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DUFF & PHELPS ADDS ARIZONA PUBLIC SERVICE COMPANY TO RATING WATCH -- FAVORABLE

 CHICAGO, Feb. 1 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has added Arizona Public Service Company to Rating Watch -- Favorable. The company's first mortgage bonds are currently rated BBB' (Triple-B) and its preferred stock BBB-' (Triple-B-Minus).
 Based on 1992 results, financial improvements at Arizona Public Service Company appear to be materializing faster than expected. Progress is due primarily to reductions in capital expenditures, refinancings of higher cost debt, sales gains, and cost controls. Significant achievements have been made in controlling operating and maintenance expenditures at the Palo Verde nuclear plant, of which Arizona Public Service is the operator and in which it owns a 29 percent interest. The company will remain on Rating Watch -- Favorable until margin and ratio improvement trends stabilize.
 Management's ability to expand cost control efforts will be especially important, given limited rate relief over the next several years. Other risks include the potential for energy cost increases - since the fuel adjustment clause has been abolished, the longer-term performance of the Palo Verde nuclear plant, and the recovery of deferred debits relating to Palo Verde. The regulatory environment has been restrictive.
 Arizona Public Service Company, the principal subsidiary of Pinnacle West Capital Corporation (NYSE: PNW), provides electric service to approximately 45 percent of the population of Arizona, including most of the Phoenix metropolitan area.
 -0- 02/01/93
 /CONTACT: John C. Dell of Duff & Phelps Credit Rating Co., 312-368-3161/
 (PNW)


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

AH -- NY103 -- 1547 02/01/93 17:09 EST
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Publication:PR Newswire
Date:Feb 1, 1993
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