                                                                     Exhibit 3.2

                                     BYLAWS
                                       OF
                         ARIZONA PUBLIC SERVICE COMPANY
                       (AMENDED AS OF SEPTEMBER 18, 2002)


                            I. REFERENCES; SENIORITY

     1.01. REFERENCES.  Any reference herein made to law will be deemed to refer
to the law of the  State of  Arizona,  including  any  applicable  provision  or
provisions of Chapters 1-17 and Chapter 23 of Title 10, Arizona Revised Statutes
(or its successor), as at any given time in effect. Any reference herein made to
the Articles will be deemed to refer to the  applicable  provision or provisions
of the Articles of Incorporation of the Company,  and all amendments thereto, as
at any  given  time  on file  with  the  Arizona  Corporation  Commission  (this
reference  to that  Commission  being  intended to include any  successor to the
incorporating  and related  functions  being performed by that Commission at the
date of the initial adoption of these Bylaws).

     1.02. SENIORITY. Except as indicated in Part X of these Bylaws, the law and
the Articles (in that order of  precedence)  will in all respects be  considered
senior and superior to these Bylaws,  with any  inconsistency  to be resolved in
favor of the law and the Articles (in that order of precedence),  and with these
Bylaws to be deemed  automatically  amended from time to time to  eliminate  any
such inconsistency which may then exist.

     1.03.  SHAREHOLDERS  OF RECORD.  Except as  otherwise  required  by law and
subject to any procedure  established by the Company pursuant to Arizona Revised
Statutes  Section  10-723  (or any  comparable  successor  provision),  the word
"shareholder"  as used herein shall mean one who is a holder of record of shares
in the Company.

                            II. SHAREHOLDERS MEETINGS

     2.01. ANNUAL MEETINGS.  An annual meeting of shareholders shall be held for
the election of directors at such date, time and place, either within or without
the  State of  Arizona,  as may be  designated  by  resolution  of the  Board of
Directors from time to time. Any other proper  business may be transacted at the
annual  meeting.  A special  meeting may be called and held in lieu of an annual
meeting  pursuant  to the  provisions  of  Section  2.02  below,  and  the  same
proceedings (including the election of directors) may be conducted thereat as at
a regular  meeting.  Any  director  elected  at any annual  meeting,  or special
meeting in lieu of an annual meeting, will continue in office until the election
of his or her successor,  subject to his or her (a) earlier resignation pursuant
to Section 6.01 below,  (b) removal pursuant to Section 3.12 below, or (c) death
or disqualification.

     2.02.  SPECIAL  MEETINGS.  Except as  otherwise  required  by law,  special
meetings of the  shareholders  may be held  whenever and wherever  called by the
Chairman of the Board, the President, or a majority of the Board of Directors. A
special  meeting of  shareholders  shall also be called by the  President or the
Secretary  at the  written  request  of the  holder or  holders of not less than
seventy-five  percent (75%) of all outstanding  votes entitled to be cast on any
matter to be voted on at the meeting.  Any such written  request by shareholders
<PAGE>
shall state the purpose or purposes of the proposed meeting,  and business to be
transacted at any such meeting  shall be confined to the purposes  stated in the
notice thereof and to such additional matters as the chairman of the meeting may
rule to be germane to such purposes.

     2.03.  NOTICE.  Notice of any meeting of the shareholders  will be given as
provided by law to each  shareholder  entitled to vote at such  meeting  and, if
required by law, to each other  shareholder of the Company.  Any such notice may
be waived as provided by law.

     2.04.  RIGHT TO VOTE.  For each meeting of the  shareholders,  the Board of
Directors  will fix in advance a record  date as  contemplated  by law,  and the
shares of stock and the shareholders  "entitled to vote" (as that or any similar
term is herein used) at any meeting of the shareholders will be determined as of
the  applicable  record  date.  If no  record  date is so fixed by the  Board of
Directors,  the  record  date  for  determination  of  shareholders  shall be as
provided by law. The Secretary (or in his or her absence an Assistant Secretary)
will see to the making and production of any record of shareholders  entitled to
vote or otherwise  entitled to notice of shareholders  meetings,  in either case
which is required by law. Any voting entitlement may be exercised through proxy,
or in such other manner as specifically  provided by law, in accordance with the
applicable  law. In the event of contest,  the burden of proving the validity of
any undated or  irrevocable  proxy will rest with the person seeking to exercise
the same. A telegram, cablegram, or facsimile appearing to have been transmitted
by a shareholder  (or by his or her duly authorized  attorney-in-fact)  or other
means of voting by telephone  or  electronic  transmission  may be accepted as a
sufficiently written and executed proxy if otherwise permitted by law.

