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<ITEMS>7
<FILING-DATE>20021220
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>PINNACLE WEST CAPITAL CORP
<CIK>0000764622
<ASSIGNED-SIC>4911
<IRS-NUMBER>860512431
<STATE-OF-INCORPORATION>AZ
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
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<FILE-NUMBER>001-08962
<FILM-NUMBER>02865673
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>400 E VAN BUREN ST PO BOX 52132
<STREET2>P O BOX 52132
<CITY>PHOENIX
<STATE>AZ
<ZIP>85072-2132
<PHONE>6022501000
</BUSINESS-ADDRESS>
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<STREET1>400 E VAN BUREN ST
<STREET2>PO BOX 52132
<CITY>PHOENIX
<STATE>AZ
<ZIP>85072-2132
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>AZP GROUP INC
<DATE-CHANGED>19870506
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>e-9357.txt
<DESCRIPTION>CURRENT REPORT DATED 12/17/2002
<TEXT>
                       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 17, 2002


                        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 NORTH FIFTH STREET, P.O. BOX 53999, PHOENIX, ARIZONA          85004
         (Address of principal executive offices)               (Zip Code)


                                 (602) 250-1000
              (Registrant's telephone number, including area code)


                                      NONE
          (Former name or former address, if changed since last report)
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(c)  Exhibits.

     The Registrant hereby files the following Exhibits to its Registration
     Statements on Form S-3 (Nos. 333-52476 and 333-101457), which were declared
     effective on January 11, 2001 and December 5, 2002, respectively.

     EXHIBIT NO.                DESCRIPTION
     -----------                -----------
        1.3              Underwriting Agreement, dated December 17, 2002, in
                         connection with the offering of up to 6.555 million
                         shares of Common Stock.

        4.19             Specimen of Common Stock Certificate.

        5.1              Opinion of Snell & Wilmer L.L.P.
<PAGE>
                                   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 20, 2002                By: Barbara M. Gomez
                                            ------------------------------------
                                            Barbara M. Gomez
                                            Treasurer

                                       2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.3
<SEQUENCE>3
<FILENAME>ex1-3.txt
<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>
                                                                     Exhibit 1.3

                        PINNACLE WEST CAPITAL CORPORATION

                                  Common Stock

                             UNDERWRITING AGREEMENT

                                                               December 17, 2002

Credit Suisse First Boston Corporation
Salomon Smith Barney Inc.
     As Representatives of the Several Underwriters
         c/o Credit Suisse First Boston Corporation
                  Eleven Madison Avenue
                           New York, New York 10010

Dear Sir or Madam:

     1. INTRODUCTION.  Pinnacle West Capital Corporation, an Arizona corporation
(the  "COMPANY"),  proposes  to  issue  and  sell to the  Underwriters  named in
Schedule A hereto (the  "UNDERWRITERS")  an aggregate  of 5,700,000  shares (the
"FIRM  SHARES")  and,  at  the  election  of  the  Underwriters,  up to  855,000
additional  shares (the  "OPTIONAL  SHARES") of Common  Stock,  no par value per
share (the "STOCK") of the Company (the Firm Shares and the Optional Shares that
the Underwriters elect to purchase being collectively called the "SHARES").

     2.  REPRESENTATIONS  AND WARRANTIES OF THE COMPANY. In connection with each
offering of the Shares, the Company represents and warrants to, and agrees with,
the several Underwriters that:

          (a) Two registration  statements on Form S-3 (File Nos.  333-52476 and
     333-101457)  in respect of the Shares (and certain other  securities)  have
     been filed with the Securities and Exchange  Commission (the  "COMMISSION")
     (the earliest of such  registration  statements  being sometimes called the
     "FIRST  REGISTRATION  STATEMENT"  and the  later the  "SECOND  REGISTRATION
     STATEMENT");  such registration statements and any post-effective amendment
     thereto,  each in the form heretofore made available to Credit Suisse First
     Boston  Corporation and Salomon Smith Barney Inc. (each a  "REPRESENTATIVE"
     and together the  "REPRESENTATIVES"),  have been declared  effective by the
     Commission under the Securities Act of 1933, as amended (the "ACT"); and no
     stop order suspending the effectiveness of any such registration  statement
     has been issued and no  proceeding  for that purpose has been  initiated or
     threatened by the Commission (any preliminary  prospectus  included in such
     registration  statements  or filed  with the  Commission  pursuant  to Rule
     424(a)  or 424(b)  under  the Act,  is  hereinafter  called a  "PRELIMINARY
     PROSPECTUS"   (provided  that  such  term  shall  include  the  preliminary
     prospectus  supplement  dated  December 13, 2002 and the  prospectus  dated
<PAGE>

     December  5,  2002);  the various  parts of such  registration  statements,
     including all exhibits thereto and the documents  incorporated by reference
     in the prospectus contained in the registration statements, each as amended
     from time to time, are hereinafter  collectively  called the  "REGISTRATION
     STATEMENT";  the prospectus relating to the Shares, in the form in which it
     has most recently been filed,  or prepared for filing,  with the Commission
     on or  prior  to the  date  of this  Agreement,  including  the  prospectus
     supplement  to be filed with the  Commission  pursuant to Rule 424(b) under
     the Act in accordance with Section 4(a) hereof,  is hereinafter  called the
     "PROSPECTUS";  any reference  herein to any  Preliminary  Prospectus or the
     Prospectus   shall  be  deemed  to  refer  to  and  include  the  documents
     incorporated by reference therein pursuant to the applicable form under the
     Act, as of the date of such  Preliminary  Prospectus or Prospectus,  as the
     case  may  be;  any  reference  to  any  amendment  or  supplement  to  any
     Preliminary  Prospectus or the  Prospectus  shall be deemed to refer to and
     include any documents filed after the date of such  Preliminary  Prospectus
     or  Prospectus,  as the case may be, under the  Securities  Exchange Act of
     1934, as amended (the "EXCHANGE  ACT"),  and  incorporated  by reference in
     such  Preliminary  Prospectus  or  Prospectus,  as the case may be; and any
     reference to any amendment to the Registration Statement shall be deemed to
     refer to and include any annual  report of the  Company  filed  pursuant to
     Section 13(a) or 15(d) of the Exchange Act after the effective  date of the
     Registration   Statement   that  is   incorporated   by  reference  in  the
     Registration Statement).

          (b) Each part of the  Registration  Statement  relating to the Shares,
     when such part became effective,  conformed in all material respects to the
     requirements  of the Act and the rules and  regulations  of the  Commission
     (the "RULES AND  REGULATIONS"),  and did not contain an untrue statement of
     material  fact or omit to  state a  material  fact  required  to be  stated
     therein or necessary to make the statements therein not misleading;  and on
     the date of this Agreement,  the Registration  Statement and the Prospectus
     conform in all  material  respects to the  requirements  of the Act and the
     Rules and Regulations and do not contain an untrue  statement of a material
     fact or omit to state a  material  fact  required  to be stated  therein or
     necessary to make the statements therein not misleading; PROVIDED, HOWEVER,
     that this  representation and warranty shall not apply to any statements or
     omissions  made  in  reliance  upon  and  in  conformity  with  information
     furnished  in  writing  to the  Company  by  any  Underwriter  through  the
     Representatives specifically for use therein. The documents incorporated by
     reference in the Prospectus,  when they became effective or were filed with
     the Commission, as the case may be, conformed in all material respects with
     the  requirements  of the Act or the Exchange Act, as  applicable,  and the
     Rules and Regulations.

          (c)  The  Company  has  been  duly  incorporated  and  is an  existing
     corporation  in good standing under the laws of the State of Arizona and is
     duly qualified to do business as a foreign  corporation in good standing in
     all other  jurisdictions in which its ownership or lease of property or the
     conduct of its business requires such qualification,  and where the failure
     to be so qualified  would have a material  adverse effect on the current or
     future consolidated financial position,  stockholders' equity or results of
     operation  of the  Company  and its  consolidated  subsidiaries  ("MATERIAL
     ADVERSE EFFECT").

                                       2
<PAGE>
          (d) Each of Arizona Public Service  Company  ("APS") and Pinnacle West
     Energy   Corporation   ("PWEC"  and,   together  with  APS,  the  "MATERIAL
     SUBSIDIARIES")  has been duly  incorporated  and is validly  existing  as a
     corporation  in  good  standing  under  the  laws  of its  jurisdiction  of
     incorporation;  and all of the  issued  shares  of  capital  stock  of each
     Material  Subsidiary have been duly and validly  authorized and issued, are
     fully paid and  nonassessable,  and are owned directly or indirectly by the
     Company, free and clear of all liens, encumbrances, equities or claims.

