Pinnacle West Capital (PNW) risk factors, FY2025 10-K

Pinnacle West Capital's FY2025 10-K, filed Feb 25, 2026, lists 26 risk factors in 4 groups. Against the prior year's 29: 1 new, 4 dropped, 10 substantially reworded.

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Risk factors listed
264 groups
New this year
1vs 29 last year
Dropped
4since the prior 10-K
Substantially reworded
10of those kept
Section length
9k wordsItem 1A

What the changes say

  • APS added climate litigation and GHG emission regulation risks.
  • Regulatory competition rules were modified to include customer behind-the-meter technologies.
  • Water supply shortages from the Colorado River remain a highlighted risk.

What changed since the prior 10-K

New

  • NewREGULATORY RISKS

    See “Business of Arizona Public Service Company — Environmental Matters” in Part I, Item 1 as well as Note 14 for examples of environmental laws and regulations and matters that could affect APS’s financial condition, results of operations and cash flows

    APS faces financial and operational risks from climate change litigation, GHG emission regulations, and physical climate impacts.

Dropped

  • DroppedOPERATIONAL RISKS

    in distributed renewable energy programs would result in lower demand since customers would be meeting some of their own energy needs

  • DroppedOPERATIONAL RISKS

    facilities due to vandalism or other deliberate acts that could lead to outages or other adverse effects. If APS’s facilities operate below expectations, especially during its peak seasons, it may lose revenue or incur additional expenses, including increased purchased power expenses

  • DroppedOPERATIONAL RISKS

    We rely extensively on IT systems, networks, and services, including internet sites, data hosting and processing facilities, and other hardware, software and technical applications and platforms. Some of these systems are managed, hosted, provided, or used by third parties to assist in conducting our business

  • DroppedOPERATIONAL RISKS

    acceptance of new technologies could also enable the entry of new market participants, such as technology companies, into the interface between APS and its customers and could have other unpredictable effects on APS’s traditional business model

Reworded

  • 90% rewrittenREGULATORY RISKS

    Deregulation or restructuring of the electric industry and other factors may result in increased competition, which could have a significant adverse impact on APS’s business and its results of operations

    Added customer behind-the-meter installations and large utility-scale generation projects by large customers as increased competition factors alongside ACC retail competition rules.

    Was: Deregulation or restructuring of the electric industry may result in increased competition, which could have a significant adverse impact on APS’s business and its results of operations

  • 85% rewrittenOPERATIONAL RISKS

    We are subject to risk related to cybersecurity, IT systems, and unauthorized access to our systems that could adversely affect our business and financial condition

    The prior year list of specific historical events was removed, keeping the core description of sophisticated threat actors and cybersecurity risks.

    Was: We are subject to cybersecurity risks and risks of unauthorized access to our systems that could adversely affect our business and financial condition

  • 65% rewrittenOPERATIONAL RISKS

    The operation of power generation facilities and transmission systems involves risks that could result in reduced output or unscheduled outages or could otherwise significantly impact APS’s results of operations

    Removed concerns over physical security and damage to assets from the operational risks of generation and transmission facilities.

  • 56% rewrittenOPERATIONAL RISKS

    APS’s results of operations can be adversely affected by various factors impacting demand for electricity

    Removed a sentence about operational challenges from prolonged high temperatures and extreme heat events.

  • 49% rewrittenREGULATORY RISKS

    APS is subject to numerous environmental laws and regulations, and changes in, or liabilities under, existing or new laws or regulations may increase APS’s cost of operations or impact its business plans

    No substantive textual changes were made to the environmental laws and regulations risk.

  • 48% rewrittenOPERATIONAL RISKS

    The inability to successfully develop, acquire or operate generation and transmission facilities to meet future resource needs and load forecasts in accordance with reliability requirements and other new or evolving standards and regulations could adversely impact our business

    Added judicial decisions and executive orders as factors creating strategic challenges in acquiring generation portfolios.

    Was: The inability to successfully develop, acquire or operate generation resources to meet future resource needs and load forecasts in accordance with reliability requirements and other new or evolving standards and regulations could adversely impact our business

  • 43% rewrittenOPERATIONAL RISKS

    The lack of access to sufficient supplies of water could have a material adverse impact on APS’s business and results of operations

    Updated Colorado River water supply language from Tier 1 shortage declarations to general shortage declarations limiting water availability.