     2.05. RIGHT TO ATTEND.  Except only to the extent of persons  designated by
the Board of  Directors  or the Chairman of the meeting to assist in the conduct
of the  meeting (as  referred to in Sections  2.07 and 2.08 below) and except as
otherwise  permitted  by the Board or such  Chairman,  the  persons  entitled to
attend any meeting of shareholders may be confined to (i) shareholders  entitled
to vote  thereat  and other  shareholders  entitled to notice of the meeting and
(ii) the persons upon whom  proxies  valid for purposes of the meeting have been
conferred or their duly appointed  substitutes  (if the related proxies confer a
power of substitution);  provided,  however,  that the Board of Directors or the
Chairman of the  meeting  may  establish  rules  limiting  the number of persons
referred  to in  clause  (ii) as being  entitled  to  attend  on  behalf  of any
shareholder so as to preclude such an excessively  large  representation of such
shareholder  at the meeting as, in the  judgment of the Board or such  Chairman,
would be unfair to other  shareholders  represented  at the meeting or be unduly
disruptive  of the orderly  conduct of business at such  meeting  (whether  such
representation would result from fragmentation of the aggregate number of shares
held by such shareholder for the purpose of conferring proxies,  from the naming
of an excessively  large proxy delegation by such shareholder or from employment
of any other  device).  A person  otherwise  entitled to attend any such meeting
will cease to be so entitled if, in the judgment of the Chairman of the meeting,
such person engages thereat in disorderly conduct impeding the proper conduct of
the meeting in the interests of all shareholders as a group.

     2.06.  QUORUM.  Except as otherwise  provided by law, the Articles or these
Bylaws,  at each meeting of  shareholders  the presence in person or by proxy of
the holders of a majority  in voting  power of the  outstanding  shares of stock

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entitled to vote at the meeting shall be necessary and  sufficient to constitute
a quorum.

     2.07.  ELECTION  INSPECTORS.  The Board of  Directors,  in  advance  of any
shareholders  meeting may appoint an election  inspector or inspectors to act at
such  meeting  (and  any  adjournment  thereof).  If an  election  inspector  or
inspectors  are not so  appointed,  the Chairman of the meeting may or, upon the
request  of  any  person  entitled  to  vote  at the  meeting  will,  make  such
appointment.  If any person appointed as an inspector fails to appear or to act,
a substitute may be appointed by the Chairman of the meeting. If appointed,  the
election  inspector or inspectors (acting through a majority of them if there be
more  than  one)  will   determine  the  number  of  shares   outstanding,   the
authenticity,  validity  and  effect of  proxies,  the  credentials  of  persons
purporting to be  shareholders  or persons named or referred to in proxies,  and
the number of shares  represented  at the  meeting in person and by proxy;  they
will  receive and count  votes,  ballots and  consents  and announce the results
thereof; they will hear and determine all challenges and questions pertaining to
proxies and  voting;  and, in  general,  they will  perform  such acts as may be
proper  to  conduct   elections  and  voting  with  complete   fairness  to  all
shareholders. No such election inspector need be a shareholder of the Company.

     2.08.  ORGANIZATION AND CONDUCT OF MEETINGS. Each shareholders meeting will
be called to order and thereafter  chaired by the Chairman of the Board if there
then is one;  or,  if not,  or if the  Chairman  of the  Board is  absent  or so
requests,  then by the  President;  or if both the Chairman of the Board and the
President  are  unavailable,  then by such other  officer of the Company or such
shareholder as may be appointed by the Board of Directors.  The Secretary (or in
his or her absence an Assistant  Secretary) of the Company will act as secretary
of  each  shareholders  meeting;  if  neither  the  Secretary  nor an  Assistant
Secretary is in  attendance,  the Chairman of the meeting may appoint any person
(whether a  shareholder  or not) to act as secretary  thereat.  After  calling a
meeting to order,  the  Chairman  thereof may require  the  registration  of all
shareholders  intending to vote in person,  and the filing of all proxies,  with
the election inspector or inspectors, if one or more have been appointed (or, if
not,  with the  secretary of the  meeting).  After the  announced  time for such
filing of proxies has ended,  no further  proxies or changes,  substitutions  or
revocations  of proxies will be  accepted.  If  directors  are to be elected,  a
tabulation of the proxies so filed will, if any person  entitled to vote in such
election so requests, be announced at the meeting (or adjournment thereof) prior
to the closing of the election polls.

     Absent a showing of bad faith on his or her part, the Chairman of a meeting
will,  among other  things,  have  absolute  authority to determine the order of
business to be conducted at such meeting and to establish rules for, and appoint
personnel to assist in,  preserving  the orderly  conduct of the business of the
meeting  (including  any informal,  or question and answer,  portions  thereof).
Rules,  regulations  or  procedures  regarding  the conduct of the business of a
meeting, whether adopted by the Board of Directors or prescribed by the Chairman
of the  meeting,  may  include,  without  limitation,  the  following:  (i)  the
establishment of an agenda or order of business for the meeting;  (ii) rules and
procedures for maintaining order at the meeting and the safety of those present;
(iii)   limitations  on  attendance  at  or  participation  in  the  meeting  to
shareholders  of record of the Company,  their duly  authorized and  constituted
proxies  (subject to Section  2.05) or such other persons as the Chairman of the
meeting shall  determine;  (iv)  restrictions  on entry to the meeting after the
time  fixed  for the  commencement  thereof;  and (v)  limitations  on the  time