          (e) Since the respective dates as of which information is given in the
     Registration Statement and the Prospectus,  there has not been any material
     adverse change, or any development involving a prospective material adverse
     change, in or affecting the consolidated financial position,  stockholders'
     equity  or  results  of  operations  of the  Company  and its  consolidated
     subsidiaries,   otherwise  than  as  set  forth  or   contemplated  in  the
     Prospectus.

          (f) The Company has an authorized  capitalization  as set forth in the
     Prospectus;  all of the issued  shares of capital stock of the Company have
     been  duly  and  validly  authorized  and  issued  and are  fully  paid and
     nonassessable  and  conform to the  description  thereof  contained  in the
     Prospectus;  and the stockholders and other security holders of the Company
     have no  preemptive  rights with respect to any shares of capital  stock of
     the Company except as described in the Prospectus.

          (g) The  unissued  Shares to be issued and sold by the  Company to the
     Underwriters  hereunder  have been duly and validly  authorized  and,  when
     issued and delivered  against payment therefor as provided herein,  will be
     duly and validly issued and fully paid and  nonassessable  and will conform
     to the description of the Stock contained in the Prospectus.

          (h) The issue and sale of the Shares by the Company and the compliance
     by the  Company  with  all of the  provisions  of  this  Agreement  and the
     consummation of the transactions herein contemplated will not conflict with
     or result in a breach or violation of any of the terms or provisions of, or
     constitute a default  under,  any  material  indenture,  mortgage,  deed of
     trust,  loan agreement or other  material  agreement or instrument to which
     the Company or any of its Material  Subsidiaries is a party or by which the
     Company or any of its Material Subsidiaries is bound or to which any of the
     property or assets of the Company or any of its  Material  Subsidiaries  is
     subject,  nor will such action result in any violation of the provisions of
     the Articles of  Incorporation  or By-laws of the Company or any statute or
     any order,  rule or regulation of any court or governmental  agency or body
     having  jurisdiction  over the Company or any of its subsidiaries or any of
     their  properties;   and  no  consent,  approval,   authorization,   order,
     registration  or  qualification  of or with any such court or  governmental
     agency or body is  required  for the  issue  and sale of the  Shares or the
     consummation  by the  Company  of the  transactions  contemplated  by  this
     Agreement,  except  the  registration  under the Act of the Shares and such
     consents, approvals, authorizations, registrations or qualifications as may
     be required under state  securities or Blue Sky laws in connection with the
     purchase and distribution of the Shares by the Underwriters.

                                       3
<PAGE>
          (i) [Reserved.]

          (j) The  statements  set forth in the  Prospectus  under  the  caption
     "Description  of Common  Stock",  insofar as they  purport to  constitute a
     summary of the terms of the Stock, are accurate, complete and fair.

          (k) Other than as set forth in the  Prospectus,  there are no legal or
     governmental  proceedings  pending  to  which  the  Company  or  any of its
     subsidiaries  is a party which,  if determined  adversely to the Company or
     any of its  subsidiaries,  would have a Material Adverse Effect and, to the
     Company's  knowledge,  no such  proceedings  are threatened by governmental
     authorities or others.

          (l) Except as disclosed in the Prospectus, the Company and each of its
     Material  Subsidiaries  has all  corporate  and other legal  powers and all
     material  governmental  licenses,  authorizations,  consents and  approvals
     required  to carry on its  business  as now  conducted,  except  where  the
     failure to have any such license, authorization,  consent or approval would
     not have a Material  Adverse  Effect,  and, as to APS,  except that (a) APS
     from time to time may make minor extensions of its lines, plants,  services
     or  systems  prior  to  the  time  a  related  franchise,   certificate  of
     convenience and necessity,  license or permit is procured, (b) from time to
     time  communities  served by APS may become  incorporated  and considerable
     time may elapse  before  such a franchise  is  procured,  (c) certain  such
     franchises may have expired prior to the renegotiation thereof, (d) certain
     minor  defects and  exceptions  may exist  which,  individually  and in the
     aggregate,  are not  material  and (e)  certain  franchises,  certificates,
     licenses and permits may not be specific as to their geographical scope.

          (m)  To  the  extent   material  to  the  Company  and  its   Material
     Subsidiaries  taken as a whole,  they have good and marketable title to the
     real and  personal  property  owned by them,  and any real  properties  and
     buildings held under lease by the Company or its Material  Subsidiaries are
     held under valid and enforceable leases, in each case free and clear of all
     liens,  encumbrances  and  defects  except  such  as are  described  in the
     Prospectus or such as do not and will not have a Material  Adverse  Effect;
     provided, however, that this representation and warranty as to leases shall
     not extend to  property  held under  lease from the Navajo  Nation or under
     easement from the Federal Government,  certain issues with respect to which
     are set  forth in the  Company's  latest  annual  report on Form  10-K,  as
     amended, as filed with the Commission.

          (n)  Except  as  disclosed  in  the  Prospectus,  the  operations  and
     properties  of the  Company  and its  Material  Subsidiaries  comply in all
     material respects with all applicable foreign, federal, state or local laws
     and  regulations  and any decision or order of any  governmental  agency or
     body  or  any  court  relating  to  the  environment,  the  effect  of  the
     environment  on human health or hazardous  or toxic  substances  or wastes,
     pollutants  or  contaminants   ("ENVIRONMENTAL  LAWS"),  except  where  the
     necessity  of  compliance  therewith  is being  contested  in good faith by
     appropriate proceedings or such noncompliance with Environmental Laws would
     not have a Material Adverse Effect.

                                       4
<PAGE>
          (o) The Company is not and,  after  giving  effect to the offering and
     sale of the Shares,  will not be an "investment  company",  as such term is
     defined in the Investment  Company Act of 1940, as amended (the "INVESTMENT
     COMPANY ACT").

          (p)  Deloitte  & Touche  LLP,  who have  certified  certain  financial
     statements  of the Company and its  subsidiaries,  are  independent  public
     accountants as required by the Act and the Rules and Regulations.

          (q) The financial  statements included in the Registration  Statements
     and the Prospectus  present  fairly in all material  respects the financial
     position of the Company and its  consolidated  subsidiaries as of the dates
     shown and their results of operations and cash flows for the periods shown,
     and such  financial  statements  have been prepared in conformity  with the
     generally accepted accounting  principles in the United States applied on a
     consistent basis (except as disclosed therein);  and the schedules included
     in the Registration  Statements present fairly in all material respects the
     information required to be stated therein.

          (r) There are no contracts,  agreements or understandings  between the
     Company  and any person  granting  such  person  the right to  require  the
     Company to file a registration  statement under the Act with respect to any
     securities of the Company owned or to be owned by such person or to require
     the  Company  to  include  such  securities  in the  securities  registered
     pursuant  to  the  Registration   Statement  or  in  any  securities  being
     registered  pursuant  to any  other  registration  statement  filed  by the
     Company under the Act.

          (s) Not later than the  earliest  Closing Date  hereunder,  the Shares
     will have been approved for listing on the New York Stock Exchange  subject
     to notice of issuance.

          (t) This Agreement has been duly authorized, executed and delivered by
     the Company.

     3.   PURCHASE,   SALE  AND  DELIVERY  OF  SHARES.   On  the  basis  of  the
representations,  warranties and agreements herein contained, but subject to the
terms  and  conditions  herein  set  forth,  the  Company  agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the  Company,  at a purchase  price of $30.397  per share,  the  respective
numbers  of Firm  Shares set forth  opposite  the names of the  Underwriters  in
Schedule A hereto.

     In addition,  upon  written  notice from the  Representatives  given to the
Company from time to time not more than 30 days  subsequent  to the date of this
Agreement,  the  Underwriters  may purchase all or less than all of the Optional
Shares  at the  purchase  price per  share to be paid for the Firm  Shares.  The
Company  agrees  to sell to the  Underwriters  the  number  of  Optional  Shares
specified in such notice and the Underwriters agree,  severally and not jointly,
to purchase such Optional  Shares.  Such Optional  Shares shall be purchased for
the account of each  Underwriter  in the same  proportion  as the number of Firm
Shares set forth  opposite  such  Underwriter's  name bears to the total of Firm
Shares  (subject to adjustment to eliminate  fractions)  and may be purchased by
the  Underwriters  only for the  purpose  of  covering  over-allotments  made in

                                       5
<PAGE>
connection with the sale of the Firm Shares. No Optional Shares shall be sold or
delivered unless the Firm Shares  previously have been, or  simultaneously  are,
sold and  delivered.  The right to purchase the  Optional  Shares or any portion
thereof  may be  exercised  from time to time and to the extent  not  previously
exercised  may be  surrendered  and  terminated  at any time upon  notice by the
Representatives to the Company.

