance                                                                 3,019,203               3,019,203                                                           Retail related
Mark to market                                                                   (55,433,883)            (55,433,883)                                                          Pursuant to state retail regulatory order
Deferred Debit - Option II                                                        (6,823,490)                                                                    (6,823,490)   Relates to employees in all functions
Prepaids                                                                          (1,796,310)              (1,796,310)                                                         Production and distribution related
NOL Carryforward                                                                     284,634                                                         284,634                   Plant related, driven by IRS bonus depreciation
Other Current Assets                                                                     310                       310                                                         Production and distribution related

Subtotal - p277 (Form 1-F filer: see note 6, below)                             (460,692,071)           (149,983,780)        (18,045,062)            284,634   (292,947,863)
Less FASB 109 Above if not separately removed                                    (29,417,946)            (29,417,946)                -                   -              -
Less FASB 106 Above if not separately removed                                            -                       -                   -                   -              -
Total                                                                           (431,274,125)           (120,565,834)        (18,045,062)            284,634   (292,947,863)

             Instructions for Account 283:
             1. ADIT items related only to Non-Electric Operations (e.g.,
             Gas, Water, Sewer) or Production are directly assigned to
             Column C
             2. ADIT items related only to Transmission are directly assigned to Column D
             3. ADIT items related to Plant and not in Columns C & D are included in Column E
             4. ADIT items related to labor and not in Columns C & D are included in Column F
             5. Deferred income taxes arise when items are included in
             taxable income in different periods than they are included in
             rates, therefore if the item giving rise to the ADIT is not
             included in the formula, the associated ADIT amount shall
             be excluded

             6. Re: Form 1-F filer: Sum of subtotals for Accounts 282 and 283 should tie to Form No. 1-F, p.113.57.c
                                                                                                                                       Page 57 of 77




Attachment 1- Accumulated Deferred Income Taxes (ADIT) Worksheet




ADITC-255

                                                                   Balance       Amortization

1           Rate Base Treatment
2           Balance to line 41 of Appendix A                                                          One or the other but not both.

3           Amortization
4           Amortization to line 116 of Appendix A                           -            (108,064)

5           Total                                                            -            (108,064)

6           Total Form No. 1 (p 266 & 267)                                   -            (108,064)

7           Difference /1                                                    -                  -

            /1 Difference must be zero
                                                                                                                                                      Page 58 of 77




                                                      Arizona Public Service Company
                                             Attachment 2 - Taxes Other Than Income Worksheet



                                                                                                  Page 263                            Allocated
Other Taxes                                                                                        Col (i)          Allocator          Amount



    Plant Related                                                                                             Gross Plant Allocator

       1   Transmission Personal Property Tax (directly assigned to Transmission)             $    18,370,450        100%          $ 18,370,450
       2   Capital Stock Tax                                                                                       14.7445%        $           -
       3   Gross Premium (insurance) Tax                                                                           14.7445%        $           -
       4   PURTA                                                                                                   14.7445%        $           -
       5   Corp License                                                                                            14.7445%        $           -
                                                                                                                   14.7445%        $           -
    Total Plant Related                                                                            18,370,450                         18,370,450


    Labor Related                                                                                         Wages & Salary Allocator


       6 Federal FICA & Unemployment & state unemployment                                          25,883,224




    Total Labor Related                                                                            25,883,224       5.2172%              1,350,379


    Other Included                                                                                            Gross Plant Allocator

       7 Miscellaneous                                                                                        0



    Total Other Included                                                                                      0    14.7445%                       0

    Total Included                                                                                                                      19,720,829



           Currently Excluded

       8   Use & Sales Tax                                                                                  0
       9   Palo Verde Sales/Leaseback Sales Tax                                                        83,973
      10   Other Sales & Use Tax                                                                            0
      11   Other Personal Property Tax (excluded)                                                 116,013,074
      12
      13
      14
      15
      16
      17
      18
      19
      20

      21 Total "Other" Taxes (included on p. 263)                                                 160,350,721

      22 Total "Taxes Other Than Income Taxes" - acct 408.10 (p. 114.14)                          160,350,721

      23 Difference                                                                                       -

    Criteria for Allocation:
    A      Other taxes that are incurred through ownership of plant including transmission plant will be allocated based on the Gross Plant
           Allocator. If the taxes are 100% recovered at retail they will not be included
    B      Other taxes that are incurred through ownership of only general or intangible plant will be allocated based on the Wages and Salary
           Allocator. If the taxes are 100% recovered at retail they will not be included
    C      Other taxes that are assessed based on labor will be allocated based on the Wages and Salary Allocator
    D      Other taxes except as provided for in A, B and C above, that are incurred and (1) are not fully recovered at retail or (2) are
           directly or indirectly related to transmission service will be allocated based on the Gross Plant Allocator; provided, however, that
           overheads shall be treated as in footnote B above
    E      Excludes prior period adjustments in the first year of the formula's operation and reconciliation for the first year
                                                                                                                                                   Page 59 of 77




                                                   Arizona Public Service Company
                                                Attachment 3 - Revenue Credit Workpaper


    Account 454 - Rent from Electric Property
  1 Rent from Electric Property - Transmission Related (Note 3)                                                                      3,752,651
  2 Total Rent Revenues                                                                                     (Sum Lines 1)            3,752,651

      Account 456 - Other Electric Revenues (Note 1)

  3 Scheduling, System Control & Dispatch (Ancillary Service)                                                                   $    2,036,576
  4 Net revenues associated with Network Integration Transmission Service (NITS) for which the
    load is not included in the divisor (Note 4)
  5 Point to Point Service revenues for which the load is not included in the divisor received by Transmission Owner (Note 4)        6,927,241
  6 Transitional Revenue Neutrality (Note 1)
  7 Transitional Market Expansion (Note 1)
  8 Professional Services (Note 3)                                                                                                        -
  9 Revenues from Directly Assigned Transmission Facility Charges (Note 2)                                                            185,335
 10 Rent or Attachment Fees associated with Transmission Facilities (Note 3)                                                          702,186

 11 Gross Revenue Credits                                                                                   (Sum Lines 2-10)        13,603,989
 12 Line 17g                                                                                                                          (489,791)
 13 Total Revenue Credits                                                                                                           13,114,198




      Revenue Adjustment to determine Revenue Credit
 14
       Note 1: All revenues related to transmission that are received as a transmission owner (i.e.,
      not received as a LSE), for which the cost of the service is recovered under this formula,
      except as specifically provided for elsewhere in this Attachment or elsewhere in the formula will
      be included as a revenue credit or included in the peak on line 171 of Appendix A.

 15 Note 2: If the costs associated with the Directly Assigned Transmission Facility Charges are
    included in the Rates, the associated revenues are included in the Rates. If the costs
    associated with the Directly Assigned Transmission Facility Charges are not included in the
    Rates, the associated revenues are not included in the Rates.

 16
      Note 3: Ratemaking treatment for the following specified secondary uses of transmission
      assets: (1) right-of-way leases and leases for space on transmission facilities for
      telecommunications; (2) transmission tower licenses for wireless antennas; (3) right-of-way
      property leases for farming, grazing or nurseries; (4) licenses of intellectual property (including
      a portable oil degasification process and scheduling software); and (5) transmission
      maintenance and consulting services (including energized circuit maintenance, high-voltage
      substation maintenance, safety training, transformer oil testing, and circuit breaker testing) to
      other utilities and large customers (collectively, products). Company will retain 50% of net
      revenues consistent with Pacific Gas and Electric Company, 90 FERC ¶ 61,314. Note: in order
      to use lines 17a - 17g, the utility must track in separate subaccounts the revenues and costs
      associated with each secondary use (except for the cost of the associated income taxes).
17a Revenues included in lines 1-11 which are subject to 50/50 sharing.                                                                702,186
17b Costs associated with revenues in line 17a                                                                                         277,395
17c Net Revenues (17a - 17b)                                                                                                           424,791
17d 50% Share of Net Revenues (17c / 2)                                                                                                212,395
17e Costs associated with revenues in line 17a that are included in FERC accounts recovered
    through the formula times the allocator used to functionalize the amounts in the FERC account                                              -
    to the transmission service at issue.
17f Net Revenue Credit (17d + 17e)                                                                                                     212,395
17g Line 17f less line 17a                                                                                                            (489,791)
 18 Note 4: If the facilities associated with the revenues are not included in the formula, the
    revenue is shown here but not included in the total above and is explained in the Cost Support;
    for example revenues associated with distribution facilities.                                                                          -

 19 Amount offset in line 4 above

 20 Total Account 454 and 456                                                                                                       13,603,989
                                                                                                                                               Page 60 of 77




                                                            Arizona Public Service Company
                                               Attachment 4 - Calculation of 100 Basis Point Increase in ROE




   A        100 Basis Point increase in ROE and Income Taxes                                       Line 12 + Line 23                       155,959,866

   B        100 Basis Point increase in ROE                                                                                                      1.00%

Return Calculation
   1       Rate Base                                                                               Appendix A, Line 52                    1,168,987,680

   2        Debt %                                                                                 Appendix A, Line 100                          46.0%
   3        Preferred %                                                                            Appendix A, Line 101                           0.0%
   4        Common %                                                                               Appendix A, Line 102                          54.0%

   5        Debt Cost                                                                              Appendix A, Line 103                          6.21%
   6        Preferred Cost                                                                         Appendix A, Line 104                          0.00%
   7        Common Cost                                          Appendix A % plus 100 Basis Pts   Appendix A, Line 105 + 1%                    11.75%

    8      Weighted Cost of Debt                                                                   Appendix A, Line 106                         0.0286
    9      Weighted Cost of Preferred                                                              Appendix A, Line 107                             -
   10      Weighted Cost of Common                                                                 Line 4 * Line 7                               0.0634
   11    Total Return ( R )                                                                        Sum Lines 8 to 10                             0.0920

