Coal Is Out as APS Sets Carbon-Free Goal

The post Coal Is Out as APS Sets Carbon-Free Goal appeared first on POWER Magazine.

Arizona Public Service (APS) announced Jan. 22 that it plans for all its power generation to be carbon-free by 2050, and also said it plans to produce nearly half its power from renewable sources by 2030. APS joins other U.S. utilities who have put forth similar goals in recent years.

APS, which has been criticized by environmental groups for not moving more quickly toward carbon-free generation, said it will close the company's coal-fired Four Corners Power Plant in Fruitland, New Mexico, by 2031, seven years ahead of its scheduled closure. The utility, a subsidiary of Pinnacle West Capital, already has scheduled closure of its coal-fired Cholla Power Plant in Joseph City, Arizona, in 2025. The two plants combined produce about 22% of the utility's electricity.

APS also was among those with ownership stakes in the 2,250-MW coal-fired Navajo Generating Station near Page, Arizona, that was closed last year. The plant was the largest coal-fired facility in the southwestern U.S.

Nuclear Power Is Key to Carbon-Free Plan

"We see incredible things ahead for Arizona, and are excited to power our state's future with electricity that is 100 percent clean," said APS Chairman and CEO Jeff Guldner in a Wednesday news release. "We're starting from an energy mix that is 50 percent clean today, including energy efficiency and electricity from one of the nation's largest solar fleets and the country's most powerful carbon-free and clean energy resource - the Palo Verde Generating Station."

Palo Verde, located west of Phoenix, has a generation capacity of more than 3,900 MW, and is the largest U.S. nuclear power plant by capacity. The plant, which is co-owned by several utilities from California, Arizona, New Mexico, and Texas, supplies about a quarter of APS's power output. It received a POWER Top Plant award in 2015.

"Palo Verde is the core of this whole clean plan," Guldner said, noting the nuclear plant's continued operation is critical to achieving the carbon-free target.

Many States and Utilities Set Clean-Energy Targets

Guldner said the APS plan aligns with those adopted by utilities in neighboring states, including Colorado and New Mexico, though it is not as far-reaching as some plans adopted by California power generators.

Minneapolis-based Xcel Energy, which has customers in eight states and is the major power supplier in Colorado, earlier announced a goal to be 100% carbon-free by 2050. The state's governor, Jared Polis, has said he wants Colorado to be powered 100% by renewable energy by 2040.

New Mexico's Energy Transition Act requires the state's utilities to be carbon-free by 2045. Public Service New Mexico, the state's major utility, last year said it plans to be carbon-free by 2040. California in 2018 enacted a law requiring 60% of the state's power to come from renewables by 2030, with a goal of 100% carbon-free power by 2045.

Other states with carbon-free goals include Minnesota, Wisconsin, New Jersey, and Hawaii, which was the first state to commit to a clean energy mandate. New York Gov. Andrew Cuomo announced his "Green New Deal" for that state in January 2019. (For a look at renewable portfolio standards across the U.S., check out this infographic in the September 2019 issue of POWER.)

Uncertainty About Achieving Goals

"This is an important day for APS, our customers and Arizona," Guldner said. "Our clean energy plan will be guided by sound science, and will encourage market-based solutions to climate issues. Through increased collaboration with our customers, regulators and other stakeholders, we expect to achieve environmental and economic gains without undermining our commitment to affordable, reliable service."

Guldner admitted, though, that the announcement comes with uncertainty about how to achieve the company's goals. "Nobody today actually knows how you get to 100% carbon-free," he said. "I take some comfort from the fact that there are others who also believe we can get here to 100% by 2050 even if we don't know what the answers are."

APS gets just more than 25% of electricity from natural gas. Along with closing its coal plants, that means the utility must replace almost half its current generation in the next 30 years to meet its 2050 carbon-free goal.

Guldner said reaching the goal will require the use of technology not yet available for power generation. He said APS will increase its use of solar power, including large-scale power plants with energy storage.

Environmental Groups Welcome Decision

Wednesday's announcement was praised by environmental groups who often have been critical of APS.