     The time and date of  delivery  and payment  shall be, with  respect to the
Firm Shares,  10:00 a.m., New York time, on December 23, 2002 or such other time
and date as the Representatives  and the Company may agree upon in writing,  and
with respect to the Optional Shares,  a.m., New York time, on the date specified
by the Representatives in the written notice given by the Representatives of the
Underwriters'  election to purchase such Optional Shares, or such other time and
date as the Representatives and the Company may agree upon in writing.  The time
and date for  delivery  of the Firm Shares is herein  called the "FIRST  CLOSING
DATE".  Each time for the delivery of and payment for the Optional  Shares,  the
"OPTIONAL  CLOSING  DATE",  which  may be  the  First  Closing  Date,  shall  be
determined by the Representatives but shall be not later than five full business
days after written notice of election to purchase Optional Shares is given. Each
such date for delivery is herein called a "CLOSING DATE".

     The Shares to be purchased by each  Underwriter on the  applicable  Closing
Date, shall be registered in such names as the  Representatives may request upon
at least  forty-eight  hours' prior notice to the Company and shall be delivered
by or on behalf of the Company to the Representatives, through the facilities of
the  Depository  Trust  Company  ("DTC"),  for the account of such  Underwriter,
against  payment  by or on  behalf of such  Underwriter  of the  purchase  price
therefor by wire transfer of Federal  (same-day) funds to the account  specified
by the Company to the Representatives at least forty-eight hours in advance. The
Company will cause the certificates representing the Shares to be made available
for checking and packaging at least  twenty-four  hours prior to the  applicable
Closing  Date  with  respect  thereto  at the  office  of DTC or its  designated
custodian.

     4.  COVENANTS OF THE  COMPANY.  The Company  covenants  and agrees with the
several Underwriters that:

          (a) The Company will file the Prospectus with the Commission  pursuant
     to and in  accordance  with Rule 424(b) not later than the second  business
     day following the execution of this agreement.

          (b) The  Company  will  advise  the  Representatives  promptly  of any
     proposed amendment or supplementation of the Registration Statement, or the
     Prospectus.  The  Company  will  also  advise  the  Representatives  of the
     institution by the  Commission of any stop order  proceedings in respect of
     the  Registration  Statement or of any part thereof,  and will use its best
     efforts to  prevent  the  issuance  of any such stop order and to obtain as
     soon as possible its lifting, if issued.

          (c) If,  at any time  when a  prospectus  relating  to the  Shares  is
     required to be  delivered  under the Act,  any event  occurs as a result of
     which the  Prospectus  as then  amended or  supplemented  would  include an
     untrue  statement of a material  fact,  or omit to state any material  fact
     necessary to make the statements therein, in the light of the circumstances

                                       6
<PAGE>
     under which they were made,  not  misleading,  or if it is necessary at any
     time to amend or supplement the Registration Statement or the Prospectus to
     comply with the Act,  the Company  promptly  will prepare and file with the
     Commission an amendment or supplement  that will correct such  statement or
     omission or an  amendment  that will effect  such  compliance.  Neither the
     Representatives'  consent to, nor the  Underwriters'  delivery of, any such
     amendment or supplement  shall  constitute a waiver of any  conditions  set
     forth in Section 5 hereof.

          (d) As soon as  practicable,  but not later than 18 months,  after the
     date of this  Agreement,  the Company will make generally  available to its
     security  holders an earning  statement  or  statements  (which need not be
     audited)  covering  a period  of at least 12  months  beginning  after  the
     effective  date of the Second  Registration  Statement  (as defined in Rule
     158(c) under the Act),  which will satisfy the  provisions of Section 11(a)
     of the Act and the rules and regulations thereunder.

          (e)  The   Company   will   furnish   to  the   Underwriters   or  the
     Representatives  such copies of the Registration  Statement  (including one
     copy of the Second  Registration  Statement for each Representative and for
     the  counsel  for the  Underwriters,  which  is  signed  and  includes  all
     exhibits),   any  related  preliminary   prospectus   supplements  and  the
     Prospectus,  including all amendments or supplements to such documents,  as
     may be reasonably requested.

          (f) The Company  will arrange or  cooperate  in  arrangements  for the
     qualification  of the Shares for sale under the laws of such  jurisdictions
     as the  Representatives  designate and will continue such qualifications in
     effect so long as required  for the  distribution  of the Shares,  provided
     that the Company shall not be required to qualify as a foreign  corporation
     in any State, to consent to service of process in any State other than with
     respect to claims arising out of the offering or sale of the Shares,  or to
     meet other requirements deemed by it to be unduly burdensome.

          (g) During the period of five years after the date of this  Agreement,
     the Company will furnish to the Representatives and, upon request,  each of
     the other  Underwriters,  (i) as soon as practicable  after the end of each
     fiscal year, a balance sheet and statements of income and changes in common
     stock  equity of the  Company  as at the end of and for such  year,  all in
     reasonable detail and certified by independent public accountants, and (ii)
     (A) as soon as practicable  after the end of each  quarterly  fiscal period
     (except  for the last  quarterly  fiscal  period of each  fiscal  year),  a
     balance  sheet and  statement of income of the Company as at the end of and
     for such  period,  all in  reasonable  detail and  certified by a principal
     financial or accounting officer of the Company, (B) as soon as available, a
     copy of each report of the Company filed with the Commission,  and (C) from
     time  to  time,  such  other  information  concerning  the  Company  as may
     reasonably  be requested.  So long as the Company has active  subsidiaries,
     such financial statements will be on a consolidated basis to the extent the
     accounts of the Company and its subsidiaries are consolidated.

                                       7
<PAGE>
          (h) The Company  agrees to pay the costs and expenses  relating to the
     following matters: (i) the preparation, printing or reproduction and filing
     with the  Commission of the  Registration  Statement  (including  financial
     statements  and  exhibits  thereto),  each  Preliminary   Prospectus,   the
     Prospectus,  and each  amendment  or  supplement  to any of them;  (ii) the
     printing (or reproduction)  and delivery  (including  postage,  air freight
     charges and  charges  for  counting  and  packaging)  of such copies of the
     Registration Statement,  each Preliminary Prospectus,  the Prospectus,  and
     all  amendments  or  supplements  to any of them,  as may, in each case, be
     reasonably  requested for use in  connection  with the offering and sale of
     the Shares; (iii) the preparation, printing,  authentication,  issuance and
     delivery of  certificates  for the Shares,  including any stamp or transfer
     taxes in connection with the original issuance and sale of the Shares; (iv)
     the printing (or reproduction) and delivery of this Agreement, any blue sky
     memorandum and all other  agreements or documents  printed (or  reproduced)
     and  delivered  in  connection  with the  offering of the  Shares;  (v) the
     registration  of the Shares  under the  Exchange Act and the listing of the
     Shares  on  the  New  York  Stock  Exchange;   (vi)  any   registration  or
     qualification of the Shares for offer and sale under the securities or blue
     sky laws of the several  states  (including  filing fees and the reasonable
     fees  and  expenses  of  counsel  for  the  Underwriters  relating  to such
     registration and qualification); (vii) any filings required to be made with
     the National Association of Securities Dealers, Inc. (including filing fees
     and the  reasonable  fees and  expenses  of  counsel  for the  Underwriters
     relating to such  filings);  (viii) the  transportation  and other expenses
     incurred  by or on behalf of Company  representatives  in  connection  with
     presentations  to prospective  purchasers of the Shares;  (ix) the fees and
     expenses of the Company's  accountants and the fees and expenses of counsel
     (including  local and special  counsel) for the Company;  and (x) all other
     costs and  expenses  incident  to the  performance  by the  Company  of its
     obligations hereunder.

          (i) For a period  of 90 days  after  the date of this  Agreement,  the
     Company will not offer, sell, contract to sell, pledge or otherwise dispose
     of,  directly or  indirectly,  or file with the  Commission a  registration
     statement  under the Act relating to, any  additional  shares of its Common
     Stock or securities convertible into or exchangeable or exercisable for any
     shares of its Stock,  or publicly  disclose the  intention to make any such
     offer,  sale,  pledge,  disposition  or filing,  without the prior  written
     consent of the  Representatives;  PROVIDED,  HOWEVER,  that the Company may
     issue and sell Stock, or grant stock options and other stock-based  awards,
     in connection with its existing equity  incentive and  compensation  plans,
     its savings plan, and its direct stock  purchase and dividend  reinvestment
     plan.