   12    Investment Return = Rate Base * Rate of Return                                            Line 11 * Line 1                         107,557,960

Composite Income Taxes
       Income Tax Rates
  13       FIT=Federal Income Tax Rate                                                             Appendix A, Line 111                         35.00%
  14       SIT=State Income Tax Rate or Composite                                                  Appendix A, Line 112                          6.93%
  15       p (percent of federal income tax deductible for state purposes)                         Appendix A, Line 113                          0.00%
  16       T =1 - {[(1 - SIT) * (1 - FIT)] / (1 - SIT * FIT * p)} =                                Appendix A, Line 114                         39.50%
  17       T/ (1-T)                                                                                Appendix A, Line 115                         65.30%

         ITC Adjustment
   18       Amortized Investment Tax Credit                                                        Appendix A, Line 116                       (108,064)
   19       1/(1-T)                                                                                Appendix A, Line 117                       65.3016%
   20       Net Plant Allocation Factor                                                            Appendix A, Line 118                       16.7607%
   21       ITC Adjustment Allocated to Transmission                                               Appendix A, Line 119                         -29,940

   22    Income Tax Component = CIT=(T/1-T) * Investment Return * (1-(WCLTD/R)) =                  Line 17*Line 12*(1-(Line 8/Line 11))     48,431,846

   23    Total Income Taxes                                                                        Line 21 + 22"                            48,401,906
                                                                                                                                                                            Page 61 of 77




                                                                                                        Arizona Public Service Company
                                                                                                              Attachment 5 - Cost Support




Plant in Service Worksheet
                                 Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                                                       Details
           Calculation of Transmission Plant In Service                       Source                                   Balance For True up Balance for Estimate
           December                                                           p206.58.b                        2009         1,752,744,296
           January                                                            company records                  2010         1,752,840,850
           February                                                           company records                  2010         1,755,315,960
           March                                                              company records                  2010         1,767,602,598
           April                                                              company records                  2010         1,771,280,303
           May                                                                company records                  2010         1,802,406,578
           June                                                               company records                  2010         1,834,675,064
           July                                                               company records                  2010         1,837,603,573
           August                                                             company records                  2010         1,836,809,295
           September                                                          company records                  2010         1,856,607,971
           October                                                            company records                  2010         1,860,190,082
           November                                                           company records                  2010         1,922,752,173
           December                                                           p207.58.g                        2010         1,948,810,364      1,948,810,364
           Transmission Plant In Service                                                                                    1,823,049,162      1,948,810,364

           Calculation of Distribution Plant In Service                       Source
           December                                                           p206.75.b                        2009         4,569,279,973
           January                                                            company records                  2010         4,527,570,042
           February                                                           company records                  2010         4,542,631,315
           March                                                              company records                  2010         4,553,158,673
           April                                                              company records                  2010         4,563,959,599
           May                                                                company records                  2010         4,576,865,556
           June                                                               company records                  2010         4,598,141,536
           July                                                               company records                  2010         4,610,537,783
           August                                                             company records                  2010         4,623,179,834
           September                                                          company records                  2010         4,639,839,619
           October                                                            company records                  2010         4,645,814,811
           November                                                           company records                  2010         4,653,808,615
           December                                                           p207.75.g                        2010         4,662,413,930      4,662,413,930
           Distribution Plant In Service                                                                                    4,597,477,022      4,662,413,930

           Calculation of Intangible Plant In Service                         Source
           December                                                           p204.5.b                         2009           482,726,399
           December                                                           p205.5.g                         2010           526,217,169        526,217,169
           Intangible Plant In Service                                                                                        504,471,784        526,217,169

           Calculation of General Plant In Service                            Source
           December                                                           p206.96.b                        2009           496,439,558
           December                                                           p207.96.g                        2010           524,523,361        524,523,361
           General Plant In Service                                                                                           510,481,460        524,523,361

           Calculation of Production Plant In Service                         Source
           December                                                           p204.46b                         2009         5,858,899,140
           January                                                            company records                  2010         5,856,937,765
           February                                                           company records                  2010         5,857,570,348
           March                                                              company records                  2010         5,859,912,340
           April                                                              company records                  2010         5,871,370,778
           May                                                                company records                  2010         5,886,776,042
           June                                                               company records                  2010         5,893,790,202
           July                                                               company records                  2010         5,900,442,186
           August                                                             company records                  2010         5,904,990,270
           September                                                          company records                  2010         5,904,011,135
           October                                                            company records                  2010         5,903,898,155
           November                                                           company records                  2010         5,994,105,745
           December                                                           p205.46.g                        2010         5,987,147,638      5,987,147,638
           Production Plant In Service                                                                                      5,898,450,134      5,987,147,638


           Total Plant In Service                                             Sum of averages above                         13,333,929,562    13,649,112,462
                                                                                                                                                                         Page 62 of 77




Accumulated Depreciation Worksheet
                                Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                                                     Details
          Calculation of Transmission Accumulated Depreciation               Source                                 Balance For True up Balance for Estimate
          December                                                           Prior year p219.25              2009          531,264,395
          January                                                            company records                 2010          535,121,194
          February                                                           company records                 2010          538,059,967
          March                                                              company records                 2010          540,572,772
          April                                                              company records                 2010          543,414,283
          May                                                                company records                 2010          545,685,491
          June                                                               company records                 2010          548,643,517
          July                                                               company records                 2010          549,464,057
          August                                                             company records                 2010          552,482,986
          September                                                          company records                 2010          564,260,232
          October                                                            company records                 2010          567,551,893
          November                                                           company records                 2010          570,815,809
          December                                                           p219.25                         2010          569,007,097       569,007,097
          Transmission Accumulated Depreciation                                                                            550,487,976       569,007,097

            Calculation of Distribution Accumulated Depreciation              Source
            December                                                          Prior year p219.26             2009        1,234,251,561
            January                                                           company records                2010        1,183,022,585
            February                                                          company records                2010        1,184,634,601
            March                                                             company records                2010        1,188,991,328
            April                                                             company records                2010        1,191,390,141
            May                                                               company records                2010        1,193,867,089
            June                                                              company records                2010        1,199,037,236
            July                                                              company records                2010        1,203,257,426
            August                                                            company records                2010        1,207,238,282
            September                                                         company records                2010        1,202,157,817
            October                                                           company records                2010        1,206,710,626
            November                                                          company records                2010        1,210,288,719
            December                                                          p219.26                        2010        1,216,775,273      1,216,775,273
            Distribution Accumulated Depreciation                                                                        1,201,663,283      1,216,775,273

            Calculation of Intangible Accumulated Depreciation                Source
            December                                                          Prior year p200.21.c           2009          358,402,704
            December                                                          p200.21c                       2010          439,912,362        439,912,362
            Accumulated Intangible Depreciation                                                                            399,157,533        439,912,362

            Calculation of General Accumulated Depreciation                   Source
            December                                                          Prior year p219.28             2009          183,917,307
            December                                                          p219.28                        2010          144,644,882        144,644,882
            Accumulated General Depreciation                                                                               164,281,095        144,644,882

            Calculation of Production Accumulated Depreciation                Source
            December                                                          Prior year p219.20 thru 219.24
                                                                                                           2009          2,697,750,164
            January                                                           company records                2010        2,706,873,191
            February                                                          company records                2010        2,721,714,678
            March                                                             company records                2010        2,735,560,434
            April                                                             company records                2010        2,749,597,752
            May                                                               company records                2010        2,755,661,879
            June                                                              company records                2010        2,769,711,424
            July                                                              company records                2010        2,783,607,648
            August                                                            company records                2010        2,797,823,782
            September                                                         company records                2010        2,811,567,027
            October                                                           company records                2010        2,825,796,915
            November                                                          company records                2010        2,861,065,988
            December                                                          p219.20 thru 219.24            2010        2,848,660,101      2,848,660,101
            Production Accumulated Depreciation                                                                          2,854,863,045      2,848,660,101


            Total Accumulated Depreciation                                    Sum of averages above                       5,170,452,932      5,218,999,715
                                                                                                                                                                                                                          Page 63 of 77




Electric / Non-electric Cost Support
                                 Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                               Form 1 Amount     Electric Portion   Non-electric Portion   Details
        Plant Allocation Factors
             Accumulated Intangible Depreciation                                                                          p200.21.c        439,912,362        439,912,362               0
       Materials and Supplies
            Undistributed Stores Exp                                                                                p227.6c & 15.c              0                  0                    0
       Depreciation Expense
            Intangible Amortization                                                                                 p336.1d&e               45,035,213        45,035,213                0

Transmission / Non-transmission Cost Support

                                                                                                                                                                               End of Year for
                                                                                                                                                                               Est. Average for
                                  Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                              Beg of year        End of Year             Final                      Details
  39         Plant Held for Future Use                                                                  p214        Total                    70,891,233        55,361,692            63,126,463
                                                                                                                    Non-transmission
                                                                                                                    Related                    8,508,521         8,453,600
                                                                                                                    Transmission
                                                                                                                    Related                   62,382,712        46,908,092            54,645,402


PBOPs Cost Support

                                 Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                              Form 1 Amount         PBOBs                All other                   Details
  57   Allocated General Expenses
            Account 926 (2006)                                                                                                                 77,941,202        12,427,757           65,513,445 Base year
            Account 926 (Current Year)                                                                              p323.187b                 92,576,044        52,222,652            40,353,392 Current Year
            Change in PBOP Expense                                                                                                                              39,794,895



EPRI Dues Cost Support
                               Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                                Form 1 Amount       EPRI Dues                                          Details
       Allocated General Expenses                                                                                                             A&G
  61          Less EPRI Dues                                                                                        p352-353                   3,247,280           0

