Coal, Gas, Nuclear

Palo Verde Unit 3 shuts down

PHOENIX, March 2, 2004 — Unit 3 at the Palo Verde Nuclear Generating Station shut down Saturday morning due to electrical issues regarding the turbine generator, but should return to service by early next week. The U.S. Nuclear Regulatory Commission was promptly notified of the event, which never endangered the health or safety of the public or plant workers.

Operators were preparing to manually shut down Unit 3 to address the issue when the turbine shut down automatically. All of the safety equipment operated normally during the shutdown.

During a thorough and routine inspection of Unit 3 on Sunday, workers identified a small indication of boron residue on a pressurizer heater sleeve inside the containment structure, which indicated a small leak. This heater sleeve will be repaired over the next few days. An on-going program to replace pressurizer heater sleeves in all three Palo Verde units began during the Unit 2 outage last year. Inspections of Unit 1 and Unit 3 heaters will take place during their upcoming refueling outages this spring and fall.

In an unrelated situation, Unit 2, which has been off line since Feb. 19, should return to service by the end of the week. Unit 2 was removed from service when operators discovered a very small tube leak in one of the unit’s two steam generators. As in this weekend’s situation with Unit 3, there was never a danger to the health and safety of the public or employees. Repairs have been made and testing completed. Unit 2 will begin the start-up process later today.

“It is important to understand that these events are unrelated,” said Jim Levine, executive vice president of Generation for Arizona Public Service Company (APS), which operates Palo Verde. “In each case we are taking steps that place safety first.”

Unit 1 continues to operate at full power and is scheduled for a routine refueling early next month.

Palo Verde is jointly owned by APS, Salt River Project, Southern California Edison Co., El Paso Electric, Public Service Co. of New Mexico, Southern California Public Power Authority and the Los Angeles Department of Water & Power.

APS, which operates Palo Verde on behalf of the station’s six other owners, is Arizona’s largest and longest-serving electric utility and serves about 902,000 customers in 11 of the state’s 15 counties. APS, with headquarters in Phoenix, is the largest subsidiary of Pinnacle West Capital Corporation (NYSE: PNW).