     5.  CONDITIONS OF THE OBLIGATIONS OF THE  UNDERWRITERS.  The obligations of
the several  Underwriters  to purchase  and pay for the Firm Shares on the First
Closing Date and the Optional  Shares to be purchased on each  Optional  Closing
Date will be subject to the accuracy of the  representations  and  warranties on
the part of the Company  herein,  to the accuracy of the  statements  of Company
officers made  pursuant to the  provisions  hereof,  to the  performance  by the
Company of its obligations hereunder, and to the following additional conditions
precedent:

          (a) On or  prior to the date of this  Agreement,  the  Representatives
     shall  have  received  a letter,  dated the date of  delivery  thereof,  of

                                       8
<PAGE>
     Deloitte & Touche confirming that they are independent  public  accountants
     within  the  meaning  of the Act and the  applicable  published  Rules  and
     Regulations thereunder and stating to the effect that:

               (i) in their opinion the financial  statements  and any schedules
          and any  summary of  earnings  examined  by them and  included  in the
          Prospectus  comply  as to  form  in all  material  respects  with  the
          applicable  accounting   requirements  of  the  Act  and  the  related
          published Rules and Regulations;

               (ii) they have performed the procedures specified by the American
          Institute  of  Certified  Public  Accountants  for a review of interim
          financial  information as described in Statement of Auditing Standards
          No. 71,  Interim  Financial  Information,  on any unaudited  financial
          statements included in the Registration Statement;

               (iii) on the  basis of the  review  referred  to in  clause  (ii)
          above, a reading of the latest available interim financial  statements
          of the  Company,  inquiries  of  officials  of the  Company  who  have
          responsibility   for  financial  and  accounting   matters  and  other
          specified procedures, nothing came to their attention that caused them
          to believe that:

                    (A) the  unaudited  financial  statements,  if any,  and any
               summary of earnings  included in the  Prospectus do not comply as
               to form in all material  respects with the applicable  accounting
               requirements  of the Act  and the  related  published  Rules  and
               Regulations or any material  modifications should be made to such
               unaudited  financial  statements and summary of earnings for them
               to  be  in  conformity   with   generally   accepted   accounting
               principles;


                    (B) if any unaudited  "capsule"  information is contained in
               the Prospectus,  the unaudited  consolidated  operating revenues,
               gross  income,  net income  and net  income per share  amounts or
               other  amounts   constituting  such  "capsule"   information  and
               described  in such  letter  do not agree  with the  corresponding
               amounts  set  forth  in  the  unaudited   consolidated  financial
               statements  or  were  not  determined  on a  basis  substantially
               consistent with that of the corresponding  amounts in the audited
               statements of income;

                    (C) at the date of the latest  available  balance sheet read
               by such accountants,  or at a subsequent  specified date not more
               than three business days prior to the date of such letter,  there
               was  any  change  in the  amounts  of  common  stock,  redeemable
               preferred stock, or non-redeemable preferred stock of the Company
               or any increase,  exceeding $10,000,000, in long-term debt of the
               Company  or, at the date of the most recent  available  unaudited
               financial  statements  there was any  decrease  in net  assets as

                                       9
<PAGE>
               compared  with most  amounts  shown in the most recent  financial
               statements   incorporated   by  reference  in  the   Registration
               Statement; or

                    (D) for the  period  from  the  closing  date of the  latest
               income  statement  included in the Prospectus to the closing date
               of the latest available income statement read by such accountants
               there were any  decreases,  as  compared  with the  corresponding
               period of the previous year and with the period of  corresponding
               length ended the date of the latest income statement  included in
               the  Prospectus,  in the amounts of total revenues or net income,
               except in all cases for increases or decreases  which result from
               the declaration or payment of dividends;

          except  in all  cases  set  forth in  clauses  (C) and (D)  above  for
          changes,  increases or decreases  which the Prospectus  discloses have
          occurred or may occur or which are described in such letter; and

               (iv) they have compared  specified dollar amounts (or percentages
          derived  from such dollar  amounts)  and other  financial  information
          contained  in the  Prospectus  (in each case to the  extent  that such
          dollar  amounts,  percentages  and  other  financial  information  are
          derived  from the  general  accounting  records of the Company and its
          subsidiaries  subject  to  the  internal  controls  of  the  Company's
          accounting  system  or are  derived  directly  from  such  records  by
          analysis or computation)  with the results obtained from inquiries,  a
          reading  of such  general  accounting  records  and  other  procedures
          specified  in  such  letter  and  have  found  such  dollar   amounts,
          percentages  and other  financial  information to be in agreement with
          such results, except as otherwise specified in such letter.

     All financial statements and schedules included in material incorporated by
     reference  into the Prospectus  shall be deemed  included in the Prospectus
     for purposes of this subsection.

          (b) No stop order  suspending the  effectiveness  of the  Registration
     Statement or any part thereof shall have been issued and no proceedings for
     that purpose shall have been instituted or, to the knowledge of the Company
     or the Underwriters, shall be contemplated by the Commission.

          (c) Subsequent to the execution of this Agreement, (i) there shall not
     have  occurred  any change,  or any  development  involving  a  prospective
     change,  in or affecting  particularly  the business or  properties  of the
     Company or its subsidiaries which, in the judgment of the  Representatives,
     materially impairs the investment  quality of the Shares,  (ii) there shall
     not have  occurred a suspension  of trading in the  Company's  Stock by the
     Commission  or the New York Stock  Exchange  or a  suspension  or  material
     limitation  in  trading  in  securities  generally  on the New  York  Stock
     Exchange,  (iii)  there  shall not have  occurred a general  moratorium  on
     commercial banking activities in New York declared by either Federal or New
     York  State  authorities,  (iv)  no  rating  of any of the  Company's  debt
     securities  shall  have been  lowered  and there  shall have been no public
     announcement that any such debt securities have been placed on CreditWatch,
     Watchlist,  or under any similar  surveillance or review, in each case with

                                       10
<PAGE>
     negative implications, by any recognized rating agency, (v) there shall not
     have  occurred  any  major  disruption  of  settlements  of  securities  or
     clearance  services  in the United  States,  and (vi) there  shall not have
     occurred  any  outbreak or  escalation  of major  hostilities  in which the
     United States is involved,  any declaration of war by Congress or any other
     substantial  national or  international  calamity or  emergency  if, in the
     judgment  of  the  Representatives,   the  effect  of  any  such  outbreak,
     escalation,  declaration,  calamity or emergency  makes it  impractical  or
     inadvisable  to proceed with  completion of the sale of and payment for the
     Shares.

          (d) The  Underwriters  or the  Representatives  shall have received an
     opinion  of Snell & Wilmer  L.L.P.,  counsel  for the  Company,  dated  the
     relevant Closing Date, to the effect that:

               (i)  The  Company  is  a  corporation  duly  organized,   validly
          existing,  and in good standing under the laws of the State of Arizona
          with the  corporate  power and  authority  to carry on its business as
          described in the Prospectus;

               (ii) The Company has  authorized  capitalization  as set forth in
          the Prospectus,  and the Shares have been duly and validly authorized,
          executed,  issued and delivered, and are fully paid and nonassessable,
          and conform to the description thereof in the Prospectus;

               (iii) [Reserved;]

               (iv) APS and PWEC  have been duly  incorporated  and are  validly
          existing  as  corporations  in good  standing  under  the  laws of its
          jurisdiction  of  incorporation;  APS and PWEC are duly qualified as a
          foreign corporations to do business,  and are in good standing, in the
          States  of  (a)  California,   Montana,  New  Mexico,  Oregon,  Texas,
          Washington  and  Wyoming  and (b)  California,  Nevada and New Mexico,
          respectively;  and all of the issued  shares of capital  stock of each
          such subsidiary are owned directly or indirectly by the Company,  free
          and clear of all liens, encumbrances, equities or claims (such counsel
          being  entitled  to rely in respect of the opinion in this clause upon
          opinions  of local  counsel  and in  respect  to  matters of fact upon
          certificates  of  officers  of the  Company or its  subsidiaries,  UCC
          searches or other appropriate information,  provided that such counsel
          shall specify in its opinion the items relied upon);

               (v) To the actual  knowledge of those persons in the Lawyer Group
          (defined below),  except as described in the Prospectus,  there are no
          pending or overtly  threatened actions or proceedings before any court
          or governmental agency in which the Company or any of its subsidiaries
          is a party or in  which  any  property  of the  Company  or any of its
          subsidiaries  is the  subject,  which are likely to have a  materially
          adverse  effect  on  the  current  or  future  consolidated  financial
          position,  stockholders equity or results of operations of the Company