Regulatory Expense Related to Transmission Cost Support
                                                                                                                                                            Transmission       Non-transmission
                                Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                               Form 1 Amount         Related              Related                     Details
       Directly Assigned A&G
  65        Regulatory Commission Exp Account 928                                                                   p350.1 thru 350.21        18,592,015      4,010,502            14,581,513

Safety Related Advertising Cost Support
                                                                                                                                                                                  Non-safety
                                       Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                        Form 1 Amount      Safety Related         Related                      Details
       Directly Assigned A&G
  69        General Advertising Exp Account 930.1                                                                   p323.191.b                 3,548,750                   -                    -                None
                                                                                                                                                                                                                                                                   Page 64 of 77




MultiState Workpaper
                                   Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                                                 State 1         State 2          State 3            State 4            State 5           Composite
       Income Tax Rates
                                                                                                                                                                AZ              NM               CA                  TX                UT
 112         SIT=State Income Tax Rate or Composite                                                                                                           6.968%          7.600%           8.840%              0.00%             5.00%                6.93%

Education and Out Reach Cost Support
                                                                                                                                                                            Education &
                                 Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                                                Form 1 Amount     Outreach           Other                                     Details
       Directly Assigned A&G
  66        General Advertising Exp Account 930.1                                                                                   p323.191.b                  3,548,750        0                3,548,750                                None

Excluded Plant Cost Support
                                                                                                                                                             Excluded
                                                                                                                                                           Transmission
                               Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                                                    Facilities                                  Description of the Facilities
       Adjustment to Remove Revenue Requirements Associated with Excluded Transmission Facilities
 132       Excluded Transmission Facilities                                                                                                                    66,849,939                           General Description of the Facilities

             Instructions:                                                                                                                                    Enter $                                                None
        1    Remove all investment below 69 kV facilities, including the investment allocated to distribution of a dual function substation, generator,
             interconnection and local and direct assigned facilities for which separate costs are charged and step-up generation substation included in
             transmission plant in service.
                                                                                                                                                               66,849,939                                     Put discription here
        2    If unable to determine the investment below 69kV in a substation with investment of 69 kV and higher as well as below 69 kV,                       Or
             the following formula will be used:                                            Example                                                           Enter $
         A   Total investment in substation                                                         1,000,000
         B   Identifiable investment in Transmission (provide workpapers)                             500,000
         C   Identifiable investment in Distribution (provide workpapers)                             400,000
         D   Amount to be excluded (A x (C / (B + C)))                                                444,444
                                                                                                                                                                                                                              Add more lines if necessary

Transmission Related Account 242 Reserves


                                                                                                                                                                                           End of Year for
                                                                                                                                                                                           Est. Average for                       Trans
                                   Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                                               Beg of year     End of Year          Final           Allocation      Related            Details
  36   Transmission Related Account 242 Reserves (exclude current year environmental site related reserves)                                                                   Enter $
             Directly Assignable to Transmission
             Total                                                                                              (A) Total                                     115,354,162    123,919,384       119,636,773



             Labor Related, or General plant related
                                                                                    Vacation Accrual - Old Plan                                                 6,390,701      5,798,978          6,094,840
                                                                                    Workmen's Compensation Liability                                            7,603,655      3,481,333          5,542,494
                                                                                    Vacation Accrual                                                            4,756,641      3,603,166          4,179,904
                                                                                    Vacation Accrual - Participants                                             1,780,562      1,429,627          1,605,095
                                                                                    SFAS 112                                                                            -      3,037,000          1,518,500
                                                                                    Incentive Accrual                                                          33,521,403     39,048,210        36,284,807
                                                                                    Severance                                                                   3,790,928      2,162,780          2,976,854
                                                                                    SERBP                                                                      10,702,889     16,518,672        13,610,781
                                                                                                                (B) Sum Labor Related                          68,546,779     75,079,766        71,813,273         5.22%         3,917,061


             Other
                                                                                                                      (A) - (B)                                46,807,383     48,839,618        47,823,501         0.00%                   -



             Total Transmission Related Reserves                                                                                                                                                                                 3,917,061
                                                                                                                                                                                                                                           Page 65 of 77




Prepayments
                                                                                                                                                                           End of Year for
                                                                                                                                                                           Est. Average for                     Trans
Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                                                             Beg of year       End of Year             Final         Allocation      Related        Details
    37 Prepayments
           Labor Related                                                       Worksheet 5                                                                                              -           5.217%            -
           Plant Related                                                       Worksheet 5                                                15,552,688         8,318,781          11,935,735         16.761%     1,394,287
           100% Transmission Related                                           Worksheet 5                                                   100,000         4,614,382            2,357,191       100.000%     4,614,382
           Other (Excluded)                                                    Worksheet 5                                                 8,353,684        10,413,057            9,383,371         0.000%            -

                                                                                                                                                                                                               6,008,669

Materials & Supplies

                                                                                                                                                                           End of Year for
                                                                                                                                                                           Est. Average for
Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                                                             Beg of year       End of Year             Final

           Assigned to O&M                                                     p227.6                                                                -                 -
  40       Stores Expense Undistributed                                        p227.15                                                               -                 -
           Undistributed Stores Exp                                                                                                              -                -                     -


  43       Transmission Materials & Supplies                                   p227.8                                                     23,441,895        25,893,267          24,667,581

Outstanding Network Credits Cost Support
                               Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                                                                                Description of the Credits
                                                                                                                                                                           End of Year for
                                                                                                                                                                           Est. Average for
       Network Credits                                                                                                                 Beg of year       End of Year             Final
  48       Outstanding Network Credits                                                                                                                                               General Description of the Credits
           December                                                            Account 253                    For 2009   1,270,558         1,270,558
           December                                                            Account 253                    For 2010         -                                  -
           Average Beginning and End of Year                                                                               635,279                                                 635,279

  49       Accumulated Depreciation Associated with Facilities with Outstanding Network Credits
           December                                                             Account 253                   For 2009   1,072,746         1,072,746
           December                                                             Account 253                   For 2010         -                                  -
           Average Beginning and End of Year                                                                               536,373                                                 536,373



Interest on Outstanding Network Credits Cost Support
                                                                                                                                       Interest on
                                 Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions                          Network Credits                             Description of the Interest on the Credits
                                                                                                                                         Credits
 138       Interest on Network Credits                                                                                                              0                                General Description of the Credits


                                                                                                                                                                                                             Add more lines if necessary
                                                                                                                                                               Page 66 of 77




Amort of Other Utility Plant
            Attachment A Line #s, Descriptions, Notes, Form 1 Page #s and Instructions   Total Reserve          Allocation   Allocator       w/ interest
 18
       Organization Costs                                                                            -    wages & salaries         5.2172%                 0
       Franchises                                                                          1,019,363.30 zero                       0.0000%                 0
       Misc Intangible                                                                   328,424,939.42 wages & salaries           5.2172%     17,134,583
       Steam Land & Land Rights                                                             (174,487.68) zero                      0.0000%                 0
       Nuclear Structures & Improvements                                                   2,873,725.36 zero                       0.0000%                 0
       Nuclear Reactor Plant Equipment                                                    27,314,669.79 zero                       0.0000%                 0
       Nuclear Turbogenerator Equip                                                        5,410,999.55 zero                       0.0000%                 0
       Nuclear Accessory Elec Equipment                                                    1,060,641.81 zero                       0.0000%                 0
       Nuclear Misc Power Equipment                                                          686,086.80 zero                       0.0000%                 0
       Other Prod Land & Land Rights                                                              76.16 zero                       0.0000%                 0
       Transmission Land & Land Rights                                                    14,515,840.86 100% Transmission        100.0000%     14,515,841
       SCE Trans Land & Land Rights                                                        1,161,413.32 100% Transmission        100.0000%       1,161,413
       Distribution Land & Land Rights                                                     1,822,102.99 zero                       0.0000%                 0
       Distribution Structures & Improvements                                                195,946.00 zero                       0.0000%                 0
       Distribution Line Transformers                                                        179,792.00 zero                       0.0000%                 0
       Distribution Customer Installations                                                    36,887.38 zero                       0.0000%                 0
       General Plant Land & Land Rights                                                      101,673.50 wages & salaries           5.2172%           5,305
       General Plant Structures & Improvements                                            15,143,366.13 wages & salaries           5.2172%        790,060
       General Office Furniture & Equipment                                               16,586,506.28 wages & salaries           5.2172%        865,351
       General Plant Transportation Equipment                                              5,051,042.74 wages & salaries           5.2172%        263,523
       General Stores Equipment                                                               53,028.27 wages & salaries           5.2172%           2,767
       General Garage Tools                                                               15,189,490.21 wages & salaries           5.2172%        792,466
       General Laboratory Equipment                                                          835,032.68 wages & salaries           5.2172%          43,565
       General Plant Communication Equipment                                                 181,181.48 wages & salaries           5.2172%           9,453
       General Miscellaneous Equipment                                                     2,243,043.61 wages & salaries           5.2172%        117,024

       Tie to Line 21 FF1 Page 200                                                          439,912,362                                        35,701,349
                                                                                                                                                                                                            page 67 of 77




                                                                                      Arizona Public Service Company
                                                                           Attachment 6 - Estimate and Reconciliation Worksheet




Exec Summary
 Step Month Year            Action
   1  April Year 2   TO populates the formula with Year 1 data from FERC Form 1.
   2  April Year 2   TO estimates all transmission Cap Adds, Retirements, and associated depreciation for Year 2 based on Months expected to be in service in Year 2.
   3  April Year 2   TO adds estimates from Step 2 to Appendix A
   4   May Year 2    Post results of Step 3 on APS web site.
   5  June Year 2    Results of Step 3 go into effect.
   6  April Year 3   TO populates the formula with Year 2 data from FERC Form 1.
   7  April Year 3   Reconciliation - TO calculates the true up amount by subtracting the results of Step 6 by Step 3.
   8  April Year 3   Reconciliation - TO calculates interst and ammortization associated with the true up calculated in Step 7 and applies that amount to line 152 of the formula.
   9  April Year 3   TO estimates all transmission Cap Adds, Retirements, CWIP and associated depreciation for Year 3 based on Months expected to be in service and monthly CWIP balances in Year 3.
  10  April Year 3   TO adds 13 month average Cap Adds and retirements (line 16 and 25) to the Formula.
  11   May Year 3    Post results of Step 10 on APS web site.
  12 June Year 3     Results of Step 9 go into effect for the Rate Year 2.



