Arizona Public Service (APS) has signed agreements to add new energy supplies to its energy mix - APS's largest-ever planned addition of new power sources. In all, APS will add nearly 7,300 megawatts (MW) of renewable power, battery energy storage and natural gas to meet the state's growing demand for energy. Picture this, that's enough electricity to run nearly 1.4 million air conditioners at the same time. The deals, inked through its 2023 All Source Request for Proposals (ASRFP), will add new generation resources and expand existing power plants and power purchase agreements.
"With almost 7,300 MW of energy signed, this will be the largest energy supply we've ever procured through an RFP for APS customers. Most importantly, this portfolio will provide reliable, cost-competitive electricity, with 93% of this supply coming directly from clean energy technologies. I'm proud of our resource acquisition team's diligent work to close the best project deals with the most value for our customers," said Brian Cole, APS Vice President of Resource Management.
What's in store for APS customers?
Through APS's 2023 ASRFP, customers can anticipate a diverse mix of projects in operation as soon as 2026. The ASRFP is a unique market solicitation tool designed to allow respondents to submit project proposals for a broad range of technologies, with proposals then ranked and scored against one another according to their customer value. Projects include:
Solar Power
- New APS solar plant in development: The Ironwood Solar Plant will deliver nearly 170 MW of clean energy to customers. Located in Yuma County, the plant's construction has started and is anticipated to be in service in 2026.
- More solar power added: As an addition to APS's existing solar portfolio and strong customer rooftop solar, APS contracted for nearly 2,480 MW of solar resources through power purchase agreements that will continue to provide customers with clean and reliable electricity.
Battery Energy Storage
- Energy storage slated for APS solar plant: At the Agave Solar Plant, located in Maricopa County, more than 400,000 solar panels began serving customers with energy from the sun in 2023. Construction is underway to pair 150 MW of new battery energy storage with this facility to deliver solar power after sunset to customers.
- More energy storage through power purchase agreements: When solar power is abundant, storage units will be capable of capturing nearly 3,460 MW of energy. Grid operators can release it in the evening hours when customer demand is highest.
Wind Power
- Leveraging wind power from northern Arizona: APS secured more than 500 MW of additional wind power to serve customers. The wind power is generated in Navajo County.
Natural Gas
- Expanding current power plants to strengthen reliable service: With Arizona's continued record growth and extreme summer heat, natural gas, available on-demand 24/7, will continue to be an important part of keeping air conditioners running. The Sundance Power Plant in Pinal County will add two new units to provide 90 MW of flexible power, and planned expansions at the Redhawk Power Plant, in Maricopa County, will bring approximately 400 MW of energy. APS is also expanding an existing power purchase agreement by 30 MW to continue to provide customers with reliable, low-cost service. These natural gas additions are critical partners to the large quantities of solar and battery energy storage that will be added to APS's energy portfolio.
What's next for APS's energy grid and resource mix?
APS resource planners expect peak customer demand to grow to more than 13,000 MW by 2038. For perspective, it took APS 140 years to reach 8,200 MW of peak demand, and customer needs will increase by 60% in only 14 years. To prepare for this growing demand, APS is conducting a 2024 ASRFP.
This ASRFP is open to all technologies, and APS is seeking approximately 2,000 MW of resources. APS is targeting projects that can be in service beginning as early as 2028 and will explore longer range opportunities that can be in service into the 2030s. Project proposals will be reviewed through a transparent process monitored by an independent third party and will be evaluated against several customer-focused benchmarks, including reliability and cost-competitiveness. For more information on how to submit a project proposal, visit aps.com/rfp.
APS serves approximately 1.4 million homes and businesses in 11 of Arizona's 15 counties, and is a leader in delivering reliable, affordable and clean energy in the Southwest. The company is committed to serving customers with 100% clean power by 2050. As owner and operator of Palo Verde Generating Station, one of the nation's largest producers of carbon-free electricity, and with one of the country's most substantial renewable energy portfolios, APS's current energy mix is 51% clean. With headquarters in Phoenix, APS is the principal subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).
Forward-Looking Statements
This news release contains forward-looking statements based on current expectations. These forward-looking statements are often identified by words such as "estimate," "predict," "may," "believe," "plan," "expect," "require," "intend," "assume," "project," "anticipate," "goal," "seek," "strategy," "likely," "should," "will," "could," and similar words. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements. Several factors could cause future results to differ materially from historical results, or from outcomes currently expected or sought by Pinnacle West or APS. These factors include, but are not limited to:
- the current economic environment and its effects, such as lower economic growth, a tight labor market, inflation, supply chain delays, increased expenses, volatile capital markets, or other unpredictable effects;
- the ability of APS to manage capital expenditures and operations and maintenance costs while maintaining reliability and customer service levels;
- unforeseen changes in applicable law and regulations;
- the ability of APS to achieve its clean energy goals (including a goal by 2050 of 100% clean, carbon-free electricity); and
- general economic conditions, including inflation rates, monetary fluctuations, and supply chain constraints.
Contacts
Media Contact: Yessica del Rincon
480-209-8513
yessica.delrincon@aps.com
Website: aps.com/newsroom
