Arizona Public Service (APS) announced plans on Oct. 30 to develop a site west of Gila Bend, Ariz., capable of adding up to 2,000 megawatts of reliable, flexible generation to the state’s energy portfolio.
"The Desert Sun Power Plant will be a state-of-the-art natural gas facility designed to meet Arizona’s rapidly growing needs, support unprecedented demand from extra-large energy users and enhance integration of renewable energy resources – all while protecting affordability for residential and small business customers," it said.
This two-phase project will support current customer growth through our competitive procurement process in Phase 1 and enable new extra-large customer investments via an innovative subscription model in Phase 2, it said.
“Arizona’s energy needs are growing faster than at any time in our history,” said Jacob Tetlow, APS Executive Vice President and Chief Operating Officer. “Additional natural gas generation is essential to support our existing customers and to begin addressing unprecedented requests from extra-large energy users, such as data centers. By pursuing a ‘growth pays for growth’ strategy, this project protects customers while supporting data centers needed for the U.S. to compete globally.”
APS said the proposed subscription model ensures that Phase 2 would be paid for by the extra-large customers who would use it -- not by existing residential or business customers. Extra-large users would sign long-term contracts covering the capital costs and assuming development risks.
"By having extra-large energy users fund a portion of the plant’s capacity through long-term subscription agreements, APS can accelerate infrastructure development without shifting costs to existing customers," the investor-owned company said.
It said this approach:
• Helps protect and maintain fair prices for all customers.
• Safeguards reliable service around-the-clock, even when energy use is highest.
• Strengthens Arizona’s energy grid and transmission infrastructure.
• Supports a balanced energy portfolio that includes nuclear, solar, wind, battery storage, natural gas and coal.
“Phase 1 will support all customers, helping to meet spikes in demand – such as those on hot summer afternoons – and keeping electricity flowing when renewable power from solar and wind isn’t available,” Tetlow said. “Phase 2 ensures that as Arizona continues to grow, we are relying on innovative solutions to help protect existing customers from the costs associated with expansion. Partnering with our extra-high load customers to maintain cost fairness is a part of our plan.”
APS intends to supply the plant with natural gas via the proposed Transwestern Pipeline’s Desert Southwest expansion project.
To deliver electricity to customers, APS expects to build transmission infrastructure to connect Desert Sun to the grid. Phase 1 of the power plant is scheduled to begin serving customers by late 2030; Phase 2’s operation date will be determined through a collaborative process with participating extra-large customers.