Reconciliation details

  1    April Year 2 TO populates the formula with Year 1 data from FERC Form 1.
                         185,147,970 Rev Req based on Year 1 data                           Must run Appendix A to get this number (without estimated cap adds) from Appendix A

  2    April Year 2 TO estimates all transmission Cap Adds, Retirements, and associated depreciation for Year 2 based on Months expected to be in service in Year 2.
                                                                                                                           (E)                          (F)               (G)
                    (A)                  (B)                               (C)                (D)                                              Accumulated Balance
                     Other Project PIS         other retirements               Project X PIS    Project X PIS retirements Other Project PIS             Project X PIS     Total
             Dec                                                                                                                                      0                 0                0
             Jan               1,548,373                       (1,531,840)                                               0                      16,533                -            16,533
             Feb               2,525,242                          (47,081)                                               0                   2,494,694                -         2,494,694
             Mar               1,165,092                                                                                 0                   3,659,786                -         3,659,786
             Apr               4,172,238                                                                                 0                   7,832,024                -         7,832,024
             May               4,923,115                                                                                 0                  12,755,139                -       12,755,139
             Jun              51,580,594                                                                                 0                  64,335,733                -       64,335,733
             Jul              61,208,215                                                                                 0                125,543,948                 -     125,543,948
             Aug                     -                                                                                   0                125,543,948                 -     125,543,948
             Sep               5,081,483                                                                                 0                130,625,431                 -     130,625,431
             Oct                     -                                                                                   0                130,625,431                 -     130,625,431
             Nov                 544,786                                                                                 0                131,170,217                 -     131,170,217
             Dec              84,339,227                                                                                 0                215,509,444                 -     215,509,444
             Total       217,088,365                                                        -                                               73,085,564                -       73,085,564

                                                                         13 month avg of new plant additions = Col F + Col H                                 73,085,564    goes to line 16 of the formula
                                                                                                                                                                                                                  page 68 of 77




                  (I) =F               (J)                               (K) = I * J          (L)                            (M) = H                          (N)             (O) = L * M          (P)
                       Total Other     Composite Trans                       Depreciation            Accum Deprec                      Total Project X        Composite Trans   Depreciation             Accum
                       Project PIS             Deprec Rate                      Expense                                                      PIS                 Deprec Rate      Expense                Deprec

          Jan              1,548,373                             0.19%             2,881                            2,881                                -               0.19%                 -              -
          Feb              2,525,242                             0.19%             4,699                            7,580                                -               0.19%                 -              -
          Mar              1,165,092                             0.19%             2,168                            9,747                                -               0.19%                 -              -
          Apr              4,172,238                             0.19%             7,763                           17,510                                -               0.19%                 -              -
          May              4,923,115                             0.19%             9,160                           26,671                                -               0.19%                 -              -
          Jun             51,580,594                             0.19%            95,973                          122,643                                -               0.19%                 -              -
          Jul             61,208,215                             0.19%          113,886                           236,530                                -               0.19%                 -              -
          Aug                      0                             0.19%               -                            236,530                                -               0.19%                 -              -
          Sep              5,081,483                             0.19%             9,455                          245,985                                -               0.19%                 -              -
          Oct                      0                             0.19%               -                            245,985                                -               0.19%                 -              -
          Nov                544,786                             0.19%             1,014                          246,998                                -               0.19%                 -              -
          Dec             84,339,227                             0.19%          156,925                           403,923                                -               0.19%                 -              -
          Total                                                                 403,923                           150,249                                                                      -              -
                                       13 mo. Avg accumulated depreciation = Col L + Col P:                                                         150,249   goes to line 25 of the formula
                                       Depreciation Expense = Col K + Col O                                                                         403,923   goes to line 75 of the formula

3   April Year 2 TO adds estimates from Step 2 to Appendix A
                      203,875,658                                        Include inputs to Appendix A Lines 16, 25, and 75

4   May   Year 2 Post results of Step 3 on APS web site.
                  $    203,875,658                                       Must run Appendix A to get this number (with results of step 2)

5   June Year 2 Results of Step 3 go into effect.
                     203,875,658

6   April Year 3 TO populates the formula with Year 2 data from FERC Form 1.

                        211,311,356 Rev Req based on Prior Year data


7   April Year 3 Reconciliation - TO calculates the true up amount by subtracting the results of Step 6 by Step 3.
                                                                      Prior Year True Up First Year True up                  Total True Up
                                     Results of Step 6                 $     211,311,356                                      $                211,311,356
                                     Results of Step 5                 $     203,875,658                                     $                 203,875,658
                                      True up w/o interest                                                                    $                  7,435,698
                                      Refund of Amounts Overcollected


                                                                                            Divide True up w/o interest by the number of months the rate was in effect and place that result
                                       True Up to be recovered           $        7,435,698 in the month that the rate went in effect in the interest calculation below
                                                                                                                                                                                              page 69 of 77




8   April Year 3
                Reconciliation - TO calculates interst and ammortization associated with the true up calculated in Step 7 and applies that amount to line 152 of the formula.
                Interest on Amount of Refunds or Surcharges
                Interest 35.19a for 1st quarter Current Yr                                                      0.2708%
                                                                                               Interest 35.19a for and
          Month          Yr                                              1/12 of Step 7                35.19 b                                                 Interest       Refunds Owed
                                                                                                  March Current Yr                   Months
         Jun    Year 1                                                           619,642                        0.2708%                            11.5             19,299          638,941
         Jul    Year 1                                                           619,642                        0.2708%                            10.5             17,621          637,263
         Aug    Year 1                                                           619,642                        0.2708%                             9.5             15,943          635,584
         Sep    Year 1                                                           619,642                        0.2708%                             8.5             14,265          633,906
         Oct    Year 1                                                           619,642                        0.2708%                             7.5             12,586          632,228
         Nov    Year 1                                                           619,642                        0.2708%                             6.5             10,908          630,550
         Dec    Year 1                                                           619,642                        0.2708%                             5.5               9,230         628,872
         Jan    Year 2                                                           619,642                        0.2708%                             4.5               7,552         627,193
         Feb    Year 2                                                           619,642                        0.2708%                             3.5               5,874         625,515
         Mar    Year 2                                                           619,642                        0.2708%                             2.5               4,195         623,837
         Apr    Year 2                                                           619,642                        0.2708%                             1.5               2,517         622,159
         May    Year 2                                                           619,642                        0.2708%                             0.5                 839         620,481
         Total                                                                 7,435,698                                                                                          7,556,528

                                                                             Balance                    Interest                     Amort                   Balance
         Jun      Year 2                                                        7,556,528                          0.2708%                     640,851         6,936,143
         Jul      Year 2                                                        6,936,143                          0.2708%                     640,851         6,314,077
         Aug      Year 2                                                        6,314,077                          0.2708%                     640,851         5,690,326
         Sep      Year 2                                                        5,690,326                          0.2708%                     640,851         5,064,886
         Oct      Year 2                                                        5,064,886                          0.2708%                     640,851         4,437,753
         Nov      Year 2                                                        4,437,753                          0.2708%                     640,851         3,808,920
         Dec      Year 2                                                        3,808,920                          0.2708%                     640,851         3,178,385
         Jan      Year 3                                                        3,178,385                          0.2708%                     640,851         2,546,142
         Feb      Year 3                                                        2,546,142                          0.2708%                     640,851         1,912,187
         Mar      Year 3                                                        1,912,187                          0.2708%                     640,851         1,276,514
         Apr      Year 3                                                        1,276,514                          0.2708%                     640,851           639,120
         May      Year 3                                                          639,120                          0.2708%                     640,851                 0
         Total with interest                                                                                                                 7,690,214

         The difference between the Reconciliation in Step 6 and the forecast in Prior Year with interest                                                      7,690,214
                                                                                                                                                                                                               page 70 of 77




9    April Year 3 TO estimates all transmission Cap Adds, Retirements, CWIP and associated depreciation for Year 3 based on Months expected to be in service and monthly CWIP balances in Year 3.
                  Note: Jan and Feb are actuals, Mar-Dec forecasted. Retirements are not forecasted.
                                                                                                                       (E)                          (F)               (G)
                  (A)                  (B)                           (C)                  (D)                                              Accumulated Balance
                   Other Project PIS         other retirements           Project X PIS      Project X PIS retirements Other Project PIS             Project X PIS     Total
           Dec                                                                                                                                    0                 0                0
           Jan                 526,484                           -                                                   0                     526,484                -           526,484
           Feb               1,763,771                           -                                                   0                   2,290,256                -         2,290,256
           Mar               5,326,585                                                                               0                   7,616,840                -         7,616,840
           Apr               1,511,629                                                                               0                   9,128,470                -         9,128,470
           May                 385,224                                                                               0                   9,513,694                -         9,513,694
           Jun              18,089,391                                                                               0                  27,603,085                -       27,603,085
           Jul                 350,000                                                                               0                  27,953,085                -       27,953,085
           Aug               1,645,844                                                                               0                  29,598,930                -       29,598,930
           Sep               1,522,207                                                                               0                  31,121,137                -       31,121,137
           Oct                 499,954                                                                               0                  31,621,090                -       31,621,090
           Nov                     -                                                                                 0                  31,621,090                -       31,621,090
           Dec              20,684,227                                                                               0                  52,305,317                -       52,305,317
           Total         52,305,317                                                   -                                                 20,069,191                -       20,069,191

