PNW · 10-Q · 2026Q3 · Full report

Fuel and Purchased Power Costs

PINNACLE WEST CAPITAL CORP · 2026-11-03 · Importance 54 · Surprise 40

Fuel and purchased power costs were $1.753 billion for the nine months ended September 30, 2026, compared with $1.513 billion a year earlier, an increase of $240 million, or 15.9%. The increase exceeded the company’s stated materiality threshold and more than offset some of the revenue growth. For the three-month period, fuel and purchased power costs rose $102 million, from $656 million to $758 million. The filing attributes the net revenue margin change to retail revenue, weather, LFCR revenue, transmission revenue, fuel and purchased power costs, and regulatory surcharges.

Key facts

• A hypothetical 10% price increase or decrease in natural gas at September 30, 2026 would produce a $58 million loss in the market value of Pinnacle West’s risk management assets and liabilities; the filing states that the economic hedges would substantially offset the physical exposure impact. source
• Pinnacle West’s nine-month non-nuclear generation costs decreased $17 million, primarily due to lower planned outages. source
• Pinnacle West’s energy derivative positions had a mark-to-market balance of negative $52 million at the end of the nine-month period ended September 30, 2026, compared with negative $11 million in 2025. source
• At September 30, 2026, Pinnacle West’s energy derivative fair value totaled negative $52 million, including negative $48 million based on observable external prices and negative $4 million based on unobservable inputs. source
• APS’s 2025 Rate Case proposes a $0.043881 per-kWh base-rate component for fuel and purchased-power costs. source
• Pinnacle West’s third-quarter non-nuclear generation costs decreased $2 million year over year. source
• Pinnacle West’s third-quarter nuclear generation costs increased $3 million year over year. source
• Pinnacle West’s nine-month nuclear generation costs increased $9 million year over year. source