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allotted to  questions  or comments  by  participants.  Unless and to the extent
determined by the Board of Directors or the Chairman of the meeting, meetings of
shareholders  shall not be required to be held in  accordance  with the rules of
parliamentary   procedure.  Any  informational  or  other  informal  session  of
shareholders conducted under the auspices of the Company after the conclusion of
or otherwise in conjunction with any formal business meeting of the shareholders
will be chaired by the same  person  who  chairs  the  formal  meeting,  and the
foregoing  authority  on his or her part  will  extend  to the  conduct  of such
informal session.

     2.09.  VOTING.  The number of shares  voted on any matter  submitted to the
shareholders  which is required to constitute  their action  thereon or approval
thereof will be determined in accordance with applicable law, the Articles,  and
these Bylaws, if applicable.  No ballot or change of vote will be accepted after
the polls have been declared  closed  following the ending of the announced time
for voting.

     2.10.  SHAREHOLDER  APPROVAL OR  RATIFICATION.  The Board of Directors  may
submit any contract or act for approval or ratification at any duly  constituted
meeting of the shareholders,  the notice of which either includes mention of the
proposed  submittal  or is waived as provided in Section  2.03 above.  Except as
otherwise  required by law (e.g.,  Arizona Revised Statutes Section 10-863),  if
any  contract or act so  submitted  is approved or ratified by a majority of the
votes cast thereon at such  meeting,  the same will be valid and as binding upon
the Company and all of its  shareholders as it would be if approved and ratified
by each and every shareholder of the Company.

     2.11.  ADJOURNMENTS.  Any meeting of shareholders,  annual or special,  may
adjourn  from time to time to  reconvene  at the same or some other  place,  and
notice  need not be given of any such  adjourned  meeting  if the time and place
thereof are announced at the meeting at which the  adjournment is taken.  At the
adjourned  meeting the Company may transact  any  business  that might have been
transacted  at the original  meeting.  If the  adjournment  is for more than one
hundred and twenty days, or if after the  adjournment a new record date is fixed
for the adjourned  meeting,  notice of the  adjourned  meeting shall be given to
each shareholder of record entitled to vote at the meeting.

     2.12.  SHAREHOLDER  ACTION BY  WRITTEN  CONSENT.  Any  action  required  or
permitted to be taken at a meeting of the  shareholders  may be taken  without a
meeting if one (1) or more  consents  in  writing,  setting  forth the action so
taken, shall be signed by all of the shareholders  entitled to vote with respect
to the subject  matter  thereof.  The consents shall be delivered to the Company
for inclusion in the minutes or filing with the Company's records.  Action taken
by consent is effective when the last shareholder signs the consent,  unless the
consent specifies a different effective date, except that if, by law, the action
to be taken requires that notice be given to  shareholders  who are not entitled
to vote on the matter,  the  effective  date shall not be prior to ten (10) days
after the Company shall give such  shareholders  written  notice of the proposed
action,  which notice shall contain or be  accompanied by the same material that
would have been  required if a formal  meeting  had been called to consider  the
action. A consent signed under this section has the effect of a meeting vote and
may be described as such in any document.

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                             III. BOARD OF DIRECTORS

     3.01.  MEMBERSHIP AND  QUALIFICATION.  The Board of Directors will have the
exclusive  power to increase or decrease its size within the limits fixed in the
Articles (Art. Fifth). Any vacancy occurring in the Board,  whether by reason of
death,  resignation,  disqualification  or  otherwise,  may  be  filled  by  the
directors as contemplated  by law and as provided in the Articles (Art.  Fifth).
Any such  increase  in the size of the Board,  and the  filling  of any  vacancy
created  thereby,  will require action by a majority of the whole  membership of
the Board as  comprised  immediately  before  such  increase.  A person will not
qualify for  election or  appointment  as a director,  whether  initially  or on
re-election  and whether by the  shareholders  at their annual meeting or by the
Board of Directors as  contemplated  in this Section 3.01, if such person's 70th
birthday occurs on or has occurred before the date of such election, appointment
or re-election. A person who has been a full-time employee of the Company within
twelve months prior to the date of any election will not qualify for election as
a director  on that date unless he or she then  remains a full-time  employee of
the  Company  or  unless  the Board of  Directors  specifically  authorizes  the
election of such person (but it is not intended that any such authorization will
extend a person's  service on the Board beyond the age limitation set out in the
preceding sentence).  A person who has qualified by age or employment status for
his or her most recent election as a director may serve  throughout the term for
which such person was elected, notwithstanding the occurrence of his or her 70th
birthday or cessation of full-time employment by the Company between the date of
such  election  and  the  end of  such  term,  subject,  however,  to his or her
otherwise remaining qualified for such office.