                                                                         13 month avg of new plant additions = Col F + Col H                                    20,069,191    goes to line 16 of the formula


                    (I) =F               (J)                             (K) = I * J        (L)                           (M) = H                          (N)             (O) = L * M          (P)
                         Total Other     Composite Trans                     Depreciation          Accum Deprec                     Total Project X        Composite Trans   Depreciation             Accum
                         Project PIS             Deprec Rate                    Expense                                                   PIS                 Deprec Rate      Expense                Deprec

            Jan                526,484                           0.19%                 984                          984                               -               0.19%                 -              -
            Feb              1,763,771                           0.19%               3,297                        4,282                               -               0.19%                 -              -
            Mar              5,326,585                           0.19%               9,958                       14,240                               -               0.19%                 -              -
            Apr              1,511,629                           0.19%               2,826                       17,066                               -               0.19%                 -              -
            May                385,224                           0.19%                 720                       17,786                               -               0.19%                 -              -
            Jun             18,089,391                           0.19%              33,818                       51,604                               -               0.19%                 -              -
            Jul                350,000                           0.19%                 654                       52,258                               -               0.19%                 -              -
            Aug              1,645,844                           0.19%               3,077                       55,335                               -               0.19%                 -              -
            Sep              1,522,207                           0.19%               2,846                       58,181                               -               0.19%                 -              -
            Oct                499,954                           0.19%                 935                       59,115                               -               0.19%                 -              -
            Nov                      0                           0.19%                 -                         59,115                               -               0.19%                 -              -
            Dec             20,684,227                           0.19%              38,669                       97,784                               -               0.19%                 -              -
            Total                                                                   97,784                       40,646                                                                     -              -
                                         13 mo. Avg accumulated depreciation = Col L + Col P:                                                     40,646   goes to line 25 of the formula
                                         Depreciation Expense = Col K + Col O                                                                     97,784   goes to line 75 of the formula

10    April Year 3 TO adds 13 month average Cap Adds and retirements (line 111 and 121) to the Formula.
     Rev Req based on Year 2 data with estimated Cap Adds, Rets, and Deprec for Year 3 Cap Adds (Step 9) and True up of Year 1 data (Step 8)
                   Must run App A to get this # (with 13 mo. avg cap adds, depreciation for Year 3 cap adds)

11    May   Year 3 Post results of Step 10 on APS web site.
                    $    226,819,267

12   June Year 3 Results of Step 9 go into effect for the Rate Year 2.
                      234,509,481 Step 11 plus the difference between the Reconciliation in Step 6 and the forecast in Prior Year with interest
                                                                                                                                                                                                                                                                    Page 71 of 77




                                                                                        Arizona Public Service Company

                                                                      Attachment 7 - Transmission Enhancement Charge Worksheet
line #                        Formula Line
   1                               153    Plus any increased ROE calculated on Attachment 7                                                                                    $                           -
                                                         =Incentive - Revenue Credit for the corresponding rate year
         Fixed Charge Rate (FCR) if not a CIAC
  2              A            143         Net Plant Carrying Charge without Depreciation                                                                                                          13.5994%
  3              B            150         Net Plant Carrying Charge per 100 Basis Point in ROE without Depreciation                                                                               14.3556%
  4              C                        Line B less Line A                                                                                                                                       0.7562%
         FCR if a CIAC
  5              D            144         Net Plant Carrying Charge without Depreciation, Return, nor Income Taxes                                                                                 3.0525%

         The FCR resulting from Formula in a given year is used for that year only.
         Therefore actual revenues collected in a year do not change based on cost data for subsequent years

                                                Beginning = 13 month Plant CWIP or Incentive Plant balance                                                                     Total = Sum of Revenue for Project CWIP and PIS
                                                Deprec = 13 month avg Accumulated Depreciation                                                                                 Incentive = Total for "W Increased ROE" row
                                                Ending = Beginning - Deprec                                                                                                    Revenue Credit = Total for ''FCR W base ROE'' row
                                                Revenue= FCR* Ending + Ending
         Details                                                                  Project A                                                                        Project B

  6      Life                                            -                                                                                    -
  7      CIAC                                        No                                                                                   No
  8      Increased ROE (Basis Points)                0                                                                                     0
  9      FCR W base ROE                              13.599%                                                                              13.599%
 10      FCR W increased ROE                         13.599%                                                                              13.599%
 11      Investment
 12      Annual Depreciation Exp                         -                                                                                    -
 13      13 monthly Avg                                  -                                                                                    -
                                                                                                           Revenue [(Beginning +                                                   Revenue [(Beginning +
 14                                 Invest Yr     Beginning          Depreciation           Ending          Ending)/2* Line 11]        Beginning    Depreciation   Ending           Ending)/2* Line 11]                Total           Incentive       Rev Credit
 15      FCR W base ROE               2005                -                         -             -                                -          -                -         -                                     -   $           -                   $           -
 16      W Increased ROE              2005                -                         -             -                                -          -                -         -                                     -   $           -   $           -
 17      FCR W base ROE               2006                -                         -             -                                -                                                                               $           -                   $           -
 18      W Increased ROE              2006                -                         -             -                                -                                                                               $           -   $           -
 19      FCR W base ROE               2007                -                         -             -                                -                                                                               $           -                   $           -
 20      W Increased ROE              2007                -                         -             -                                -                                                                               $           -   $           -
 21      FCR W base ROE               2008                -                         -             -                                -                                                                               $           -                   $           -
 22      W Increased ROE              2008                -                         -             -                                -                                                                               $           -   $           -
 23      FCR W base ROE               2009                -                         -             -                                -                                                                               $           -                   $           -
 24      W Increased ROE              2009                -                         -             -                                -                                                                               $           -   $           -
 25      FCR W base ROE               2010                -                         -             -                                -                                                                               $           -                   $           -
 26      W Increased ROE              2010                -                         -             -                                -                                                                               $           -   $           -
 27      FCR W base ROE               2011                -                         -             -                                -                                                                               $           -                   $           -
 28      W Increased ROE              2011                -                         -             -                                -                                                                               $           -   $           -
 29      FCR W base ROE               2012                -                         -             -                                -                                                                               $           -                   $           -
 30      W Increased ROE              2012                -                         -             -                                -                                                                               $           -   $           -
 31      FCR W base ROE               2013                -                         -             -                                -                                                                               $           -                   $           -
 32      W Increased ROE              2013                -                         -             -                                -                                                                               $           -   $           -
 33      FCR W base ROE               2014                -                         -             -                                -                                                                               $           -                   $           -
 34      W Increased ROE              2014                -                         -             -                                -                                                                               $           -   $           -
 35      FCR W base ROE               2015                -                         -             -                                -                                                                               $           -                   $           -
 36      W Increased ROE              2015                -                         -             -                                -                                                                               $           -   $           -
 37      FCR W base ROE               2016                -                         -             -                                -                                                                               $           -                   $           -
 38      W Increased ROE              2016                -                         -             -                                -                                                                               $           -   $           -
 39      FCR W base ROE               2017                -                         -             -                                -                                                                               $           -                   $           -
 40      W Increased ROE              2017                -                         -             -                                -                                                                               $           -   $           -
 41      FCR W base ROE               2018                -                         -             -                                -                                                                               $           -                   $           -
 42      W Increased ROE              2018                -                         -             -                                -                                                                               $           -   $           -
 43      FCR W base ROE               2019                -                         -             -                                -                                                                               $           -                   $           -
 44      W Increased ROE              2019                -                         -             -                                -                                                                               $           -   $           -
 45      FCR W base ROE               2020                -                         -             -                                -                                                                               $           -                   $           -
 46      W Increased ROE              2020                -                         -             -                                -                                                                               $           -   $           -
 47      FCR W base ROE               2021                -                         -             -                                -                                                                               $           -                   $           -
 48      W Increased ROE              2021                -                         -             -                                -                                                                               $           -   $           -
 49      FCR W base ROE               2022                -                         -             -                                -                                                                               $           -                   $           -
 50      W Increased ROE              2022                -                         -             -                                -                                                                               $           -   $           -
 51      FCR W base ROE               2023                -                         -             -                                -                                                                               $           -                   $           -
 52      W Increased ROE              2023                -                         -             -                                -                                                                               $           -   $           -
 53      FCR W base ROE               2024                -                         -             -                                -                                                                               $           -                   $           -
 54      W Increased ROE              2024                                          -             -                                -                                                                               $           -   $           -
 55                            ….                              ….                         …..         ….                                                                                                                                           $           -
 56                            ….               ….             …..                        …..         ….                                                                                                                           $           -   $           -
                                                                                                                                                                                                                                      Page 72 of 77

Worksheet 1 - Revenue Allocation
NETWORK TRANSMISSION PEAK REPORT
                                                                                                      2010

