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APS
APS Takes Big-Picture Look at Arizona's Energy Future in 15-Year Forecast
Company increasing flexible resources and grid investment to continue providing clean, reliable and affordable electricity



April 13, 2017

APS customers will benefit from increasingly clean, reliable and affordable energy - and a smarter, stronger energy grid - through steps outlined in the company's 2017 Integrated Resource Plan. The Integrated Resource Plan (IRP), the result of a three-year-long stakeholder process, outlines how APS plans to meet customers' projected energy needs over the next 15 years.

"The 2017 Integrated Resource Plan outlines how our investment in a smarter energy infrastructure will benefit customers through innovation, reliability and more ways to control their energy use," said Tammy McLeod, APS Vice President of Resource Management. "Overall, our energy mix is increasingly cleaner, and we are adding more quick-starting power sources to integrate our growing solar energy resources and emerging technologies."

Specifically, customers may see:

  • Increased use of solar energy and energy efficiency will meet nearly 50 percent of the anticipated new energy growth. APS predicts a significant increase in private rooftop solar capacity and support from energy efficiency programs. APS continues to meet the energy efficiency standard set by the ACC, which is one of the nation's most aggressive standards, and is focusing on peak-period measures, which include energy efficiency, demand response and load-shifting programs, going forward.
  • Addition of battery storage from existing pilot programs to over 500 MW of capacity enables APS to support growing intermittent renewable energy resources such as solar. APS is taking the lead in Arizona's deployment of energy storage, advanced inverters, and other controllable resources to better manage peak demand, minimize carbon emissions and solve renewable energy integration challenges for the benefit of all APS customers.
  • Continued operation of the nation's largest carbon-free energy resource, the Palo Verde Nuclear Generating Station, will anchor APS's energy mix. Palo Verde produces nearly 80 percent of Arizona's carbon-free energy. Overall, half of APS's current energy mix is carbon-free (25 percent nuclear, 13 percent energy efficiency, 12 percent renewables). APS anticipates meeting customers' increasing energy needs while reducing carbon intensity by 23 percent and water intensity by 29 percent.
  • Development of advanced grid technologies such as distributed energy resources, batteries and microgrids, while continuing research programs that evaluate how solar, energy storage and other technologies interact with each other is a priority for APS. APS recently deployed a new distribution operations system that increases situational awareness using real-time capabilities, allowing operators to react more quickly to outages and more efficiently integrate distributed energy resources.
  • A reduction in coal generation and increased environmental controls at existing units contribute to a cleaner energy mix for APS and Arizona. Over the next 15 years, coal's contribution to the APS energy mix will fall from 21 percent to 11 percent, and in the near-term the Four Corners power plant will see a 90 percent reduction of nitrogen oxide (NOx) levels.
  • A balanced and diverse energy mix that includes more flexible capacity is needed to integrate renewable energy resources throughout the year. Natural gas is planned to grow from 26 percent to 33 percent of the APS energy mix by 2032. It's abundant, affordable, reliable, flexible and responsive to customer demand. Natural gas generation provides much-needed summer peaking capacity, is fast ramping to enable renewable integration and is also a low-emissions fuel that contributes to a cleaner energy mix.
  • Modernization of the Ocotillo Power Plant with quick-start natural gas-fired units is an example of one of many upgrades APS is making to the grid. The upgrades at Ocotillo provide the flexibility to maintain a balanced, reliable power supply, particularly when renewable resources are not generating power during weather interruptions and when the sun is setting and solar stops producing. APS will continue to invest significantly in grid upgrades and maintenance to maintain reliable service.

"Increasing renewable resources, energy efficiency and energy technologies, supported with highly responsive resources such as natural gas generation, will enable APS to deliver cleaner, reliable and reasonably priced electricity," said McLeod. "Resources that we can turn on and off quickly are critical in maintaining power reliability while keeping costs low for customers."

Additionally, APS will continue to pursue opportunities to increase operating efficiency and save customers money, such as participating in the CAISO Energy Imbalance Market and purchasing excess energy from short-term markets at low or negative (i.e., paid to take) prices.

APS's resource requirement is expected to reach 13,000 MW by year 2032 or about 60 percent higher than today's forecast resource requirement of approximately 8,000 MW, as a result of anticipated population growth and greater economic activity in Arizona. When determining how to meet the increased need, APS chose the combination of resource options that met a number of objectives for customers: affordability, flexibility, reliability, risk management and sustainability.

"The IRP is our strategic road map for securing energy resources that enable us to supply electricity now and in the future," McLeod said. "Advancing technologies, growing renewable energy resources and increasing customer sentiment for cleaner energy are accelerating change in the electric utility industry. A number of factors could cause actual results to differ from the IRP's 15-year forecast, but no matter what we'll work to ensure a reliable and affordable energy future for our customers."

APS's 2017 Integrated Resource Plan is available at aps.com/resources.

APS serves about 2.7 million people in 11 of Arizona's 15 counties, and is the Southwest's foremost producer of clean, safe and reliable electricity. Using a balanced energy mix that is nearly 50 percent carbon-free, APS has one of the country's most substantial renewable energy portfolios, and owns and operates the Palo Verde Nuclear Generating Station, the country's top power producer and largest producer of carbon-free energy. The company is also a proven leader in introducing technology and services that offer customers choice and control over their energy consumption. With headquarters in Phoenix, APS is the principal subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).

For more information:

Organization:
APS
Address:
400 North 5th Street
Phoenix, Arizona
United States, 85004
www.aps.com

Contact:
Ted Geisler
Analyst Contact
Tel: 602-250-3200

Contact:
Anna Stewart
Media Contact:
Tel: 602-250-2104


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