Lines of Credit and Short-Term Borrowings

12 Months Ended

Dec. 31, 2023

Lines of Credit and Short-Term Borrowings

Lines of Credit and Short-Term Borrowings

Lines of Credit and Short-Term Borrowings

Pinnacle West and APS maintain committed revolving credit facilities in order to enhance liquidity and provide credit support for their commercial paper programs, to refinance indebtedness, and for other general corporate purposes.

The table below presents the consolidated credit facilities and the amounts available and outstanding (dollars in thousands): 

	December 31, 2023						December 31, 2022
	Pinnacle West		APS		Total		Pinnacle West		APS		Total
Commitments under Credit Facilities	$	200,000	$	1,250,000	$	1,450,000	$	200,000	$	1,000,000	$	1,200,000
Outstanding short-term borrowings	(76,650)		(532,850)		(609,500)		(15,720)		(325,000)		(340,720)
Amount of Credit Facilities Available	$	123,350	$	717,150	$	840,500	$	184,280	$	675,000	$	859,280
Weighted-Average Commitment Fees	0.170%		0.120%				0.175%		0.125%

Pinnacle West

On April 10, 2023, Pinnacle West replaced its $200 million revolving credit facility that would have matured on May 28, 2026, with a new $200 million revolving credit facility that matures on April 10, 2028. Pinnacle West has the option to increase the amount of the facility up to a total of $300 million upon the satisfaction of certain conditions and with the consent of the lenders. Interest rates are based on Pinnacle West’s senior unsecured debt credit ratings and the agreement includes a sustainability-linked pricing metric which permits an interest rate reduction or increase by meeting or missing targets related to specific environmental and employee health and safety sustainability objectives. The facility is available to support Pinnacle West’s general corporate purposes, including support for Pinnacle West’s $200 million commercial paper program, for bank borrowings or for issuances of letters of credit. At December 31, 2023, Pinnacle West had no outstanding borrowings under its revolving credit facility, no letters of credit outstanding under the credit facility, and $77 million of outstanding commercial paper borrowings. The weighted-average interest rate for the outstanding borrowings on December 31, 2023, was 5.47%.

APS

On April 10, 2023, APS replaced its two $500 million revolving credit facilities that would have matured on May 28, 2026, with a new $1.25 billion revolving credit facility that matures on April 10, 2028. APS has the option to increase the amount of the facility up to a maximum of $400 million, for a total of $1.65 billion, upon the satisfaction of certain conditions and with the consent of the lenders. Interest rates are based on APS’s senior unsecured debt credit ratings and the agreement includes a sustainability-linked pricing metric which permits an interest rate reduction or increase by meeting or missing targets related to specific environmental and employee health and safety sustainability objectives. The facility is available to support APS’s general corporate purposes, including support for APS’s commercial paper program, which was increased from $750 million to $1 billion on April 10, 2023, for bank borrowings or for issuances of letters of credit. At December 31, 2023, APS had no outstanding borrowings under its revolving credit facility, no letters of credit outstanding under the credit facility, and

$533 million of outstanding commercial paper borrowings. The weighted-average interest rate for the outstanding borrowings on December 31, 2023, was 5.46%.

On December 12, 2023, APS entered into an agreement with a new 364-day $350 million term loan facility that matures on December 10, 2024. Borrowings under the facility bear interest at SOFR plus 1.0% per annum. On February 9, 2024, APS drew the full amount of $350 million.

See “Financial Assurances” in Note 10 for a discussion of other outstanding letters of credit.

Debt Provisions

On December 15, 2022, the ACC issued a financing order that, among other things, reaffirmed APS’s short-term debt authorization equal to the sum of (i) 7% of APS’s capitalization, and (ii) $500 million (which is required to be used for costs relating to purchases of natural gas and power). See Note 6 for additional long-term debt provisions.