                                                                                                                                                                                                                  Transmission
Date/Time                                                     01/25@0800 02/23@0800 03/10@0800 04/27@1700 05/21@1700 06/30@1700 07/15@1700 08/24@1600 09/03@1700 10/01@1600 11/30@0800 12/31@1900                 Revenue
                                                                  Jan         Feb        Mar        Apr        May         Jun       Jul        Aug         Sep        Oct        Nov       Dec       4CP Average Requirement
Own Load Peak                                                     3,925.300  3,796.000  3,672.200  3,745.700  4,668.700  6,440.300  6,935.900  6,912.100  6,275.900  5,761.300  4,029.600  4,059.300               $ 234,509,481
Company Use                                                         (10.742)   (10.984)    (9.863)    (9.826)    (9.658)   (10.996)   (12.073)   (13.754)   (13.868)   (14.854)   (16.512)   (10.455)
BHP Minerals International, Inc.                                     (5.485)    (6.655)    (5.285)    (6.115)    (7.310)   (10.565)    (0.945)    (7.295)    (7.070)   (10.005)    (6.675)    (7.300)
less APS Supplied Demand already included below                     (62.197)   (43.334)   (70.303)   (78.733) (111.132)  (151.155)  (157.339)  (142.112)  (143.690)  (114.113)    (63.572)   (44.125)
Non-Firm Retail Loads
BHP Copper Inc. (Magma)                                             0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000
Net APS Official System Peak                                     3,846.876   3,735.027   3,586.749   3,651.026   4,540.600   6,267.584   6,765.543   6,748.939   6,111.272   5,622.328   3,942.841   3,997.420   6,473.334 $   190,814,131

Transmission Wheeling Contract Demand
Plains Electric Cooperative                                           N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Tucson Electric Power                                             100.000     100.000     100.000     100.000     100.000     100.000     100.000     100.000     100.000     100.000     100.000     100.000
NTUA                                                                  N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Yuma Cogen. Associates                                             50.850      50.850      50.850      50.850      50.850      50.850      50.850      50.850      50.850      50.850      50.850      50.850
Total Trans. Wheeling Contract Demands                            150.850     150.850     150.850     150.850     150.850     150.850     150.850     150.850     150.850     150.850     150.850     150.850     150.850 $      4,446,597

Distribution Wheeling Contract Demand
ED-5                                                                  N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Yuma-Mesa                                                           0.135       0.135       0.135       0.135       0.135       0.135       0.135       0.135       0.135       0.135       0.135       0.135
City of Wickenburg                                                    N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
USAF - (Luke AFB)                                                   4.974       4.974       4.974       4.974       4.974       4.974       4.974       4.974       4.974       4.974       4.974       4.974
Unit B Irrigation District                                          0.016       0.016       0.016       0.016       0.016       0.016       0.015       0.015       0.015       0.015       0.015       0.015
SCIIP                                                               0.063       0.063       0.063       0.063       0.063       0.063       0.063       0.063       0.063       0.063       0.063       0.063
Navy (Marine Corp)                                                  2.278       2.278       2.278       2.278       2.278       2.278       2.278       2.278       2.278       2.278       2.278       2.278
Total Dist. Wheeling Contract Demands                               7.466       7.466       7.466       7.466       7.466       7.466       7.465       7.465       7.465       7.465       7.465       7.465       7.465 $       220,053

Distribution Wheeling Loads
Maricopa Cnty Mun Dist - Lake Pleasant                                N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A       0.000 $            -

Irrigation Wheeling Loads:
ED-1                                                                  N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
ED-3                                                                  N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
ED-6                                                                  N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
ED-7                                                                  N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
ED-8                                                                  N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Maricopa County Municipal District                                    N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Roosevelt Irrigation District                                         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Buckeye Irrigation District                                           N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Aguila Irrigation District                                            N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Harquahala Irrigation District                                        N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
McMullen Valley Irrigation District                                   N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Tonopah Irrigation District                                           N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Yuma Irrigation District                                              N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
  Gila Project                                                        N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
  CRFW                                                                N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
Total Irrigation Wheeling Loads                                     0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000       0.000 $            -

Network Customer Wheeling Loads
Central AZ Water Cons District                                     19.534      19.627      28.958      34.855      22.270      14.818      23.177      15.725      21.766      10.116      12.290       0.396
Citizens                                                              N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
NTUA                                                                6.978       6.719       4.330       3.386       3.288       4.896       5.618       5.873       5.045       4.760       8.271       8.151
Ajo Improvement District                                            1.692       1.805       1.436       1.887       1.959       2.800       3.056       2.831       2.769       2.738       1.569       1.559
Tohono O'odham                                                        N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A         N/A
City of Williams                                                    5.868       5.636       5.433       3.811       4.080       5.091       6.072       5.791       5.476       4.751       6.039       7.346
Southwest Transmission Cooperative                                  1.500       2.500       1.500       1.500       3.500       4.500       5.500       4.500       4.500       5.000       2.000       3.500
PNMIII                                                             56.497      56.970      56.719      37.874      39.162      45.622      48.578      45.178      45.688      43.278      69.596      75.761
                 APS Merchant Group:                ED-6            0.182       0.019       0.043       0.041       0.109       0.563       0.350       0.011       0.391       0.096       0.414       0.058
                                                    ED-7            6.831       3.886       3.108       4.089       4.654      10.224       8.252       4.490       9.986       5.879      10.628       4.570
                                                    ED-8           20.800       9.743      12.726      28.583      28.727      47.165      45.481      30.775      45.337      35.876      33.961       9.172
                       Maricopa County Municipal District           5.168      10.599       2.512       1.814       2.495       9.989       8.496       2.857       8.743      10.233      10.197       4.107
                              Roosevelt Irrigation District         4.182       1.402       1.967       1.923       1.873       6.942       6.271       4.008       6.061       2.178       6.843       2.105
                               Buckeye Irrigation District          2.026       0.393       0.569       0.761       1.240       4.442       3.847       2.283       3.749       0.640       3.273       0.379
                                 Aguila Irrigation District         1.351       0.976       0.982       2.936       4.111       6.266       6.279       3.505       5.200       4.254       2.597       4.546
                            Harquahala Irrigation District          3.074       0.767       2.669      10.829      11.742      13.015      13.296      10.139      11.231       5.509       4.440       0.042
                        McMullen Valley Irrigation District         4.016       0.890       1.441       8.918      10.002      13.127      11.643       9.967      12.715      10.219       6.628       2.103
                               Tonopah Irrigation District          1.391       0.380       0.586       1.989       2.805       4.440       4.726       2.792       4.888       3.910       2.123       0.584
                                     City of Wickenburg             4.206       4.241       4.041       3.596       4.470       6.249       6.848       6.968       6.155       6.025       4.345       4.320
                                       Tohono O'odham              10.949      10.433      10.467       7.877       8.904      12.013      10.992      13.062      12.555      10.840      11.441      10.439
                                                    ED-3           33.847      28.474      50.472      49.273      75.359     104.111     105.985      99.934     104.482      93.431      54.635      34.219
Total Network Customer Wheeling Loads                             190.092     165.460     189.959     205.942     230.750     316.273     324.467     270.689     316.737     259.733     251.290     173.357     307.042 $      9,050,646

Other Transmission Loads
Pacific Corp: Supplemental Trans. Rights                           30.000      30.000      30.000      30.000      30.000      30.000      30.000      30.000      30.000      30.000      30.000      30.000
Public Service of New Mexico                                      130.000     130.000     130.000     130.000     130.000     130.000     130.000     130.000     130.000     130.000     130.000     130.000
OATT (Part II) Capacity Long Term                                 853.000     853.000     853.000     853.000     857.000     857.000     857.000     857.000     857.000     857.000     857.000     857.000
Total Other Transmission Loads                                   1013.000    1013.000    1013.000    1013.000    1017.000    1017.000    1017.000    1017.000    1017.000    1017.000    1017.000    1017.000    1,017.000 $    29,978,054

Total Adjusted Network Peak                                      5208.284    5071.803    4948.024    5028.284    5946.666    7759.173    8265.325    8194.943    7603.324    7057.376    5369.446    5346.092    7,955.691 $   234,509,481
Average of Four Summer Months (June-September)                   7955.691
Average of Eight Non-Summer Months                               5496.997
Average of Twelve Months                                         6316.562
                                                                                                                             Page 73 of 77




WORKSHEET - 2 Retail Allocation

                                                       2010
                                    June        July       August     September

                                    ADJ.        ADJ.        ADJ.        ADJ.
                                   PEAK        PEAK        PEAK        PEAK
                                  CONTRIB     CONTRIB     CONTRIB     CONTRIB                      Retail
                CLASS               (MW)        (MW)        (MW)        (MW)       4CP           Revenues
 E-12                                 863.5       974.4       927.7        841.9
 ET-1                                1217.6      1321.0      1203.3       1122.9                                            3,448.300
 ECT-1                                288.2       313.8       303.8        277.5
 ET-2                                 529.1       595.9       580.9        577.6
 ECT-2                                216.6       243.2       247.2        241.2
 TOTAL                               3115.0      3448.3      3262.9       3061.1
 E-20                                   3.6         3.3         5.5          3.8
 E-221(Water Pumping Service)          31.1        27.9        20.4         24.3
 E-32TOU (0-100 kW)                     3.7         3.5         3.4          3.5                                            NCP
 E-32TOU (101-400 kW)                   5.8         5.9         7.3          6.9                                              38.500
 E-32TOU (401+ kW)                     31.1        38.5        34.2         38.0
 E-32 (0-100 kW)                      743.1       809.8       860.3        689.8
 E-32(101-400 kW)                     551.5       557.5       640.7        532.1                                            4CP
 E-32(401+ kW)                        565.0       601.5       663.3        588.7                                             604.625
 E-34                                 170.4       162.1       183.9        163.2
 E-35                                 196.9       200.6       197.0        206.4
 E-36                                   6.3         0.0         0.0          0.0
 2 SPECIALS                            10.6         0.9         7.3          7.3
 STREETLIGHTS                           0.0         0.0         0.0          0.0
 DUSK TO DAWN                           0.0         0.0         0.0          0.0
 RESALE                               220.5       216.0       175.7        210.2
 LOSSES                               785.7       860.1       850.2        740.6
Total System Load                    6440.3      6935.9      6912.1       6275.9
System Load Check                    6440.3      6935.9      6912.1       6275.9     6,641.1

