Pinnacle West Capital (NYSE:PNW) reported second-quarter 2026 earnings of $1.43 per share, down $0.15 from the same period a year earlier, as higher interest expense, depreciation and amortization, and lower transmission revenue more than offset strong weather-driven demand and customer growth.
Chief Financial Officer Andrew Cooper said the company expects to finish 2026 at the top end of its previously issued earnings guidance range of $4.55 to $4.75 per share. The utility reiterated all other aspects of its outlook.
Sales Growth Remains Strong
Weather-normalized sales increased 9.6% year over year in the second quarter, while customer growth reached 2.1%. Cooper said hotter conditions, including an early start to triple-digit temperatures in the Phoenix area, supported cooling demand during the period.
Residential sales rose 5.6%, while commercial and industrial sales increased 12.7%, driven by expansion among data center, semiconductor and other advanced-manufacturing customers. Cooper said the quarter’s growth was diversified across residential and commercial customer categories.
The company did not raise its 2026 sales-growth guidance, though Cooper said year-to-date weather-normalized sales growth has been tracking closer to Pinnacle West’s longer-term outlook. The company’s long-term guidance calls for total sales growth of 5% to 7% through 2030, including 4% to 6% growth for large commercial and industrial customers.
Geisler said Taiwan Semiconductor Manufacturing Co.’s existing facilities had a relatively flat year-over-year impact on sales so far, with the bulk of that customer’s anticipated demand growth still ahead. He said recent sales growth instead reflects a combination of residential demand, other manufacturers, small and medium-sized businesses, and data centers beginning to occupy facilities.
On Aug. 2, Arizona Public Service, Pinnacle West’s utility subsidiary, recorded an all-time peak demand of 9,164 megawatts, more than 500 megawatts above the prior-year record, according to Geisler.
TSMC Expansion and Resource Planning
TSMC announced an additional $100 billion investment in Arizona during the quarter, raising its total planned commitment in the state to $265 billion. The company now plans up to 12 advanced fabrication and packaging facilities in north Phoenix, as well as a research-and-development campus, Geisler said.
Pinnacle West is working with TSMC to determine the additional investment’s implications for electric capacity needs and the timing of demand ramp-up. Cooper said the utility’s integrated resource plan, now expected to be filed by the end of October, will include the company’s latest view of TSMC’s full planned build-out along with other committed load growth.
The utility has identified 4.5 gigawatts of committed large commercial and industrial load growth. Geisler said the forthcoming resource plan is expected to provide the company’s first detailed view of the timing of that demand ramp and the resources needed to serve it.
Pinnacle West delayed the integrated resource plan filing from August to October to incorporate the latest developments involving TSMC, customer-demand trends and the planned Cholla plant conversion, Geisler said.
Cholla Conversion and Transmission Investment
The company recently announced plans to convert two retired coal-fired units at its Cholla Power Plant to natural gas. The project is expected to provide about 380 megawatts of dispatchable generation by 2029. Cooper said the project could add up to approximately $440 million of capital investment, primarily in 2027 and 2028, and is not included in the company’s current capital-expenditure outlook.
Geisler said the company believes its existing natural-gas supply can support operations through the end of the decade. Pinnacle West has contracted for capacity from the proposed Desert Southwest pipeline, which it expects to be important for supporting expansion in the following decade. The project is in early development, and Geisler said it is proceeding on schedule.
The utility is also increasing transmission investment to improve system resilience, connect to more distant resources and support customer growth. Cooper pointed to a potential multibillion-dollar transmission project connecting the Four Corners region, Cholla and the Phoenix load area. He said the company is focusing on projects eligible for recovery through its Federal Energy Regulatory Commission formula rate and Arizona transmission adjuster.
Rate Case and Financing Actions
Pinnacle West concluded 31 days of hearings in its Arizona rate case on July 7 and has entered the briefing phase. Initial briefs are due Aug. 27, followed by reply briefs on Sept. 11. The company expects an administrative law judge’s recommended opinion and order later this year, followed by a final Arizona Corporation Commission decision before year-end.
Geisler said the hearing created a strong evidentiary record, particularly regarding the company’s request for a sustainable cost-recovery framework intended to address regulatory lag.
On financing, Cooper said Pinnacle West used the remaining capacity under its existing $900 million at-the-market equity program and filed a new $500 million ATM program to provide further funding flexibility. During the second quarter, the company also issued $500 million of senior unsecured notes to refinance maturing notes and support its funding strategy.
Second-quarter operations and maintenance expense declined modestly from a year earlier. However, higher debt balances and interest rates increased interest expense, while depreciation and amortization rose as the Agave, Ironwood and Sundance investments entered service. Transmission revenue declined in the quarter largely because of a final true-up adjustment related to 2025, Cooper said.
About Pinnacle West Capital (NYSE:PNW)
Pinnacle West Capital Corporation is a publicly traded utility holding company headquartered in Phoenix, Arizona. Through its principal subsidiary, Arizona Public Service Company (APS), Pinnacle West generates, transmits and distributes electricity to more than one million residential, commercial and industrial customers across central and southern Arizona. The company’s regulated operations focus on delivering safe, reliable power while meeting evolving environmental standards.
The company’s diversified generation portfolio includes natural gas–fired plants, the nuclear-powered Palo Verde Generating Station—the largest nuclear facility in the United States by net output—plus growing investments in solar and battery storage projects.
