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DUFF & PHELPS: ARIZONA PUBLIC SERVICE COMPANY NEW COMMERCIAL PAPER PROGRAM RATED DUFF 2

 CHICAGO, Nov. 15 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a rating of Duff 2 (Two) to Arizona Public Service Company's (APS) new $250 million commercial paper program. The program is supported by a $300 million revolving bank credit agreement. This program replaces APS' previous commercial paper program, which was backed by a letter of credit from Union Bank of Switzerland. Thus, the previous Duff 1+ (One-Plus) rating is withdrawn.
 APS has benefited from aggressive cost control measures and an active refinancing and debt reduction program. Gradual improvement in APS' financial profile is expected. Management is committed to improving the company's financial health. Continued retention of earnings is expected, with little or no near-term growth in dividends to parent Pinnacle West Capital Corporation.
 Arizona Public Service's analysis of steam generator tube degradation at the Palo Verde Nuclear Generating Station continues. Unit 2 was removed from service for an extended period earlier this year due to a steam generator tube rupture. Recently announced preventative measures include plans to shut down Unit 3 for inspection mid-cycle and to operate all three units at 85 percent power well into 1994. The company will incur additional fuel and purchased power costs as a result of these actions. Cost cutting measures planned for 1994 and beyond may somewhat offset these costs. Continued restraint of costs and successful operation of the Palo Verde nuclear units will be important to maintenance of the company's credit protection measures.
 Arizona Public Service Company, the principal subsidiary of Pinnacle West Capital Corporation, provides electric service to approximately 45 percent of the population of Arizona, including major portions of the Phoenix metropolitan area. The company is the operator of the Palo Verde Nuclear Generating Station and owns a 29 percent interest in the plant.
 -0- 11/15/93
 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/


CO: Arizona Public Service Company ST: Arizona IN: UTI SU: RTG

MP -- NY096 -- 4519 11/15/93 14:12 EST
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Publication:PR Newswire
Date:Nov 15, 1993
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