 RESIDENTIAL                         3115.0      3448.3      3262.9       3061.1     3,221.8       $109,423,707   57.35%

3 MW & GREATER
E-34                                  170.4       162.1       183.9        163.2
E-35                                  196.9       200.6       197.0        206.4
3 MW & GREATER TOTAL                  367.3       362.7       380.9        369.6         370.1      $12,570,655    6.59%

LESS THAN 3 MW
RETAIL TARIFFS                       1934.9      2047.9      2235.1       1887.1
Customer #1                             0.0         0.0         0.0          0.2
LESS THAN 3 MW TOTAL                 1934.9      2047.9      2235.1       1887.3     2,026.3        $68,819,770   36.07%



Total                                5417.2      5858.9      5878.9       5318.0     5,618.3       $190,814,131   100.00%
                                                                                                                                                                                                                                                                                               Page 74 of 77




WORKSHEET - 3 Rate Design

                                                                                                                                               TY 2010 OATT COSTS FOR RETAIL SERVICE

                                                                     Jan                 Feb                Mar               Apr               May                 Jun               Jul             Aug              Sep               Oct              Nov             Dec                Annual
Billing Determinants
Residential (kWh)                                                 1,011,627,682         879,886,599     820,259,196          725,920,887     775,826,874        1,110,105,319   1,583,770,394    1,624,659,296    1,557,320,989    1,256,770,054      825,472,848      884,951,931        13,056,572,069
Gen Serv und 3MW NDM (kWh)                                          132,605,637         123,244,711     120,614,528          115,585,582     116,952,561          133,486,028     150,570,961      151,265,221      150,453,948      137,888,470      122,897,323      127,902,783         1,583,467,753
Gen Serv und 3MW DM (billed kW)                                       2,082,585           2,042,276       2,052,636            2,133,081       2,249,129            2,502,771       2,677,743        2,721,327        2,756,406        2,600,140        2,293,790        2,127,135            28,239,019
Gen Serv und 3MW DM (kWh)                                           764,112,451         742,122,120     725,400,438          732,690,377     767,991,285          889,300,487   1,011,466,121    1,013,675,867    1,028,719,956      926,372,014      786,864,531      764,460,523        10,153,176,170
Gen Serv ovr 3MW (billed kW)                                            488,737             491,835         494,348              501,177         507,843              518,126         530,361          540,302          557,373          531,008          511,060          501,143             6,173,313
Gen Serv ovr 3MW (kWh)                                              216,809,268         211,196,120     216,078,693          237,329,446     220,311,775          241,051,946     247,711,663      242,005,498      260,268,964      245,045,044      231,775,094      228,911,598         2,798,495,109
Total kWh sales                                                   2,125,155,038       1,956,449,550   1,882,352,855        1,811,526,292   1,881,082,495        2,373,943,780   2,993,519,139    3,031,605,882    2,996,763,857    2,566,075,582    1,967,009,796    2,006,226,835        27,591,711,101

NITS
Residential (kWh)                                $ 0.00838           8,478,186           7,374,099         6,874,377          6,083,753         6,502,002          9,303,502        13,273,164       13,615,844       13,051,499       10,532,660        6,918,071        7,416,550         109,423,707
Gen Serv < 3MW Without Demand Meters -Includes
All Customers 20 kW and less (kWh)               $ 0.00586             777,555             722,666           707,243            677,755           685,771            782,718           882,898          886,969          882,212          808,532          720,629          749,979           9,284,927
Gen Serv < 3MW (kW)                              $    2.108          4,390,605           4,305,623         4,327,465          4,497,063         4,741,721          5,276,461         5,645,345        5,737,231        5,811,186        5,481,739        4,835,877        4,484,527          59,534,843
Gen Serv > 3MW (kW)                              $    2.036            995,210           1,001,519         1,006,636          1,020,542         1,034,116          1,055,055         1,079,969        1,100,211        1,134,973        1,081,286        1,040,666        1,020,472          12,570,655
Total OATT Cost by Month                                            14,641,557          13,403,907        12,915,721         12,279,112        12,963,609         16,417,735        20,881,376       21,340,255       20,879,870       17,904,217       13,515,244       13,671,529         190,814,131


Total OATT Costs by Class
Residential                                                   $      8,478,186    $      7,374,099    $ 6,874,377      $      6,083,753    $ 6,502,002      $      9,303,502    $ 13,273,164     $ 13,615,844     $ 13,051,499     $ 10,532,660     $ 6,918,071      $ 7,416,550      $     109,423,707
Gen Serv< 3MW                                                 $      5,168,160    $      5,028,289    $ 5,034,708      $      5,174,818    $ 5,427,492      $      6,059,178    $ 6,528,243      $ 6,624,200      $ 6,693,398      $ 6,290,271      $ 5,556,506      $ 5,234,506      $      68,819,770
Gen Serv> 3MW                                                 $        995,210    $      1,001,519    $ 1,006,636      $      1,020,542    $ 1,034,116      $      1,055,055    $ 1,079,969      $ 1,100,211      $ 1,134,973      $ 1,081,286      $ 1,040,666      $ 1,020,472      $      12,570,655
Total                                                         $     14,641,557    $     13,403,907    $ 12,915,721     $     12,279,112    $ 12,963,609     $     16,417,735    $ 20,881,376     $ 21,340,255     $ 20,879,870     $ 17,904,217     $ 13,515,244     $ 13,671,529     $     190,814,131

Cost per kWh
Residential                                                   $        0.00838    $        0.00838    $     0.00838    $        0.00838    $     0.00838    $        0.00838    $     0.00838    $     0.00838    $     0.00838    $     0.00838    $     0.00838    $     0.00838    $         0.00838
Gen Serv< 3MW                                                 $        0.00576    $        0.00581    $     0.00595    $        0.00610    $     0.00613    $        0.00592    $     0.00562    $     0.00569    $     0.00568    $     0.00591    $     0.00611    $     0.00587    $         0.00586
Gen Serv> 3MW                                                 $        0.00459    $        0.00474    $     0.00466    $        0.00430    $     0.00469    $        0.00438    $     0.00436    $     0.00455    $     0.00436    $     0.00441    $     0.00449    $     0.00446    $         0.00449
Total                                                         $        0.00689    $        0.00685    $     0.00686    $        0.00678    $     0.00689    $        0.00692    $     0.00698    $     0.00704    $     0.00697    $     0.00698    $     0.00687    $     0.00681    $         0.00692

Test Year Avg. OATT Expense per kWh                                                                                                                                                                                                                                                   $         0.00692

                                                                                                                                                                                                                                                                                2009 $          0.00565

                                                                                                                                                                                                                                                                         % Increase              22.40%
                                                                                                                                                               Page 75 of 77
Worksheet 4 - Revenue Credits

Account 454 - Rent from Electric Property
                                                               $ Included on
Description                                        Amount      Attachment 3
SCE 500kv Line                                       3,752,651         3,752,651
Attachment Fees for Joint Pole Use                     955,202
Land and miscellaneous                                 211,764
Other                                                  329,093
Total                                                5,248,710
Total Account 454 (p300,19.b.)                       5,248,710
Difference (must be zero)                                  -

Account 456 - Other Electric Revenues
                                                                      $ Included on
Description                                        Amount             Attachment 3

PCS project                                            2,091,379               702,186
Revenue from Terminated Contract - PacifiCorp          2,000,000
Renewable Energy Surcharge                             1,072,040
Facility Charges                                       1,006,451
Fuel oil loading                                         756,311
Yucca Management Fee                                     694,960
Participant Station Power Revenue                        221,925
Gila River Admin Fee                                     100,000               100,000
Salt River Project                                        69,609                69,609
Mead-Phoenix O&M                                          15,726                15,726
Surepay and Autopay Discount                          (1,212,799)
Other                                                     67,185
Total                                                  6,882,787
Total Account 456 (p300,21.b.)                         6,882,787
Difference (must be zero)                                    -