                                       11
<PAGE>
          and  its  consolidated  subsidiaries.  With  respect  to  the  matters
          discussed  in the  immediately  preceding  sentence,  the  standard of
          materiality  considered  is that  provided  for in Item  103  (Reg.ss.
          229.103) of Regulation  S-K  promulgated  under the  Securities Act of
          1933, as amended.  In giving the foregoing  opinion,  such counsel may
          rely solely upon inquiry  among the lawyer group (the "LAWYER  GROUP")
          consisting of those  lawyers in the offices of Snell & Wilmer,  L.L.P.
          who (i) have  recorded  any  time on the  transaction  to  which  this
          opinion  relates or (ii) have billed more than ten hours on any matter
          involving the Company the twelve-month  period preceding  December __,
          2002,  the date as of which the list of such  lawyers was compiled for
          purposes  of  inquiry  for this  opinion.  This  opinion is limited to
          matters  which have been  given  substantive  attention  by the Lawyer
          Group in the form of legal consultation as described in Paragraph 2 of
          the ABA Statement of Policy Regarding  Lawyers' Responses to Auditors'
          Requests for Information (December 1975);

               (vi)  This  Agreement  has been  duly  authorized,  executed  and
          delivered by the Company;

               (vii) The issue and sale of the Shares and the performance by the
          Company of its  obligations  under the  Underwriting  Agreement do not
          contravene  or  constitute  a default  under (a) the  Articles  or the
          Bylaws of the Company,  (b) any  material  provision of any statute or
          any order,  rule or regulation of any court or governmental  agency or
          body having  jurisdiction  over the Company or any of its subsidiaries
          or any of their  properties  known to such counsel and, in the case of
          any such order,  described in the Company  Certificate  (as defined in
          and  attached  to such  opinion),  or (c)  any  contractual  or  legal
          restriction   contained  in  any   document   listed  in  any  of  the
          Certificates  (as defined in and attached to such opinion).  In giving
          the  opinion  expressed  in clause  (c) of the  immediately  preceding
          sentence,  such counsel may express no opinion regarding compliance by
          the Company or any subsidiary with any financial covenants required to
          be maintained by the Company or any subsidiary  under any agreement or
          document;

               (viii) No consent, approval,  authorization,  order, registration
          or qualification  of or with any such court or governmental  agency or
          body  is  required  for  the  issue  and  sale  of the  Shares  or the
          consummation by the Company of the  transactions  contemplated by this
          Agreement,  except the registration  under the Act of the Shares,  and
          such   consents,   approvals,    authorizations,    registrations   or
          qualifications  as may be required under state  securities or Blue Sky
          laws;

               (ix) The statements set forth in the Prospectus under the caption
          "Description of Common Stock", insofar as they purport to constitute a
          summary of the terms of the Stock are  accurate,  complete and fair in
          all material respects;

                                       12
<PAGE>
               (x) The Company is not an "investment  company",  as such term is
          defined in the Investment Company Act;

               (xi) The documents incorporated by reference in the Prospectus as
          amended or  supplemented  as of the Closing Date (other than financial
          statements  and  schedules  and other  financial or  statistical  data
          included or incorporated by reference therein or omitted therefrom, as
          to  which  such  counsel  expresses  no  opinion),  when  they  became
          effective  or were  filed  with  the  Commission,  as the case may be,
          complied as to form in all material  respects with the requirements of
          the  Act or the  Exchange  Act,  as  applicable,  and  the  Rules  and
          Regulations of the Commission thereunder; and

               (xii) The  Registration  Statement and the  Prospectus,  and each
          amendment or  supplement  thereto,  as of the Closing Date (other than
          financial  statements and schedules and other financial or statistical
          data  included  or  incorporated  by  reference   therein  or  omitted
          therefrom, as to which such counsel expresses no opinion) comply as to
          form in all material respects with the requirements of the Act and the
          Rules and  Regulations  thereunder.  Although  such  counsel  does not
          assume any responsibility  for the accuracy,  completeness or fairness
          of the  statements  contained in the  Registration  Statements  or the
          Prospectus,  except for those  referred to in the opinion in Paragraph
          (ix)  hereof,  those  persons  in the  Lawyer  Group have no reason to
          believe that the Registration  Statement, as of its effective date, or
          the  Prospectus,  as of the date of the Prospectus  Supplement,  or in
          either case, as of the Closing Date, or any amendment  thereto,  as of
          the Closing  Date,  excluding in all cases  financial  statements  and
          schedules  and  other  financial  or  statistical   data  included  or
          incorporated by reference  therein or omitted  therefrom,  as to which
          such counsel  expresses no opinion,  contained any untrue statement of
          material  fact or omitted to state any  material  fact  required to be
          stated  therein  or  necessary  to make  the  statements  therein  not
          misleading.  To the actual  knowledge  of those  persons in the Lawyer
          Group, there are no legal or governmental  proceedings  required to be
          described in the  Prospectus  that are not described as required,  nor
          any contracts or documents of a character  required to be described in
          the  Registration  Statement  or  the  Prospectus  or to be  filed  as
          exhibits to the  Registration  Statement  that are not  described  and
          filed as required.

     In giving such opinion,  Snell & Wilmer L.L.P.  may rely to the extent such
counsel deems  appropriate  upon  certificates  of the Company as to any factual
matters  upon which any such  opinions  are based and may rely on the opinion of
Underwriters'  counsel as to all matters governed by the law of the State of New

                                       13
<PAGE>
York,  and  further may rely upon the  opinion of Morgan,  Lewis & Bockius  LLP,
delivered to you at the Closing Date, as to all matters under the Public Utility
Holding Company Act of 1935, as amended, and the Federal Power Act, as amended.

          (e) The Underwriters or the  Representatives  shall have received from
     counsel for the Underwriters  such opinion or opinions,  dated the relevant
     Closing  Date,  with  respect  to the  incorporation  of the  Company,  the
     validity of the Shares,  the Registration  Statement,  the Prospectus,  and
     other related matters as may reasonably be required,  and the Company shall
     have  furnished  to such  counsel  such  documents  as they request for the
     purpose of  enabling  them to pass upon such  matters.  In  rendering  such
     opinion,  such counsel may rely as to the  incorporation of the Company and
     all other  matters  governed  by the laws of the State of Arizona  upon the
     opinion of Snell & Wilmer L.L.P.

          (f) The  Underwriters  or the  Representatives  shall have  received a
     certificate  of  the  President  or  any  Vice  President  and a  principal
     financial or accounting officer of the Company,  dated the relevant Closing
     Date,  in  which  such  officers,  to the  best of  their  knowledge  after
     reasonable   investigation,   shall  state  that  the  representations  and
     warranties of the Company in this Agreement are true and correct,  that the
     Company has complied with all  agreements  and satisfied all  conditions on
     its part to be performed  or  satisfied  at or prior to such Closing  Date,
     that  no  stop  order  suspending  the  effectiveness  of the  Registration
     Statement  has been issued and no  proceedings  for that  purpose have been
     instituted or are contemplated by the Commission,  and that,  subsequent to
     the date of the most recent financial  statements in the Prospectus,  there
     has been no  material  adverse  change in, or any  development  involving a
     prospective  material  adverse  change,  in or affecting  the  consolidated
     financial  position,  stockholders'  equity or results of operations of the
     Company and its consolidated  subsidiaries,  otherwise than as set forth or
     contemplated in the Prospectus or as described in such certificate.

          (g) The  Underwriters  or the  Representatives  shall have  received a
     letter of Deloitte & Touche LLP,  dated the relevant  Closing  Date,  which
     meets the  requirements of subsection (a) of this Section,  except that the
     specified date referred to in such  subsection will be a date not more than
     three days prior to the Closing Date for the purposes of this subsection.

          (h) The Representatives  shall have received signed lock-up agreements
     in the form attached hereto as EXHIBIT A, dated the date of this Agreement,
     from each of the directors and executive officers (as defined under Section
     16 of the Exchange Act) of the Company.

          (i) The Company will furnish the  Underwriters or the  Representatives
     with such conformed  copies of such opinions,  certificates,  letters,  and
     documents as may be reasonably requested.

                                       14
<PAGE>
     6. Indemnification.

          (a) The Company will indemnify and hold harmless each  Underwriter and
     each person,  if any, who controls such  Underwriter  within the meaning of
     the Act  against  any  losses,  claims,  damages or  liabilities,  joint or
     several,  to which such Underwriter or such  controlling  person may become
     subject,  under  the Act or  otherwise,  insofar  as such  losses,  claims,
     damages, or liabilities (or actions in respect thereof) arise out of or are
     based upon any untrue statement or alleged untrue statement of any material
     fact contained in any part of the  Registration  Statement  relating to the
     Shares,  when such part became  effective,  any  preliminary  prospectus or
     preliminary  prospectus  supplement,  the  Prospectus,  or any amendment or
     supplement  thereto,  or arise out of or are  based  upon the  omission  or
     alleged  omission to state  therein a material  fact  required to be stated
     therein or necessary to make the  statements  therein not  misleading;  and
     will reimburse each  Underwriter and each such  controlling  person for any
     legal  or  other  expenses  reasonably  incurred,   as  incurred,  by  such
     Underwriter or such controlling  person in connection with investigating or
     defending any such loss, claim,  damage,  liability,  or action;  PROVIDED,
     HOWEVER, that the Company will not be liable in any such case to the extent
     that any such loss,  claim,  damage, or liability arises out of or is based
     upon an untrue statement or alleged untrue statement or omission or alleged
     omission  made in any of such  documents in reliance upon and in conformity
     with  written  information  furnished  to the  Company  by any  Underwriter
     through the  Representatives  specifically for use therein.  This indemnity
     agreement  will be in  addition  to any  liability  which the  Company  may
     otherwise have.