     3.02. REGULAR MEETINGS.  A regular annual meeting of the directors is to be
held as soon as practicable  after the  adjournment of each annual  shareholders
meeting either at the place of the  shareholders  meeting or at such other place
as the directors  elected at the shareholders  meeting may have been informed of
at or before the time of their election. Regular meetings, other than the annual
ones,  may be held at such  intervals  at such  places  and at such times as the
Board of Directors may provide.

     3.03.  SPECIAL MEETINGS.  Special meetings of the Board of Directors may be
held  whenever  and  wherever  called  for by the  Chairman  of the  Board,  the
President  or the number of  directors  which would be required to  constitute a
quorum.

     3.04.  NOTICE.  No notice need be given of regular meetings of the Board of
Directors.  Notice of the time and place (but not necessarily the purpose or all
of the purposes) of any special meeting will be given to each director in person
or  by  telephone,  or  via  mail,  telegram,  facsimile,  or  other  electronic
transmission addressed in the manner appearing on the Company's records.  Notice
to any director of any such special meeting will be deemed given sufficiently in
advance when (i) if given by mail,  the same is  deposited in the United  States
mail at least four days before the meeting date, with postage  thereon  prepaid,
(ii) if given by telegram,  the same is delivered  to the  telegraph  office for
fast transmittal at least 48 hours prior to the convening of the meeting,  (iii)
if given by facsimile or other electronic transmission,  the same is received by
the  director or an adult  member of his or her office  staff or  household,  at
least 24 hours prior to the  convening  of the  meeting,  or (iv) if  personally
delivered or given by telephone, the same is handed, or the substance thereof is
communicated  over the telephone to the director or to an adult member of his or
her office staff or  household,  at least 24 hours prior to the convening of the

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meeting.  Any such notice may be waived as provided by law. No call or notice of
a meeting of  directors  will be  necessary  if each of them  waives the same in
writing or by attendance.  Any meeting,  once properly called and noticed (or as
to which call and notice have been waived as aforesaid) and at which a quorum is
formed,  may be  adjourned  to another  time and place by a majority of those in
attendance.

     3.05.  QUORUM;  VOTING.  A quorum for the  transaction  of  business at any
meeting or  adjourned  meeting of the  directors  will  consist of a majority of
those then in office. Any matter submitted to a meeting of the directors will be
resolved by a majority of the votes cast thereon,  except as otherwise  required
by these Bylaws (ss. 3.01 above and ss. 3.06 below), by law or by any applicable
Article.  However,  in case of an equality of votes, the Chairman of the meeting
will have a second or  deciding  vote.  Where  action by a majority of the whole
membership is required,  such requirement will be deemed to relate to a majority
of the  directors in office at the time the action is taken.  In  computing  any
such majority,  whether for purposes of determining  the presence of a quorum or
the adequacy of the vote on any proposed action,  any unfilled  vacancies at the
time  existing  in the  membership  of the  Board  will  be  excluded  from  the
computation.

     3.06.  EXECUTIVE  COMMITTEE.  The Board of  Directors  may,  by  resolution
adopted by a majority of the whole  Board,  name three or more of its members as
an Executive Committee.  Such Executive Committee will have and may exercise the
powers of the Board of Directors in the  management  of the business and affairs
of the Company  while the Board is not in session,  except only as  precluded by
law or where  action  other than by a majority  of the votes cast is required by
these Bylaws, or the law (all as referred to in Section 3.05 above), and subject
to such limitations as may be included in any applicable  resolution passed by a
majority of the whole  membership of the Board. A majority of those named to the
Executive Committee will constitute a quorum.

     3.07.  OTHER  COMMITTEES.  The Board of Directors may designate one or more
additional committees, each committee to consist of one or more of the directors
of the Company.  The Board of Directors may  designate one or more  directors as
alternate  members of any committee,  who may replace any absent or disqualified
member at any  meeting  of the  committee.  Any such  committee,  to the  extent
permitted by law and to the extent  provided in the  resolution  of the Board of
Directors, shall have and may exercise all the powers and authority of the Board
of Directors in the  management of the business and affairs of the Company,  and
may  authorize  the seal of the  Company to be  affixed  to all papers  that may
require it.