Account 456.1 - Revenues from Transmission of Electricity of Others
                                                                                                                                  Included in
                                                                                                                                 Divisor (Y or $ Included on
CUSTOMER                                           Classification Demand Charges Energy Charges Other Charges Total Revenues           N)      Attachment 3
Ajo Improvement                                    FNO                                   221,141                      221,141          Y
Central Arizona Project                            FNO                                   655,873                      655,873          Y
Navajo Tribal Utility Authority                    FNO                                    29,339                       29,339          Y
Public Service of New Mexico                       FNO                                 1,264,454                    1,264,454          Y
Southwest Transmission Cooperative                 FNO                                   114,410                      114,410          Y
Arizona Public Service                             FNS                                               8,748,300      8,748,300          Y
Arizona Public Service                             FNS                                              (8,748,300)    (8,748,300)         Y
Arizona Public Service                             FNS                                            (181,125,325) (181,125,325)          Y
Arizona Public Service                             FNS                                             181,125,325   181,125,325           Y
AkChin                                             LFP                                  (158,661)                    (158,661)         Y
Gila River Power                                   LFP                   608,346                                      608,346          Y
PacifiCorp                                         LFP                   170,337                                      170,337          Y
Public Service of New Mexico                       LFP                   243,338                                      243,338          Y
Salt River Project                                 LFP                17,121,655                        39,352    17,161,007           Y              39,352
Shell Energy North America                         LFP                 2,433,383                                    2,433,383          Y
Snowflake White Mountain Power                     LFP                   243,338                                      243,338          Y
Electrical District No. 2                          OLF                                                                      0          Y
Luke AFB Main Base                                 OLF                   174,672                                      174,672          Y
Marine Corp                                        OLF                    77,652                                       77,652          Y
PacifiCorp                                         OLF                   547,200                                      547,200          Y
Public Service of New Mexico                       OLF                 1,415,030                       130,461      1,545,491          Y             130,461
Salt River Project Fringe                          OLF                                    11,067                       11,067                         11,067
San Carlos Indian Irrigation                       OLF                     2,160                                        2,160          Y
Tucson Electric Power Company                      OLF                 1,846,800                                    1,846,800          Y
Unit B Irrigation & Drain                          OLF                       540                                          540          Y
Yuma Cogeneration - Firm                           OLF                   927,504                                      927,504          Y
Yuma Irrigation District                           OLF                                                                      0          Y
Yuma-Mesa                                          OLF                     4,500                                        4,500          Y
Arizona Electric Power Cooperative                 SFP                                       297                          297                            297
AZPS for APS Merchant P-T-P                        SFP                                   705,676                      705,676                        705,676
Barclays Capital                                   SFP                                    24,358                       24,358                         24,358
Cargill-Alliant, LLC                               SFP                                    24,634                       24,634                         24,634
Citigroup Energy, Inc.                             SFP                     5,042          39,879                       44,921                         44,921
Conoco, Inc.                                       SFP                                     1,140                        1,140                          1,140
Constellation Power Source, Inc.                   SFP                                     1,358                        1,358                          1,358
EDF Trading North America, LLC                     SFP                     4,134           4,949                        9,083                          9,083
El Paso Electric Company                           SFP                                       533                          533                            533
Gila River Power                                   SFP                 1,271,459         945,564                    2,217,023                      2,217,023
JP Morgan Ventures Energy Corp.                    SFP                                    14,899                       14,899                         14,899
Macquarie Cook Power Inc.                          SFP                                     2,240                        2,240                          2,240
Morgan Stanley                                     SFP                    45,469          25,011                       70,480                         70,480
PacifiCorp                                         SFP                    27,162          46,594         6,197         79,953                         79,953
Portland General Electric                          SFP                                       968                          968                            968
Powerex                                            SFP                    52,911          45,890                       98,801                         98,801
Public Service of New Mexico                       SFP                                    97,659                       97,659                         97,659
Salt River Project                                 SFP                   261,700          66,028                      327,728                        327,728
Sempra Trading Corp.                               SFP                       258          13,740                       13,998                         13,998
Shell Energy North America                         SFP                                     7,601                        7,601                          7,601
Southern California Edison Co.                     SFP                    16,738          10,115                       26,853                         26,853
TransAlta Energy Marketing                         SFP                    30,128           9,734                       39,862                         39,862
Tucson Electric Power Company                      SFP                   142,347         523,866                      666,213                        666,213
Western Area Power Admin.                          SFP                                         8                            8                              8
Barclays Capital                                   NF                                      9,144                        9,144                          9,144
Cargill-Alliant, LLC                               NF                                      2,806                        2,806                          2,806
Citigroup Energy, Inc.                             NF                                     76,789                       76,789                         76,789
Constellation Power Source, Inc.                   NF                                     12,765                       12,765                         12,765
EDF Trading North America, LLC                     NF                                        135                          135                            135
El Paso Electric Company                           NF                                      2,413                        2,413                          2,413
Florida Power and Light                            NF                                      9,908                        9,908                          9,908
Gila River Power                                   NF                                    165,144                      165,144                        165,144
JP Morgan Ventures Energy Corp.                    NF                     20,886         208,324                      229,210                        229,210
Macquarie Cook Power, L.P.                         NF                                      2,531                        2,531                          2,531
Morgan Stanley                                     NF                      8,267          27,904                       36,171                         36,171
Nevada Power Company                               NF                                      4,238                        4,238                          4,238
Open Access Technology Int'l                       NF                                     41,149                       41,149                         41,149
PacifiCorp                                         NF                                     84,152                       84,152                         84,152
Powerex                                            NF                     15,948         143,980                      159,928                        159,928
Public Service of New Mexico                       NF                                     23,595                       23,595                         23,595
Salt River Project Merchant                        NF                                    141,597                      141,597                        141,597
Sempra Trading Corp                                NF                                      9,170                        9,170                          9,170
Shell Energy North America                         NF                                     10,210                       10,210                         10,210
Southern California Edison Co.                     NF                                     24,268                       24,268                         24,268
TransAlta Energy Marketing                         NF                      1,626          26,400                       28,026                         28,026
Tucson Electric Power Company                      NF                                     82,166                       82,166                         82,166
Yuma Cogeneration Association                      NF                                     29,886                       29,886                         29,886
Imperial Irrigation District                       OS                                                   52,997         52,997                         52,997
Salt River Project Schedule Q                      OS                                                  772,910        772,910                        772,910
Other                                              AD                                                  342,489        342,489                        342,489
Total                                                                 27,720,530       5,889,038     1,344,406    34,953,974                       7,010,963
Account 456.1 (p300,22.b.)                                                                                        34,953,974
Difference (must be zero)                                                                                                 -
Exclude PTP Scheduling from Ancillary Services                                                                                                      (83,722)
Total Revenue Credits                                                                                                                             6,927,241
                                                                                                                                 Page 76 of 77



                                                     Worksheet 5 - Prepaid Items


                                                                                   100%              100%       Gross
                                                                              Non-Transmission   Transmission   Plant       Labor
              Component (5)                BOY          EOY         AVG          Related (1)      Related (2) Related (3) Related (4)
PREPAID POSTAGE                          1,227,098      381,862    804,480                                         804,480
PREPAID INSURANCE                        4,275,611    3,979,518 4,127,565                                        4,127,565
PREPAID INSURANCE                        1,208,312      570,446    889,379                                         889,379
PPD POSTAGE-PERMITS/METERS                 170,213       47,747    108,980                                         108,980
MISC FOSSIL PREPAIDS                             0      428,144    214,072                                         214,072
MISC PREPAIDS                            8,671,454    2,911,064 5,791,259                                        5,791,259
Total Plant Related                     15,552,688    8,318,781 11,935,735                                      11,935,735

POWER MARKETING PREPAIDS                   328,059      360,300     344,180            344,180
PREPAYMENTS-MISC BUSINESS LICE                 381            0         191                191
PPD SOFTWARE MAINT CONTRACTS             2,992,590    2,991,907   2,992,249          2,992,249
REGULATORY COMMISSION EXP-ACC            2,773,454    2,768,397   2,770,926          2,770,926
REGULATORY COMMISSION EXP-RUCO             638,814      896,729     767,772            767,772
NAVAJO PLANT LEASE                         170,352       85,176     127,764            127,764
Acquired Coal Bonuses                    1,247,774    1,143,301   1,195,538          1,195,538
Annual Agency Fees                          30,000      146,250      88,125             88,125
Annual Agency Fees                          25,000            0      12,500             12,500
Annual Agency Fees                          38,698            0      19,349             19,349
Annual Agency Fees                          48,971            0      24,486             24,486
Annual Agency Fees                          26,557            0      13,279             13,279
Annual Agency Fees                          12,667            0       6,334              6,334
Annual Agency Fees                          12,667            0       6,334              6,334
27M COC Loc Annual Fees                          0       99,031      49,516             49,516
500M WF Revolver-Annual Fees                     0        5,000       2,500              2,500
ACC DOCUMENT FEES                            7,700        7,700       7,700              7,700
SROG Water Payment                               0    1,892,847     946,424           946,424
9th St Prepaid Rent Account                      0       16,419       8,210              8,210
Total Non-Transmission Related           8,353,684 10,413,057     9,383,371          9,383,371


Autoxfmr T1591 Transformer - 00101132            0    2,232,191   1,116,096                         1,116,096
Autoxfmr T1595 Transformer - 00101133            0    2,232,191   1,116,096                         1,116,096
Forest Service Agreement                         0       50,000      25,000                            25,000
Wheeling Prepaid Expense                  100,000       100,000     100,000                          100,000
Total Transmission Related                100,000     4,614,382   2,357,191                         2,357,191


Grand Total                             24,006,372 23,346,220 23,676,296             9,383,371      2,357,191 11,935,735           0
                                                                                                                                                                                        Page 77 of 77



ARIZONA PUBLIC SERVICE COMPANY
WORKSHEET - 6 Depreciation Rates
TRANSMISSION DEPRECIATION COMPOSITE RATE AS OF 12-31-2010

company_id                 func_class_id                      depr_group_id                      cor rate     life rate     Total Rate  end_balance           Rate * Bal.           Composite Rate
Arizona Public Service     Transmission Plant - Electric      00 35200 Struc & Improvements             0.10%         1.97%       2.07%          75,079,587            1,554,147
Arizona Public Service     Transmission Plant - Electric      00 35300 Substation Eq, FERC Jur          0.17%         1.92%       2.09%         720,176,193           15,051,682
Arizona Public Service     Transmission Plant - Electric      00 35400 Towers & Fdn, FERC Jur           0.84%         1.16%       1.99%          87,363,533            1,738,534
Arizona Public Service     Transmission Plant - Electric      00 35501 Wood & Oth Poles & Fxt           1.16%         1.57%       2.73%          63,789,980            1,741,466
Arizona Public Service     Transmission Plant - Electric      00 35502 Steel Poles & Fixtures           1.16%         1.57%       2.73%         321,545,618            8,778,195
Arizona Public Service     Transmission Plant - Electric      00 35600 OH Cond & Dev, FERC Jur          0.91%         1.25%       2.16%         360,234,794            7,781,072
Arizona Public Service     Transmission Plant - Electric      00 35700 UG Conduits                      0.10%         2.10%       2.20%          19,936,213               438,597
Arizona Public Service     Transmission Plant - Electric      00 35800 UG Conductors                    0.10%         1.75%       1.85%          27,924,499               516,603

                                                                                                                                              1,676,050,418          37,600,297                 2.24%



* Transmission Composite Rate excludes land & CIAC accounts (zero depr rate).                                                                                                                   0.19%
* Excludes all non-FERC Jurisdictional assets

								
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