Pinnacle West raises 2026 earnings outlook as electricity sales grow 9.5% in third quarter
Key Facts
Pinnacle West Capital raised its 2026 earnings outlook, supported by growth in customer sales and usage, favorable weather effects and customer growth, the company said on November 3. Third-quarter results showed higher electricity sales at Arizona Public Service (APS), with weather-adjusted retail sales up 9.5% year over year. The company said higher sales and usage, along with more favorable weather than in the same period a year earlier, helped lift quarterly results from the prior year. The figures put demand growth in Arizona at the center of Pinnacle West’s performance, while the company’s ability to continue spending on the grid depends on financing investments and recovering their costs. The company had scheduled its third-quarter results for before the U.S. market open on November 3, followed by a live webcast and investor call at 11 a.m. Eastern time that day.
APS sales growth was spread across its segments, with commercial and industrial sales up 14.5% in the third quarter, compared with a 4.5% increase in residential sales. The two segments helped lift weather-adjusted retail sales growth to 9.5%, according to the company’s statement. The increase in commercial and industrial sales is significant as demand for electricity from large customers expands alongside residential consumption. Adjusting sales for weather means the comparison focuses on changes in usage apart from temperature fluctuations. Pinnacle West attributed the improvement in quarterly results mainly to higher customer sales and usage, the positive effect of weather compared with the same period a year earlier, and customer growth.
Sales expanded as APS customers set a record peak demand of 9,166 megawatts on August 2, 2026, the company said. The level points to the pressure on the power system at peak times as loads continue to grow in Arizona. The APS chief executive said the company would not connect new customers with very large loads to the grid faster than system reliability allows. He added that those customers would bear the cost of the infrastructure needed to serve them, saying: "When a data center or factory comes to Arizona, it pays for the infrastructure needed to serve it." The approach links the recruitment of large customers to covering the cost of connecting them, as rising demand requires grid expansion and continued reliability.
Pinnacle West plans estimated capital spending of $10.35 billion during 2025–2028, according to company data. The figure excludes costs to convert the Cholla plant to gas or any additional spending tied to the direct pricing contract. The scale of the plan puts grid investment among the considerations accompanying electricity sales growth and rising peak demand. It also makes infrastructure financing and the allocation of its costs to customers issues tied to expansion, particularly when serving large facilities with high loads. The company said new customers with large loads would bear the cost of the infrastructure needed to provide them with service.
The operational drivers identified by the company are the combination of sales and usage growth, weather and customer growth, which it said lifted third-quarter results above the year-earlier level. Growth in commercial and industrial sales, alongside the weather-adjusted measure, offers a picture of expanding demand across different customer segments. At the same time, the pace of connecting large loads remains subject to grid reliability, according to the APS chief executive, and those facilities bear the cost of the infrastructure needed to serve them. These factors combine revenue-base growth with the investment requirements that accompany meeting demand. The company will release its results before the market opens on November 3, with the webcast and call scheduled for 11 a.m. Eastern time on the same date.