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Press release from Business Wire

Suspicious Item at Palo Verde Proves to Be a Smoke Flare

<p class=' bwalignc'> <i>Plant Security, Law Enforcement Agencies Respond with Coordination and Effectiveness</i> </p>

Wednesday, October 13, 2010

Suspicious Item at Palo Verde Proves to Be a Smoke Flare18:34 EDT Wednesday, October 13, 2010 PHOENIX (Business Wire) -- Law enforcement officials have determined that a suspicious item found early this morning by security forces at the Palo Verde Nuclear Generating Station is a non-explosive device that never posed a threat to plant operations or employees. The item, four to six inches long with a fuse, was a commercially produced smoke flare, according to officials at the Maricopa County Sheriff's Office who responded to the incident and later disposed of the item. Security forces at Palo Verde discovered the item at 4:45 a.m. during the routine search of an incoming vehicle driven by a contract employee. The contractor was attempting to enter the site at the beginning of a shift through the main security check point – nearly a mile from the protected area of the plant. The security officers, following plant procedures, responded with caution and took the careful approach of closing the checkpoint and suspending incoming and outgoing vehicle traffic to Palo Verde. This is part of the plant's commitment to protect the health and safety of the public and employees. “Palo Verde Security officers did exactly what we would expect of them – they identified a potential threat and took appropriate action to protect their co-workers, our neighbors and the plant. They demonstrated diligence and a strong commitment to safety and security,” said Bob Bement, Vice President of Nuclear Operations. “We also thank and commend the many law enforcement agencies that responded quickly and are engaged with us in the on-going investigation.” The checkpoint remained closed for approximately 3-1/2 hours while personnel from the MCSO and the City of Phoenix Fire Department responded. MCSO secured the item and removed it from the site, at which time the main security checkpoint was reopened to normal traffic at 8:45 a.m. The temporary halt of incoming and outgoing employee traffic did not impact the safe operation of the plant. Units 1 and 2 are operating at full power, while Unit 3 is shut down for a scheduled refueling and maintenance outage. The Palo Verde Nuclear Generating Station is operated by APS. APS, Arizona's largest and longest-serving electricity utility, with more than 1.1 million customers in 11 of the state's 15 counties. With headquarters in Phoenix, APS is the largest subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).