  • 36% rewrittenGENERAL RISKS

    General economic conditions could materially affect our business, financial condition, and results of operations

    Added an evaluation statement regarding the impact of recent U.S. policies concerning tariffs and economic factors.

  • 27% rewrittenOPERATIONAL RISKS

    Changes in technology could create challenges for APS’s existing business

  • 23% rewrittenOPERATIONAL RISKS

    We are subject to employee workforce factors that could adversely affect our business and financial condition

All 26 risk factors

Headings as the filing states them, in filing order.

REGULATORY RISKS

  1. 01Our financial condition depends upon APS’s ability to recover costs in a timely manner from customers through regulated rates and otherwise execute its business strategy
  2. 02The operation of APS’s nuclear power plant exposes it to substantial regulatory oversight and potentially significant liabilities and capital expenditures
  3. 03APS is subject to numerous environmental laws and regulations, and changes in, or liabilities under, existing or new laws or regulations may increase APS’s cost of operations or impact its business plans49% rewritten
  4. 04See “Business of Arizona Public Service Company — Environmental Matters” in Part I, Item 1 as well as Note 14 for examples of environmental laws and regulations and matters that could affect APS’s financial condition, results of operations and cash flowsNew
  5. 05Concern over climate change has led to significant legislative and regulatory efforts to limit carbon dioxide, which is a major byproduct of the combustion of fossil fuel, and other GHG emissions
  6. 06Co-owners of our jointly owned generation and transmission facilities may have unaligned goals and positions due to the effects of legislation, regulations, economic conditions, or changes in our industry, which could have a significant impact on our ability to continue operations of such facilities
  7. 07Deregulation or restructuring of the electric industry and other factors may result in increased competition, which could have a significant adverse impact on APS’s business and its results of operations90% rewritten

OPERATIONAL RISKS

  1. 08APS’s results of operations can be adversely affected by various factors impacting demand for electricity56% rewritten
  2. 09The impact of wildfires could negatively affect APS’s results of operations
  3. 10The operation of power generation facilities and transmission systems involves risks that could result in reduced output or unscheduled outages or could otherwise significantly impact APS’s results of operations65% rewritten
  4. 11The inability to successfully develop, acquire or operate generation and transmission facilities to meet future resource needs and load forecasts in accordance with reliability requirements and other new or evolving standards and regulations could adversely impact our business48% rewritten
  5. 12The lack of access to sufficient supplies of water could have a material adverse impact on APS’s business and results of operations43% rewritten
  6. 13We are subject to risk related to cybersecurity, IT systems, and unauthorized access to our systems that could adversely affect our business and financial condition85% rewritten
  7. 14There are inherent risks in the ownership and operation of nuclear facilities, such as environmental, health, fuel supply, spent fuel disposal, regulatory and financial risks and the risk of terrorist attack that could adversely affect our business and financial condition
  8. 15Changes in technology could create challenges for APS’s existing business27% rewritten
  9. 16We are subject to employee workforce factors that could adversely affect our business and financial condition23% rewritten

FINANCIAL RISKS

  1. 17A downgrade of our credit ratings could materially and adversely affect our business, financial condition, and results of operations
  2. 18Our cash flow depends on the performance of APS and its ability to make distributions
  3. 19We may not have adequate insurance coverage for liabilities
  4. 20Pinnacle West’s ability to meet its debt service obligations could be adversely affected because its debt securities are structurally subordinated to the debt securities and other obligations of its subsidiaries
  5. 21The use of derivative contracts in the normal course of our business could result in financial losses that negatively impact our results of operations
  6. 22Financial market disruptions or new rules or regulations may increase our financing costs or limit our access to various financial markets, which may adversely affect our liquidity and our ability to implement our financial strategy

GENERAL RISKS

  1. 23Proposals to change policy in Arizona or other states made through ballot initiatives or referenda may increase the Company’s cost of operations or impact its business plans
  2. 24General economic conditions could materially affect our business, financial condition, and results of operations36% rewritten
  3. 25The market price of our common stock may be volatile
  4. 26Certain provisions of our articles of incorporation and bylaws and of Arizona law make it difficult for shareholders to change the composition of our board and may discourage takeover attempts

Other Pinnacle West Capital 10-Ks

  • FY2024 10-K risk factors
    29 risks

    Pinnacle West operates in a highly regulated utility environment driven by APS rate recovery and environmental mandates.

    Filed Feb 25, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.