Regulatory Environment: Changes in regulatory policy or unfavorable decisions from the Arizona Corporation Commission (ACC) could negatively impact allowed rates of return, cost recovery, and capital expenditures.

Climate and Environmental Compliance: Increased frequency of extreme weather events, wildfire risks, and the costs associated with transitioning to cleaner energy sources and meeting emissions targets pose financial and operational challenges.

Interest Rate Fluctuations: As a capital-intensive utility, rising interest rates increase the cost of debt financing, potentially impacting earnings if not fully recovered through regulated rates.