          (b) Each Underwriter will severally and not jointly indemnify and hold
     harmless the Company, each of its directors,  each of its officers who have
     signed the Registration  Statement,  and each person,  if any, who controls
     the  Company  within the meaning of the Act,  against  any losses,  claims,
     damages, or liabilities to which the Company or any such director, officer,
     or  controlling  person may  become  subject,  under the Act or  otherwise,
     insofar as such losses,  claims,  damages,  or  liabilities  (or actions in
     respect  thereof)  arise out of or are based upon any untrue  statement  or
     alleged untrue  statement of any material fact contained in any part of the
     Registration  Statement  relating  to the  Shares,  when such  part  became
     effective, any preliminary prospectus or preliminary prospectus supplement,
     the Prospectus,  or any amendment or supplement thereto, or arise out of or
     are based upon the  omission  or the alleged  omission  to state  therein a
     material  fact  required  to be stated  therein  or  necessary  to make the
     statements therein not misleading,  in each case to the extent, but only to
     the extent,  that such untrue  statement  or alleged  untrue  statement  or
     omission or alleged  omission was made in reliance  upon and in  conformity
     with  written  information  furnished  to the  Company  by any  Underwriter
     through  the  Representatives   specifically  for  use  therein;  and  will
     reimburse any legal or other expenses reasonably incurred,  as incurred, by
     the  Company  or any such  director,  officer,  or  controlling  person  in
     connection with  investigating or defending any such loss,  claim,  damage,
     liability,  or action.  This indemnity agreement will be in addition to any
     liability which such Underwriter may otherwise have.

          (c) Promptly after receipt by an indemnified  party under this Section
     of notice of the commencement of any action,  such indemnified  party will,
     if a claim in respect thereof is to be made against the indemnifying  party
     under this  Section,  notify  the  indemnifying  party of the  commencement

                                       15
<PAGE>
     thereof; but the failure to notify the indemnifying party shall not relieve
     it from any liability  that it may have under  subsection  (a) or (b) above
     except to the extent that it has been  materially  prejudiced  (through the
     forfeiture of substantive rights or defenses) by such failure; and provided
     further that the failure to notify the indemnifying party shall not relieve
     it from any liability  that it may have to an indemnified  party  otherwise
     than under  subsection (a) or (b) above. In case any such action is brought
     against any indemnified  party, and it notifies the  indemnifying  party of
     the  commencement  thereof,  the  indemnifying  party will be  entitled  to
     participate  therein and, to the extent that it may wish,  jointly with any
     other indemnifying party similarly notified, to assume the defense thereof,
     with counsel satisfactory to such indemnified party (who shall not, without
     the  consent of the  indemnified  party,  be  counsel  to the  indemnifying
     party),  and after notice from the  indemnifying  party to such indemnified
     party of its election so to assume the defense  thereof,  the  indemnifying
     party will not be liable to such  indemnified  party under this Section for
     any legal or other expenses subsequently incurred by such indemnified party
     in  connection  with the defense  thereof  other than  reasonable  costs of
     investigation. Notwithstanding the indemnifying party's election to appoint
     counsel to represent the  indemnified  party in an action,  the indemnified
     party  shall have the right to employ  separate  counsel  (including  local
     counsel),  and the indemnifying party shall bear the reasonable fees, costs
     and expenses of such separate  counsel if (i) the use of counsel  chosen by
     the  indemnifying  party to represent the  indemnified  party would present
     such  counsel  with a conflict of  interest,  (ii) the actual or  potential
     defendants in, or targets of, any such action include both the  indemnified
     party and the  indemnifying  party and the  indemnified  party  shall  have
     reasonably  concluded  that  there may be legal  defenses  available  to it
     and/or other indemnified  parties which are different from or additional to
     those available to the indemnifying  party,  (iii) the  indemnifying  party
     shall not have employed  counsel  satisfactory to the indemnified  party to
     represent the  indemnified  party within a reasonable  time after notice of
     the  institution  of such  action  or (iv)  the  indemnifying  party  shall
     authorize the indemnified  party to employ separate  counsel at the expense
     of the  indemnifying  party. An indemnifying  party shall not be liable for
     any settlement of a claim or action effected  without its written  consent,
     which shall not be unreasonably withheld.

          (d) If the indemnification provided for in this Section is unavailable
     or insufficient to hold harmless an indemnified  party for any loss, claim,
     damage, liability, or action described in subsection (a) or (b) above, then
     each  indemnifying  party shall contribute to the amount paid or payable by
     such  indemnified  party as a result  of the  losses,  claims,  damages  or
     liabilities  referred to in  subsection  (a) or (b) above on the  following
     basis: (1) if such loss, claim, damage,  liability,  or action arises under
     subsection  (a) above,  then (i) in such  proportion as is  appropriate  to
     reflect the relative  benefits  received by the Company on the one hand and
     the  Underwriters  on the other from the  offering of the Shares or (ii) if
     the allocation  provided by clause (i) above is not permitted by applicable
     law, in such  proportion as is appropriate to reflect not only the relative
     benefits referred to in clause (i) above but also the relative fault of the
     Company  on the one hand and the  Underwriters  on the other in  connection
     with the  statements or omissions  which  resulted in such losses,  claims,
     damages  or   liabilities   as  well  as  any  other   relevant   equitable
     considerations;  and (2) if such loss, claim, damage,  liability, or action
     arises  under  subsection  (b)  above,   then  in  such  proportion  as  is

                                       16
<PAGE>
     appropriate  to reflect the  relative  fault of the Company on the one hand
     and the  Underwriter  on the other in  connection  with the  statements  or
     omissions which resulted in such losses,  claims, damages or liabilities as
     well as any other relevant  equitable  considerations;  PROVIDED,  HOWEVER,
     that in no case shall any  Underwriter  (except as may be  provided  in any
     agreement  among  underwriters  relating to the  offering of the Shares) be
     responsible  for any  amount  in  excess of the  underwriting  discount  or
     commission   applicable  to  the  Shares   purchased  by  such  Underwriter
     hereunder.  For the  purposes of clause (1) above,  the  relative  benefits
     received by the Company on the one hand and the  Underwriters  on the other
     shall be deemed to be in the same proportion as the total net proceeds from
     the offering (before  deducting  expenses)  received by the Company bear to
     the  total   underwriting   discounts  and  commissions   received  by  the
     Underwriters.  For the purposes of clauses (1) and (2) above,  the relative
     fault shall be determined by reference to, among other things,  whether the
     untrue or alleged  untrue  statement of a material  fact or the omission or
     alleged  omission to state a material fact relates to information  supplied
     by the  Company  or the  Underwriters  and the  parties'  relative  intent,
     knowledge, access to information and opportunity to correct or prevent such
     untrue statement or omission.  The amount paid by an indemnified party as a
     result of the losses,  claims,  damages or  liabilities  referred to in the
     first sentence of this  subsection (d) shall be deemed to include any legal
     or  other  expenses  reasonably  incurred  by  such  indemnified  party  in
     connection with investigating or defending any action or claim which is the
     subject  of  this   subsection   (d).  No  person   guilty  of   fraudulent
     misrepresentation (within the meaning of Section 11(f) of the Act) shall be
     entitled  to  contribution  from  any  person  who was not  guilty  of such
     fraudulent   misrepresentation.   The  Underwriters'  obligations  in  this
     subsection (d) to contribute are several in proportion to their  respective
     underwriting obligations and not joint.

     7. DEFAULT OF UNDERWRITERS.  If any Underwriter or Underwriters  default in
their  obligations to purchase  Shares pursuant to this Agreement and the number
of Shares that such defaulting  Underwriter or Underwriters agreed but failed to
purchase  is ten  percent  (10%)  or less  of the  number  of  Shares  that  the
Underwriters are obligated to purchase,  the Underwriters or the Representatives
may make  arrangements  satisfactory  to the  Company  for the  purchase of such
Shares  by other  persons,  including  any of the  Underwriters,  but if no such
arrangements are made by the Closing Date the non-defaulting  Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Shares that such defaulting  Underwriter or Underwriters  agreed
but failed to purchase.  If any  Underwriter or  Underwriters so default and the
number of Shares with  respect to which such  default or defaults  occur is more
than the above-described  amount and arrangements  satisfactory to the remaining
Underwriters  and the Company for the  purchase of such Shares by other  persons
are not made within  thirty-six  hours after such default,  this  Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company,  except as provided in Section 8. As used in this  Agreement,  the term
"Underwriter"  includes any person  substituted  for an  Underwriter  under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.