     3.08.  COMMITTEE  FUNCTIONING.  Notice  requirements  (and  related  waiver
provisions) for meetings of the Executive  Committee and other committees of the
Board will be the same as those set forth in Section  3.04 above for meetings of
the Board of Directors. Except as provided in the next two succeeding sentences,
a majority of those named to the Executive  Committee or any other  committee of
the Board will  constitute a quorum at any meeting  thereof  (with the effect of
departure of committee  members from a meeting and the computation of a majority
of committee members to be in accordance with the applicable policies of Section
3.05 above), and any matter submitted to a meeting of any such committee will be
resolved by a majority of the votes cast thereon.  No  distinction  will be made
among  ex-officio or other members of any such  committee for quorum,  voting or
other  purposes,  except that the  membership  of any committee  (including  the

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Executive  Committee),  in  performing  any  function  vested  in it  as  herein
contemplated,  may be deemed to exclude any officer or employee of the  Company,
in either case, or other person,  having a direct or indirect  personal interest
in any proposed  exercise of such function,  whose exclusion for that purpose is
deemed  appropriate  by a  majority  of the  other  members  of  such  committee
proposing to perform such function.  All committees are to keep regular  minutes
of the transactions of their meetings.

     3.09.  ACTION BY  TELEPHONE  OR  CONSENT.  Any  meeting of the Board or any
committee thereof may be held by conference telephone or similar  communications
equipment as permitted by law in which case any required  notice of such meeting
may generally describe the arrangements  (rather than the place) for the holding
thereof,  and all other provisions herein contained or referred to will apply to
such meeting as though it were  physically  held at a single  place.  Action may
also be taken by the Board or any  committee  thereof  without a meeting  if the
members thereof consent in writing thereto as contemplated by law.

     3.10.  PRESUMPTION OF ASSENT. A director of the Company who is present at a
meeting of the Board of Directors,  or of any committee when corporate action is
taken is deemed to have  assented  to the  action  taken  unless  either (i) the
director  objects at the beginning of the meeting or promptly on the  director's
arrival  to  holding  it or  transacting  business  at  the  meeting;  (ii)  the
director's dissent or abstention from the action taken is entered in the minutes
of the meeting;  or (iii) the director delivers written notice of the director's
dissent  or  abstention  to the  presiding  officer  of the  meeting  before its
adjournment  or to the Company  before 5:00 P.M. on the next  business day after
the meeting.  The right of dissent or  abstention is not available to a director
who votes in favor of the action taken.

     3.11.  COMPENSATION.  By resolution of the Board, the directors may be paid
their expenses, if any, of attendance at each meeting of the Board of Directors,
or of any  committee,  and may be paid a fixed sum for  attendance  at each such
meeting  and/or a stated  salary as a  director  or  committee  member.  No such
payment  will  preclude  any  director  from  serving  the  Company in any other
capacity and receiving compensation therefor.

     3.12. REMOVAL. Any director or the entire Board of Directors may be removed
with or without cause, only at a special meeting of shareholders called for that
purpose,  by the affirmative vote of sixty-six and two-thirds  percent (66 2/3%)
of the  issued and  outstanding  shares of stock  then  entitled  to vote on the
election of directors, except that if less than the entire Board of Directors is
to be removed,  no one of the directors may be removed if the votes cast against
the  director's  removal  would be  sufficient  to elect  the  director  if then
cumulatively  voted at an  election  for the  class of  directors  of which  the
director is a part.

                             IV. OFFICERS - GENERAL

     4.01. ELECTIONS AND APPOINTMENTS. The directors may elect or appoint one or
more of the  officers  of the  Company  contemplated  in Part V below.  Any such
election or  appointment  will regularly take place at the annual meeting of the
directors,  but  elections of officers  may be held at any other  meeting of the
Board.  A person  elected or appointed to any office will  continue to hold that
office until the election or  appointment  of his or her  successor,  subject to
action earlier taken pursuant to Section 4.04 or 6.01 below. Any person may hold
more than one office.

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     4.02. ADDITIONAL APPOINTMENTS.  In addition to the officers contemplated in
Part V below, the Board of Directors may create other corporate  positions,  and
appoint  persons  thereto,  with such authority to perform such duties as may be
prescribed  from time to time by the Board of Directors,  by the President or by
the superior officer of any person so appointed. Notwithstanding such additional
appointments, only those persons whose offices are described in Part V are to be
considered an officer of the Company unless the resolution or other Board action
appointing such person  expressly states that such person is to be considered an
officer of the  Company.  Each of such persons (in the order  designated  by the
Board or the  superior  officer of such  person)  will be vested with all of the
powers and charged with all of the duties of his or her superior  officer in the
event of such superior officer's absence or disability.

     4.03. BONDS AND OTHER REQUIREMENTS.  The Board of Directors may require any
officer or other appointee to give bond to the Company (with sufficient  surety,
and conditioned upon the faithful performance of the duties of his or her office
or position)  and to comply with such other  conditions as may from time to time
be required of him or her by the Board.

     4.04.  REMOVAL  OR  DELEGATION.  Provided  that a  majority  of  the  whole
membership  thereof  concurs  therein,  the Board of  Directors  may  remove any
officer  of the  Company as  provided  by law and  declare  his or her office or
offices  vacant or abolished or, in the case of the absence or disability of any
officer or for any other reason considered sufficient,  may temporarily delegate
his or her powers and duties to any other  officer or to any  director.  Similar
action may be taken by the Board of Directors in regard to appointees designated
pursuant to Section 4.02 above.

