The Board of Directors for Arizona public power utility Salt River Project (SRP) has approved the purchase of a portion of Public Service Company of New Mexico’s (PNM) share of the Palo Verde Nuclear Generating Station west of Phoenix and certain transmission assets at a cost of approximately $70 million plus the cost of the associated nuclear fuel inventory.
SRP on Dec. 7 said that the purchase of 114 megawatts (MW) of energy from PNM in 2023-24 will help SRP meet customer demand that is growing significantly faster than the national average and defer planned capital expenditures associated with the construction of potential new generating assets.
“The purchase price represents an attractive economic opportunity for SRP as it is a fraction of the cost to build a new generating facility – something that has been part of SRP’s resource plan for years,” SRP said.
The additional zero-carbon emitting baseload energy from Palo Verde will reduce SRP’s overall carbon intensity and help SRP to meet its 2035 sustainability goals, it noted, which call for a reduction of carbon dioxide emitted by generation by 65 percent by 2035 and 90 percent by 2050. SRP is also reducing carbon emissions by adding 1,000 MW of solar energy by 2025 as well as new large-scale battery storage projects in Pinal County and the west Valley.
SRP CEO and General Manager Mike Hummel said that the additional energy from Palo Verde offers increased protection from potential price spikes or scarcity of other resources by adding to the diversity of SRP’s current resource portfolio.
The purchase of the first 104 MW is expected to be completed in January 2023 and the remaining 10 MW in 2024.
When completed, the purchase will bring SRP’s ownership share of Palo Verde from 689 MW (17.5 percent) to 803 MW or about 20 percent of the total plant capacity.
The Los Angeles Department of Water and Power and Southern California Public Power Authority also own stakes in Palo Verde – 5.7 percent and 5.9 percent, respectively.
Additional details on other parties that own stakes in the plant, as well as other information on the plant, are available here.