                                       17
<PAGE>
     8. SURVIVAL OF CERTAIN  REPRESENTATIONS  AND  OBLIGATIONS.  The  respective
indemnities,  agreements,  representations,  warranties, and other statements of
the  Company  or its  officers  and of the  Underwriters  set  forth  in or made
pursuant to this  Agreement  will remain in full force and effect  regardless of
any investigation,  or statement as to the results thereof, made by or on behalf
of the  Underwriters  or the Company or any of its  officers or directors or any
controlling  person, and will survive delivery of and payment for the Shares. If
this  Agreement  is  terminated  pursuant  to  Section 7, or if for any reason a
purchase pursuant to this Agreement is not consummated, the Company shall remain
responsible  for the expenses to be paid or reimbursed by it pursuant to Section
4 and the respective obligations of the Company and the Underwriters pursuant to
Section 6 shall remain in effect.

     9. NOTICES. All communications hereunder relating to any offering of Shares
will be in writing, and, if sent to the Underwriters,  may be mailed, delivered,
or  telecopied  and  confirmed to the  Representatives,  c/o Credit Suisse First
Boston Corporation,  Eleven Madison Avenue, New York, New York 10010, Attention:
Transactions  Advisory  Group (fax:  212-325-4296)  and c/o Salomon Smith Barney
Inc., 388 Greenwich Street, New York, NY 10013 Attention: Canem Arkan; provided,
however, that any notice to an Underwriter pursuant to Section 6 will be mailed,
delivered,  or  telecopied  and  confirmed to each such  Underwriter  at its own
address.  All  communications  hereunder  to the Company  shall be mailed to the
Company,  Attention:  Treasurer, at P.O. Box 53999, Phoenix, Arizona 85072-3999,
or  delivered,  or  telecopied  and  confirmed to the Company at 400 North Fifth
Street, Phoenix, Arizona 85004 (fax: 602-250-5640).

     10. SUCCESSORS.  This Agreement will inure to the benefit of and be binding
upon the parties  hereto and the  Underwriter  or  Underwriters  as are named in
Schedule A hereto and their respective successors and the officers and directors
and controlling  persons referred to in Section 6, and no other person will have
any right or obligation hereunder.

     11.  REPRESENTATION OF UNDERWRITERS.  The  Representatives  may act for the
Underwriters in connection with the offering contemplated by this Agreement, and
any action under this  Agreement  taken by the  Representatives  jointly will be
binding upon the Underwriters.

     12. EXECUTION IN COUNTERPART. This Agreement may be executed in one or more
counterparts,  each of which  shall be  deemed to be an  original,  but all such
respective counterparts shall together constitute a single instrument.

                                       18
<PAGE>
     If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed  duplicate  hereof,  whereupon it will
become  a  binding  agreement  between  the  Company  and  the  Underwriters  in
accordance with its terms.


                                        Very truly yours,

                                        PINNACLE WEST CAPITAL CORPORATION



                                        By: Barbara M. Gomez
                                            ------------------------------------
                                            Name: Barbara M. Gomez
                                            Title: Treasurer


The foregoing  Underwriting Agreement is hereby confirmed and accepted as of the
date  first  above  written,  on behalf  of  themselves  and the  other  several
Underwriters named in Schedule A.

Credit Suisse First Boston Corporation
Salomon Smith Barney Inc.

By:  CREDIT SUISSE FIRST BOSTON CORPORATION, as Representative


By: Rodney Miller
    ------------------------------------------
    (Credit Suisse First Boston Corporation)

                                       19
<PAGE>
                                   SCHEDULE A

Underwriter                                                Number of Firm Shares
-----------                                                ---------------------

Credit Suisse First Boston Corporation .................          1,425,000
Salomon Smith Barney Inc. ..............................          1,425,000
Barclays Capital, Inc. .................................          1,425,000
J.P. Morgan Securities Inc. ............................            555,750
UBS Warburg LLC ........................................            555,750
BNY Capital Markets, Inc. ..............................            156,750
KBC Financial Products USA Inc. ........................            156,750
                                                                  ---------
Total ..................................................          5,700,000
                                                                  =========

                                       20
<PAGE>
                                    EXHIBIT A


                                [FORM OF LOCK-UP]

                                       21
<PAGE>
                                                               December __, 2002


Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY   10010-3629

Salomon Smith Barney Inc.
388 Greenwich Street
New York, NY 10013

Ladies and Gentlemen:

     As an inducement to the Underwriters to execute the Underwriting Agreement,
pursuant  to which an  offering  will be made that is  intended  to result in an
orderly market for the Common Stock, no par value per share, (the  "SECURITIES")
of Pinnacle West Capital Corporation, and any successor (by merger or otherwise)
thereto,  (the  "COMPANY"),  the  undersigned  hereby  agrees that from the date
hereof and until 90 days after the public  offering  date set forth on the final
prospectus used to sell the Securities (the "PUBLIC  OFFERING DATE") pursuant to
the Underwriting  Agreement,  to which you are or expect to become parties,  the
undersigned will not offer, sell,  contract to sell, pledge or otherwise dispose
of, directly or indirectly,  any shares of Securities or securities  convertible
into or exchangeable  or exercisable for any shares of Securities,  enter into a
transaction  which would have the same effect,  or enter into any swap, hedge or
other  arrangement  that  transfers,  in whole or in part,  any of the  economic
consequences  of ownership of the  Securities,  whether any such  aforementioned
transaction  is to be  settled  by  delivery  of the  Securities  or such  other
securities, in cash or otherwise, or publicly disclose the intention to make any
such offer, sale, pledge or disposition,  or to enter into any such transaction,
swap,  hedge or other  arrangement,  without,  in each case,  the prior  written
consent of Credit Suisse First Boston  Corporation and Salomon Smith Barney Inc.
In addition,  the undersigned  agrees that, without the prior written consent of
Credit  Suisse  First Boston  Corporation  and Salomon  Smith  Barney Inc.,  the
undersigned will not, during the period commencing on the date hereof and ending
90 days after the Public  Offering  Date,  make any demand for or  exercise  any
right with  respect  to, the  registration  of any  Securities  or any  security
convertible into or exercisable or exchangeable for the Securities.

     Any Securities received upon exercise of options granted to the undersigned
will  also  be  subject  to  this  Agreement.  Any  Securities  acquired  by the
undersigned  in the open  market  after the  completion  of the  offering of the
Securities will not be subject to this Agreement. A bona fide gift or a transfer
of  Securities  to a family  member  or trust  may be  made,  provided  the gift
recipient  or  transferee  agrees  to be bound in  writing  by the terms of this
Agreement.

     In  furtherance  of the  foregoing,  the Company and its transfer agent and
registrar  are hereby  authorized  to decline to make any  transfer of shares of
Securities  if such  transfer  would  constitute  a violation  or breach of this
Agreement

     This  Agreement  shall be binding on the  undersigned  and the  successors,
heirs, personal  representatives and assigns of the undersigned.  This Agreement
shall lapse and become null and void if the Public  Offering Date shall not have
occurred on or before December 31, 2002.

                                        Very truly yours,


                                        ----------------------------------------
                                        [NAME]

                                       22

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.19
<SEQUENCE>4
<FILENAME>ex4-19.txt
<DESCRIPTION>STOCK CERTIFICATE SPECIMEN
<TEXT>
                                                                    Exhibit 4.19

  NUMBER       COMMON STOCK                                     COMMON STOCK
PNW

     THIS CERTIFICATE IS TRANSFERABLE                              SHARES
         IN THE CITIES OF PHOENIX
              OR NEW YORK
                                                               SEE REVERSE FOR
                                                             CERTAIN DEFINITIONS
INCORPORATED UNDER THE LAWS OF          PINNACLE WEST
     THE STATE OF ARIZONA            CAPITAL CORPORATION       CUSIP 723484 10 1

  THIS CERTIFIES THAT _________________________________________________________


   IS THE OWNER OF ___________________________________________________________

  FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK WITHOUT PAR VALUE OF

       PINNACLE WEST CAPITAL CORPORATION, TRANSFERABLE ON THE BOOKS OF THE
  CORPORATION IN PERSON OR BY DULY AUTHORIZED ATTORNEY UPON SURRENDER OF THIS
CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE IS NOT VALID UNTIL COUNTERSIGNED
             BY THE TRANSFER AGENT AND REGISTERED BY THE REGISTRAR.