     4.05.  SALARIES.  Officer  salaries  may from  time to time be fixed by the
Board of Directors or (except as to his or her own) be left to the discretion of
the Chief Executive Officer or the President.  No officer will be prevented from
receiving  a salary by reason of the fact that he or she is also a  director  of
the Company.

                   V. SPECIFIC OFFICERS, FUNCTIONS AND POWERS

     5.01. CHAIRMAN OF THE BOARD. The Board of Directors may elect a Chairman to
serve as a  general  executive  officer  of the  Company  and,  if  specifically
designated as such by the Board, as the Chief Executive  Officer of the Company.
If elected,  the Chairman  will preside at all meetings of the  directors and be
vested  with such  other  powers  and  duties as the Board may from time to time
delegate to him or her.

     5.02.  CHIEF  EXECUTIVE  OFFICER.  Subject  to the  control of the Board of
Directors exercised as hereinafter provided,  the Chief Executive Officer of the
Company will  supervise  its business and affairs and the  performance  of their
respective duties by all other officers,  by appointees  designated  pursuant to
Section  4.02  above,  and by such  additional  appointees  to  such  additional
positions  (corporate,  divisional or otherwise) as the Chief Executive  Officer
may designate,  with authority on his or her part to delegate the foregoing duty
of supervision to such extent and to such person or persons as may be determined
by the Chief Executive Officer.  Except as otherwise indicated from time to time
by  resolution  of the Board of  Directors,  its  management of the business and
affairs  of the  Company  will be  implemented  through  the office of the Chief
Executive Officer.

                                      -8-
<PAGE>
     5.03.  PRESIDENT AND VICE  PRESIDENTS.  Unless specified to the contrary by
resolution of the Board of Directors,  the President will be the Chief Executive
Officer of the Company. In addition to the supervisory functions above set forth
on the part of the Chief  Executive  Officer  or in lieu  thereof  if a contrary
specification is made by the Board relative to the Chief Executive Officer,  the
President  will be vested with such powers and duties as the Board may from time
to time  designate.  Vice Presidents may be elected by the Board of Directors to
perform  such  duties  as may be  designated  by the  Board  or be  assigned  or
delegated to them by their respective superior officers.  The Board may identify
(i) one or more Vice  Presidents as "Executive" or "Senior" Vice  Presidents and
(ii) the President or any Vice President as "General Manager" of the Company and
the title of any Vice  President  may  include  words  indicative  of his or her
particular area of responsibility and authority. Vice Presidents will succeed to
the responsibilities and authority of the President,  in the event of his or her
absence or disability,  in the order consistent with their respective  titles or
regular duties or as specifically designated by the Board of Directors.

     5.04.  TREASURER AND  SECRETARY.  The  Treasurer  and  Secretary  each will
perform all such duties normally  associated with his or her office  (including,
in the case of the  Secretary,  the  giving of notice  and the  preparation  and
retention  of minutes of  corporate  proceedings  and the  custody of  corporate
records and the seal of the Company) as are not assigned to a Vice  President of
the Company,  along with such other duties as may be  designated by the Board or
be assigned or  delegated to them by their  respective  superior  officers.  The
Board may appoint one or more  Assistant  Treasurers  or Assistant  Secretaries,
each of whom (in the order designated by the Board or their respective  superior
officers)  will be vested  with all of the  powers and  charged  with all of the
duties of the  Treasurer or the  Secretary  (as the case may be) in the event of
his or her absence or disability.

     5.05. SPECIFIC POWERS.  Except as may otherwise be specifically provided in
a resolution of the Board of Directors,  any of the officers referred to in this
Part V will be a proper  officer to  authenticate  records of the Company and to
sign on  behalf  of the  Company  any deed,  bill of sale,  assignment,  option,
mortgage, pledge, note, bond, debenture, evidence of indebtedness,  application,
consent  (to service of process or  otherwise),  agreement,  indenture  or other
instrument  of  importance  to the Company.  Any such officer may  represent the
Company at any  meeting  of the  shareholders  or  members  of any  corporation,
association,  partnership,  joint  venture or other entity in which this Company
then has an interest, and may vote such interest in person or by proxy appointed
by him or her, provided that the Board of Directors may from time to time confer
the foregoing authority upon any other person or persons.

                         VI. RESIGNATIONS AND VACANCIES

     6.01.  RESIGNATIONS.  Any director,  committee member or officer may resign
from his or her office at any time by written  notice as specified in accordance
with Arizona Revised  Statutes  Sections 10-807 and 10-843.  The acceptance of a
resignation will not be required to make it effective.

     6.02. VACANCIES. If the office of any director, committee member or officer
becomes  vacant by reason of his or her  death,  resignation,  disqualification,
removal or  otherwise,  the Board of  Directors  may choose a successor  to hold
office for the unexpired term.

