EXHIBIT 10.1

                              THIRD AMENDMENT TO
                         ARIZONA PUBLIC SERVICE COMPANY
                      DIRECTORS' DEFERRED COMPENSATION PLAN


            Effective January 1, 1982, ARIZONA PUBLIC SERVICE COMPANY (the
"Company") adopted the ARIZONA PUBLIC SERVICE COMPANY DIRECTORS' DEFERRED
COMPENSATION PLAN (the "Plan"). The Plan was subsequently amended and restated
in its entirety effective January 1, 1986. The Plan was thereafter amended
effective January 1, 1991 and January 1, 1993. By this instrument, the Company
desires to amend the Plan to offset any benefits payable to or on behalf of a
participant by any benefits payable to or on behalf of that participant under
the Pinnacle West Capital Corporation, Arizona Public Service Company, SunCor
Development Company and El Dorado Investment Company Supplemental Executive
Benefit Plan.

            1.     This Amendment shall amend only the provisions of the Plan as
    set forth herein, and those provisions not expressly amended hereby shall be
    considered in full force and effect.

            2.     Section V of the Plan is hereby amended to add a new
    Paragraph F at the end thereof, which shall read as follows:

                   F. Benefit Offset. Notwithstanding anything in this Section V
       or the Plan to the contrary, if benefits become payable under the
       Pinnacle West Capital Corporation, Arizona Public Service Company, SunCor
       Development Company and El Dorado Investment Company Supplemental
       Executive Benefit Plan (the "SEBP"), the benefits payable to a
       Participant or his Beneficiary under this Section V shall be aggregated
       with any benefits payable to the Participant or his designated
       beneficiary under the Pinnacle West Capital Corporation, Arizona Public
       Service Company, SunCor Development Company and El Dorado Investment
       Company Deferred Compensation Plan and the aggregated benefits shall be
       offset and reduced by any benefits payable to that Participant or his
       designated beneficiary under the SEBP. For purposes of this Paragraph F,
       the benefits payable under this Section V shall be determined by the
       Committee, in its sole and absolute discretion, as of the date the
       benefits are paid to the Participant or his designated beneficiary under
       the SEBP and without regard to the offset required by this Paragraph F.


            3.     Section VI of the Plan is hereby amended to add a new
    Paragraph M at the end thereof, which shall read as follows:

                   M. Benefit Offset. Notwithstanding anything in this Section
       VI or the Plan to the contrary, if benefits become payable under the
       Pinnacle West Capital Corporation, Arizona Public Service Company, SunCor
       Development Company and El Dorado Investment Company Supplemental
       Executive Benefit Plan (the "SEBP"), the present value of the benefits
       payable to a Participant or his Beneficiary under this Section VI shall
       be aggregated with any benefits payable to the Participant or his
       beneficiary under the Pinnacle West Capital Corporation, Arizona Public
       Service Company, SunCor Development Company and El Dorado Investment
       Company Deferred Compensation Plan and the aggregated benefits shall be
       offset and reduced by any benefits payable to that Participant or his
       designated beneficiary under the SEBP. For purposes of this Paragraph M,
       the present value of the benefits payable under this Section VI shall be
       determined as of the date the benefits are paid to the Participant or his
       designated beneficiary under the SEBP and without regard to the offset
       required by this Paragraph M. Present value shall be determined by the
       Committee in its sole and absolute discretion.


            4.     The provisions of this Amendment shall be effective as of May
    1, 1993.

            Except as amended and supplemented by this instrument, the Company
hereby ratifies the Plan as restated effective January 1, 1986 and thereafter
amended.
            DATED:  August 1, 1994.

                                           ARIZONA PUBLIC SERVICE COMPANY



                                           By: Armando Flores
                                               ----------------------
                                               Its: HR Vice-President
                                                    -----------------