     WITNESS THE SEAL OF THE CORPORATION AND THE SIGNATURES OF ITS DULY
AUTHORIZED OFFICERS.

DATED:

                                   SEAL

     SECRETARY                                           PRESIDENT
                                               COUNTERSIGNED AND REGISTERED:
                                               PINNACLE WEST CAPITAL CORPORATION
                                               (Phoenix, Arizona)
                                               TRANSFER AGENT AND REGISTRAR
                                               AUTHORIZED SIGNATURE
<PAGE>

                               BACK OF CERTIFICATE

                        PINNACLE WEST CAPITAL CORPORATION

     For a description of the classes and series of stock of the Corporation and
a statement of the relative rights, designations, preferences, privileges,
voting powers, restrictions and qualifications thereof, and the authority of the
board of directors to determine variations for future series, reference is made
to the provisions of the Articles of Incorporation of the Corporation, and any
Certificate of the Corporation pursuant to Arizona Revised Statues, which may be
filed in the office of the Arizona Corporation Commission, and copies of which
will be on file with the Transfer Agent and will be supplied without charge to
the holder upon request in writing to the Corporation, Office of the Secretary.
The Stock of the Corporation is issued subject to all the provisions of said
Articles of Incorporation and any such Certificates of the Corporation and the
holder hereof agrees to such provisions by the acceptance of this certificate.

     This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in an Amended and Restated Rights Agreement between Pinnacle
West Capital Corporation and EquiServe Trust Company, N.A., (the "Rights
Agent"), dated as of March 26, 1999 (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which is on file at
the principal offices of Pinnacle West Capital Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may expire, or may be evidenced by separate certificates and will no
longer be evidenced by this certificate. Pinnacle West Capital Corporation will
mail to the holder of this certificate a copy of the Rights Agreement without
charge within five days after receipt of a written request therefor. Under
certain Circumstances, as set forth in Section 11(a)(ii) of the Rights
Agreement, Rights issued to Acquiring Persons (as defined in the Rights
Agreement) or certain related persons and any subsequent holder of such Rights
may become null and void.

     KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, OR DESTROYED
THE CORPORATION MAY REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE
OF A REPLACEMENT CERTIFICATE.

     The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

<TABLE>
<S>                                                <C>
     TEN COM --- as tenants in common                UNIF GIFT MIN ACT --- ___________Custodian ___________ under
     TEN ENT --- as tenants by the entireties                                (Cust)               (Minor)
     JT TEN  --- as joint tenants with right of                           Uniform Gifts to Minors Act___________
                 Survivorship and not as tenants                                                       (State)
                 in common
     TOD     --- transfer on death                   UNIF TRF MIN ACT  --- ___________Custodian (until age ___)
                                                                             (Cust)
                                                                           __________ under Uniform Transfers
                                                                             (Minor)
                                                                           to Minors Act ____________________
                                                                                                (State)
</TABLE>

     Additional abbreviations may also be used though not in the above list.

     FOR VALUED RECEIVED, ________________, hereby sell, assign and transfer
unto

------------------------------------------------
    PLEASE INSERT SOCIAL SECURITY OR OTHER
        IDENTIFYING NUMBER OF ASSIGNEE
------------------------------------------------

--------------------------------------------------------------------------------
  (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------


__________________________________________________________________________Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

________________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

DATED _____________________________________________________

<TABLE>
<S>                                              <C>
Signature(s) Guaranteed                                   X _________________________________________

                                                          X _________________________________________
                                                  NOTICE:   THE SIGNATURE(S) TO THIS ASSIGNMENT
                                                            MUST CORRESPOND WITH THE NAME(S) AS
By_________________________________________                 WRITTEN UPON THE FACE OF THE CERTIFICATE
                                                            IN EVERY PARTICULAR, WITHOUT ALTERATION
THE SIGNATURE(S) MUST BE GUARANTEED BY                      OR ENLARGMENT OR ANY CHANGE WHATEVER.
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM), PURSUANT TO  S.E.C. RULE 17Ad-15.
</TABLE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>5
<FILENAME>ex5-1.txt
<DESCRIPTION>OPINION OF SNELL & WILMER L.L.P.
<TEXT>
                                                                     Exhibit 5.1

                                December 17, 2002

Pinnacle West Capital Corporation
400 North Fifth Street
Phoenix, Arizona 85004

     Re:  Registration Statement on Form S-3

Ladies and Gentlemen:

     We have acted as counsel to Pinnacle West Capital  Corporation,  an Arizona
corporation  (the  "Company"),   in  connection  with  the  preparation  of  the
registration statement on Form S-3, No. 333-101457 filed with the Securities and
Exchange  Commission (the  "Commission") by the Company on November 25, 2002 and
declared  effective by the  Commission on December 5, 2002 and the  registration
statement on Form S-3, No. 333-52476 filed with the Commission by the Company on
December 21, 2000 and declared  effective by the  Commission on January 11, 2001
(collectively,  the  "Registration  Statements").  The  Registration  Statements
relate to the issuance  and sale from time to time,  pursuant to Rule 415 of the
General Rules and Regulations (the "Rules") promulgated under the Securities Act
of 1933, as amended (the  "Securities  Act"),  of common stock, no par value, of
the Company ("Common  Stock") and other  securities,  with an aggregate  initial
public  offering price of up to  $600,000,000.  We have also acted as counsel to
the Company in  connection  with the offering and sale of 5,700,000  shares (the
"Firm Shares"),  pursuant to the Underwriting  Agreement dated December 17, 2002
(the  "Underwriting  Agreement")  between the Company and the underwriters named
therein (the  "Underwriters"),  and, at the election of the Underwriters,  up to
855,000  additional  shares (the  "Optional  Shares" and together  with the Firm
Shares, the "Offered Shares").

     This opinion is  delivered  in  accordance  with the  requirements  of Item
601(b)(5) of Regulation S-K under the  Securities  Act. We have examined (i) the
Registration Statements; (ii) the definitive prospectus, dated December 5, 2002,
and  the  prospectus   supplement  dated  December  17,  2002  (the  "Prospectus
Supplement")  (such  prospectus,   Prospectus   Supplement,   and  all  material
incorporated   therein  by  reference  being  hereinafter  referred  to  as  the
"Prospectus"),  relating to the Offered  Shares;  (iii) the Amended and Restated
Articles of  Incorporation  of the Company,  as  currently  in effect;  (iv) the
Bylaws of the Company as currently in effect; (v) the resolutions adopted by the
Board of Directors  of the Company and by the Special  Committee of the Board of
Directors of the Company relating to the filing of the  Registration  Statements
and the  offering  and sale of the  Offered  Shares;  and (vi) the  Underwriting
Agreement.  We have also  examined  originals or copies,  certified or otherwise
identified  to our  satisfaction,  of  such  records  of the  Company  and  such
<PAGE>
Pinnacle West Capital Corporation
December 17, 2002
Page 2

agreements,  certificates of public officials, certificates of officers or other
representatives   of  the  Company  and  others,   and  such  other   documents,
certificates  and records as we have deemed  necessary or appropriate as a basis
for the opinions set forth herein.

     Based  upon the  foregoing  and in  reliance  thereon,  and  subject to the
qualifications  and  limitations  set forth herein,  we are of the opinion that,
upon the  issuance  and delivery of the Offered  Shares in  accordance  with the
Underwriting  Agreement and receipt by the Company of the consideration therefor
set forth in the Prospectus,  and further  assuming that the Offered Shares have
been duly authenticated, executed, countersigned,  registered and delivered upon
payment  therefor,  the Offered Shares will be duly authorized,  validly issued,
fully paid and nonassessable.

     We do not express any opinion as to the laws of any jurisdiction other than
the laws of the State of Arizona  and the laws of the United  States of America.
This  opinion  is  limited  to the laws,  including  the  rules and  regulations
thereunder,  as in effect on the date  hereof.  We disclaim  any  obligation  to
advise you of any change in any of these sources of law or  subsequent  legal or
factual  developments  which  might  affect any  matters or  opinions  set forth
herein.

     We hereby  consent to the filing of this opinion with the  Commission as an
exhibit to the Registration Statement. In giving this consent, we do not thereby
admit that we are in the  category of persons  whose  consent is required  under
Section 7 of the Securities  Act or the rules and  regulations of the Commission
promulgated thereunder.

                                        Very truly yours,

                                        Snell & Wilmer LLP

                                        Snell & Wilmer LLP

</TEXT>
</DOCUMENT>
</SUBMISSION>