                                      -9-
<PAGE>
                      VII. INDEMNIFICATION AND RATIFICATION

     7.01.  INDEMNIFICATION.  In order to induce qualified  persons to serve the
Company (and any other corporation,  joint venture, partnership,  trust or other
enterprise at the request of the Company) as directors and officers, the Company
shall indemnify any and all of its directors and officers,  or former  directors
and officers to the fullest  extent  permitted by applicable law as it presently
exists or may hereafter be amended.

     7.02.  RATIFICATION;  SPECIAL  COMMITTEE.  Any  transaction  involving  the
Company, any of its subsidiary  corporations or any of its directors,  officers,
employees  or agents  which at any time is  questioned  in any manner or context
(including a shareholders  derivative suit), on the ground of lack of authority,
conflict  of  interest,   misleading  or  omitted  statement  of  fact  or  law,
nondisclosure,  miscomputation,  improper principles or practices of accounting,
inadequate records,  defective or irregular execution or any similar ground, may
be investigated  and/or ratified (before or after judgment),  or an election may
be made not to  institute  or  pursue a claim or legal  proceedings  on  account
thereof or to accept or approve a negotiated  settlement  with  respect  thereto
(before  or  after  the  institution  of  legal  proceedings),  by the  Board of
Directors  or  by  a  special   committee  thereof  comprised  of  one  or  more
disinterested   directors  (that  is,  a  director  or  directors  who  did  not
participate  in  the  questioned   transaction  with  actual  knowledge  of  the
questioned aspect or aspects  thereof).  Such a special committee may be validly
formed and fully  empowered to act, in  accordance  with the purposes and duties
assigned  thereto,  by  resolution  or  resolutions  of the Board of  Directors,
notwithstanding  (i) the inclusion of Board members who are not disinterested as
aforesaid  among those who form a quorum at the meeting or meetings at which one
or more members of such special  committee are elected or appointed to the Board
or to such special  committee or at which such committee is formed or empowered,
or their inclusion among the directors who vote upon or otherwise participate in
taking any of the foregoing  actions,  or (ii) the taking of any of such actions
by the disinterested  members of the Board (or a majority of such members) whose
number is not  sufficient to constitute a quorum or a majority of the membership
of the full Board.  Any such special  committee so comprised  will,  to the full
extent  consistent  with its purposes and duties as expressed in such resolution
or  resolutions,  have all of the authority and powers of the full Board and its
Executive  Committee  (the  same as  though it were the full  Board  and/or  its
Executive  Committee in carrying out such purposes and duties) and will function
in accordance with Section 3.08 above. No other provisions of these Bylaws which
may at any time appear to conflict with any provisions of this Section 7.02, and
no defect or  irregularity  in the  formation,  empowering or functioning of any
such special committee,  will serve to impede, impair or bring into question any
action taken or  purported to be taken by such  committee or the validity of any
such action.  Any  ratification  of a transaction  pursuant to this Section 7.02
will  have the  same  force  and  effect  as if the  transaction  has been  duly
authorized originally. Any such ratification,  and any election made pursuant to
this Section 7.02 with respect to claims, legal proceedings or settlements, will
be binding upon the Company and its  shareholders  and will  constitute a bar to
any  claim or the  execution  of any  judgment  in  respect  of the  transaction
involved in such ratification or election.

                                   VIII. SEAL

     8.01. FORM THEREOF. The seal of the Company will have inscribed thereon the
name of the  Company,  the  state  and year of its  incorporation  and the words
"SEAL".

                                      -10-
<PAGE>
                             IX. STOCK CERTIFICATES

     9.01. FORM THEREOF. Each certificate representing stock of the Company will
be in such form  conforming  to law as may from time to time be  approved by the
Board of Directors,  and will bear the manual  facsimile  signatures and seal of
the Company as required or permitted by law.

     9.02. OWNERSHIP. The Company will be entitled to treat the registered owner
of any share as the absolute owner thereof and accordingly, will not be bound to
recognize  any  beneficial,  equitable  or other claim to, or interest  in, such
share on the part of any other  person,  whether or not it has  notice  thereof,
except as may  expressly be provided by Chapter 8 of Title 47,  Arizona  Revised
Statutes (or its successor), as at the time in effect, or other applicable law.

     9.03. TRANSFERS. Transfer of stock will be made on the books of the Company
only upon surrender of the certificate therefor, duly endorsed by an appropriate
person,  with  such  assurance  of  the  genuineness  and  effectiveness  of the
endorsement  as the Company may  require,  all as  contemplated  by Chapter 8 of
Title 47, Arizona Revised Statutes (or its successor), as at the time in effect,
and/or upon  submission  of any  affidavit,  other  document or notice which the
Company considers necessary.

