SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K
                                 CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


       Date of Report (Date of earliest event reported): December 9, 1998
                                                         ----------------

                        PINNACLE WEST CAPITAL CORPORATION
                        ---------------------------------
             (Exact name of registrant as specified in its charter)


            Arizona                     1-8962                  86-0512431
- --------------------------------------------------------------------------------
(State or other jurisdiction         (Commission              (IRS Employer
      of incorporation)              File Number)         Identification Number)


       400 East Van Buren St., P.O. Box 52132, Phoenix, Arizona       85072-2132
       --------------------------------------------------------       ----------
               (Address of principal executive offices)               (Zip code)



                                 (602) 379-2500
                 ----------------------------------------------
              (Registrant's telephone number, including area code)



                                      NONE
             -------------------------------------------------------
          (Former name or former address, if changed since last report)

ITEM 5.    OTHER EVENTS

         As  previously  reported,  the proposed  settlement  agreement  between
Arizona  Public  Service  Company  ("APS"),  subsidiary of Pinnacle West Capital
Corporation (the "Company"), and the Staff of the Arizona Corporation Commission
(the "ACC") has expired by its terms. See Item 5 of the Company's Current Report
on Form 8-K dated  December 1, 1998. On December 9, 1998,  the ACC Staff filed a
Notice of  Withdrawal  of  Settlements  providing  that the proposed  settlement
agreement has by its terms expired and is deemed withdrawn from consideration by
the ACC. The withdrawal does not preclude the parties from  continuing  attempts
to  resolve  the  issues  addressed  by the  agreement  and  presenting  any new
settlement  to the ACC for  consideration.  The notice  also  provides  that the
procedural order for ACC  consideration of the agreement is no longer in effect.
The Arizona  Supreme Court had  scheduled  oral argument on January 14, 1999, to
consider  whether the  procedural  order gave  sufficient  notice to  interested
parties of the ACC  hearings on the  settlement  agreement.  The Company  cannot
currently predict how the Court will proceed in this matter.

         In connection  with the settlement  agreement,  APS and Tucson Electric
Power  Company  entered  into a  memorandum  of  understanding  ("MOU")  for the
exchange of certain assets. See "State-Proposed  Settlement Agreement" in Note 5
of  Notes  to  Condensed  Consolidated  Financial  Statements  in the  Company's
Quarterly  Report on Form 10-Q for the Fiscal  Quarter ended  September 30, 1998
(the  "September  10-Q").  Pursuant  to the terms of the MOU, if there is no ACC
order  approving a settlement  agreement  by December 15, 1998,  or an agreement
between the parties to extend this deadline, the MOU will expire.

         On December 10,  1998,  the ACC adopted,  without  modifications  which
would  have a  significant  impact  on APS,  the  amended  rules  regarding  the
introduction  of  retail  electric  competition  which  became  effective  on an
emergency  basis in August  1998.  See  "State-ACC  Rules" in Note 5 of Notes to
Condensed  Consolidated Financial Statements in the September 10-Q. However, due
to the Supreme Court stay, the Notice of Withdrawal and other unresolved issues,
the amended rules cannot be practically implemented.

         In April 1998, APS and Salt River Project Agricultural  Improvement and
Power District ("Salt River Project")  entered into a memorandum of agreement in
anticipation  of,  and  to  facilitate,  the  opening  of the  Arizona  electric
industry.  See Note 7 of Notes to Condensed Consolidated Financial Statements in
the September 10-Q.  Certain  provisions of the agreement may be affected by the
timing of the introduction of competition.

                                   SIGNATURES



         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Company  has duly  caused  this  report to be  signed on its  behalf by the
undersigned hereunto duly authorized.



                                        PINNACLE WEST CAPITAL CORPORATION
                                                  (Registrant)




Dated:   December 11, 1998              By:  Michael V. Palmeri
                                             -----------------------------------
                                             Michael V. Palmeri
                                             Treasurer