"We welcome this decision by APS to greatly increase its use of renewable energy over the next decade and to commit to 100 percent carbon-free electricity generation by 2050," said Jon Goldin-Dubois, president of Western Resource Advocates, in an email to POWER. "We look forward to working with the utility and the Arizona Corporation Commission to help achieve and accelerate these goals. This important step by APS will benefit ratepayers, as renewable energy continues to be less expensive than fossil-fuel generation. At the same time, reducing the carbon emissions that drive climate change will result in better air quality, fewer climate costs and risks, and a healthier environment in Arizona, now and for future generations."

The Energy and Policy Institute, an environmental group that supports renewable energy and opposes the use of fossil fuels, last year criticized APS and its parent company, Pinnacle West Capital Corp., for being among the largest U.S. utilities with no plan to reduce carbon emissions. The group noted that other utilities were moving forward with plans, saying that, in addition to Xcel Energy, Idaho Power in 2019 announced that it had "set a goal to provide 100-percent clean energy by 2045," and that New Mexico's largest electric utility, PNM, announced that it had "set a goal of ensuring all our electricity is 100-percent emissions-free by 2040."

"Arizona is a small part in the overall climate-change discussions," Guldner said. "We definitely want to do our part in terms of helping to meet whatever ultimately happens with the global agreements on carbon reductions, but to me it's more important we have a realistic runway that says we can actually solve these problems so we can make a 2050 date."

Guldner said the utility will design plans to help the communities near the coal plants deal with the loss of jobs. "We do not take that transition lightly," he said. "And we are committed to working with our employees and stakeholders on the economic and other effects of retiring those assets."

Julia Hamm, president and CEO of the Smart Electric Power Alliance (SEPA), in a statement said, "A number of major U.S. utilities have made commitments to carbon-free by 2050, but Arizona Public Service stands out in the crowd. While any carbon reduction commitment is laudable, APS is among the very small handful of utilities that have coupled their commitment with an aggressive but reasonable interim target and specific actions that demonstrate meaningful progress." Hamm spoke with POWER in September 2019 about the role solar energy would play in helping achieve clean energy targets.

As You Sow, a group that has worked with APS on plans to reduce the company's reliance on fossil-fuel based energy, in an email to POWER said its supports APS's action plan.

"We commend APS for this important step toward addressing its climate impact and positioning itself to thrive in the coming clean energy economy," said Lila Holzman, energy program manager of As You Sow. "APS's leadership shows that it is feasible for the power sector to proactively plan to transition away from all fossil fuels. We are pleased that APS highlighted in its announcement an expectation to move beyond natural gas and focus on renewable energy and storage. Utilities must plan well in advance and avoid investing in fossil assets with high potential for stranding."

Ballot Measure Defeated in 2018

Pinnacle West spent $37.9 million in a 2018 effort to defeat Proposition 127, an Arizona ballot measure that would have required the state's power producers to get half their electricity from renewable sources, such as solar and wind, by 2030. The measure was backed by Tom Steyer and his environmental group, NextGen America, which spent more than $23 million trying to pass the measure. Steyer, from California, is among those seeking the Democratic Party's presidential nomination.

Guldner at the time said APS opposed the ballot measure because it would have amended the state constitution, and would not allow flexibility to address new technologies and costs in coming years. Guldner said the measure, handily defeated by voters, promoted renewables, but did not address reducing carbon emissions.

Guldner said APS will work with Arizona's public universities to design a path to reach the carbon-free goal. "ASU [Arizona State University] is excited to see Arizona's largest electricity provider reimagine our state's energy sector with this bold commitment to clean power generation," said ASU President Michael Crow in a statement. "We are excited to be among the early collaborators in APS' carbon-free future so imperative to our long-term quality of life."

APS will submit a new integrated resource plan to state regulators in the next few months that will address moves the utility will make to reduce emissions and increase its use of renewable energy.

-Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).

The post Coal Is Out as APS Sets Carbon-Free Goal appeared first on POWER Magazine.