     9.04. LOST CERTIFICATES.  In the event of the loss, theft or destruction of
any  certificate  representing  capital stock of this  Company,  the Company may
issue (or,  in the case of any such stock as to which a  transfer  agent  and/or
registrar have been appointed,  may direct such transfer agent and/or  registrar
to  countersign,  register and issue) a replacement  certificate in lieu of that
alleged to be lost,  stolen or destroyed,  and cause the same to be delivered to
the owner of the stock represented  thereby,  provided that the owner shall have
submitted such evidence showing the  circumstances of the alleged loss, theft or
destruction,  and  his  or  her  ownership  of the  certificate  as the  Company
considers  satisfactory,  together  with any other  factors  which  the  Company
considers  pertinent,  and further  provided that an indemnity  agreement and/or
indemnity bond shall have been provided in form and amount  satisfactory  to the
Company and to its transfer agent and/or registrar, if applicable.

                               X. EMERGENCY BYLAWS

     10.01.  EMERGENCY CONDITIONS.  The emergency Bylaws provided in this Part X
will be effective in the event of an emergency as prescribed in Arizona  Revised
Statutes Section 10-207.D. To the extent not inconsistent with the provisions of
this Part X, these Bylaws will remain in effect  during such  emergency and upon
its termination these emergency Bylaws will cease to be operative.

     10.02. BOARD MEETINGS. During any such emergency, a meeting of the Board of
Directors or any of its  committees  may be called by any officer or director of
the  Company.  Notice of the time and place of the meeting  will be given by the
person  calling  the same to those of the  directors  whom it may be feasible to
reach by any available means of communication. Such notice will be given so much
in advance of the meeting as circumstances  permit in the judgment of the person
calling  the same.  At any  Board or  committee  meeting  held  during  any such
emergency,  a quorum will consist of a majority of those who could reasonably be
expected  to attend the  meeting if they were  willing to do so, but in no event

                                      -11-
<PAGE>
more than a majority of those to whom notice of such meeting is required to have
been given as above provided.

     10.03. CERTAIN ACTIONS. The Board of Directors, either before or during any
such emergency,  may provide and from time to time modify lines of succession in
the  event  that  during  such an  emergency  any or all  officers,  appointees,
employees  or agents of the Company  are for any reason  rendered  incapable  of
discharging their duties. The Board, either before or during any such emergency,
may,  effective in the  emergency,  change the head office or designate  several
alternative head offices of the Company, or authorize the officers to do so.

     10.04. LIABILITY. No director, officer, appointee, employee or agent acting
in  accordance  with these  emergency  Bylaws will be liable  except for willful
misconduct.

     10.05.  MODIFICATIONS.  These emergency Bylaws will be subject to repeal or
change by further action of the Board of Directors, but no such repeal or change
will modify the  provisions  of Section 10.04 with respect to action taken prior
to the time of such repeal or change.  Any amendment of these  emergency  Bylaws
may make any further or different provisions that may be practical and necessary
for the circumstances of the emergency.

                                  XI. DIVIDENDS

     11.01. DECLARATION.  Subject to such restrictions or requirements as may be
imposed by law or the Company's Articles or as may otherwise be binding upon the
Company, the Board of Directors may from time to time declare dividends on stock
of the Company outstanding on the dates of record fixed by the Board, to be paid
in cash,  in  property  or in  shares  of the  Company's  stock on or as of such
payment or distribution dates as the Board may prescribe.

                                 XII. AMENDMENTS

     12.01. PROCEDURE.  These Bylaws may be amended,  supplemented,  repealed or
temporarily or permanently suspended,  in whole or in part, or new bylaws may be
adopted, at any duly constituted  meeting of the Board of Directors,  the notice
of which meeting either includes  mention of the proposed action relative to the
Bylaws or is waived as provided in Section 3.04 above. If, however, the chairman
of any such  meeting or a majority of directors  in  attendance  thereat in good
faith determines that any such action has arisen as a matter of necessity at the
meeting and is otherwise proper, no notice of such action will be required.

     12.02.  AMENDMENT OF BYLAWS.  Notwithstanding  any other provision of these
Bylaws,  Sections 2.02, 3.01, and 3.12 and Article XII of these Bylaws shall not
be altered,  amended,  supplemented,  repealed,  or  temporarily  or permanently
suspended, in whole or in part, or replacement Bylaw provisions adopted without:
(i) the affirmative vote of a majority of the directors then in office; and (ii)
the affirmative  vote of  seventy-five  percent (75%) or more of the outstanding
shares of the Company entitled to vote generally.

                                      -12-
<PAGE>
                                   CERTIFICATE

     I, FAYE  WIDENMANN,  Vice President and Secretary of ARIZONA PUBLIC SERVICE
COMPANY, an Arizona corporation,  do HEREBY CERTIFY that the foregoing is a true
and correct copy of the Company's  Bylaws,  as amended and that such Bylaws,  as
amended, are in full force and effect as of the date hereof.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand and affixed the seal of
said corporation as of this 18th day of September, 2002.

                                        Faye Widenmann
                                        ----------------------------------------
                                        FAYE WIDENMANN
                                        Vice President and Secretary

                                      -13-

