APS Announces Plans for Seasonal Operations at Four Corners Power Plant

Rhea-AI Summary

Arizona Public Service Co. (APS) announced an agreement among owners of the Four Corners Power Plant to initiate seasonal operations starting fall 2023, pending approvals. This move coincides with PNM's planned transfer of ownership to NTEC in 2024. Seasonal operations are projected to cut annual carbon emissions by 20-25%, aiding APS's goal of achieving 100% clean energy by 2050. The plant will operate one unit from June to October, meeting high seasonal demand, while the second unit operates year-round. There will be no layoffs as part of this transition.

Positive

• Projected 20-25% reduction in annual carbon emissions due to seasonal operations.
• Continued reliable service during peak demand in summer months.
• No layoffs or furloughs of APS employees during the transition.
• Aligns with APS's goal of 100% clean energy by 2050.

Negative

• None.

Arizona Public Service Co. (APS), an owner and operator of the Four Corners Power Plant, today announced plans of an agreement among plant owners Navajo Transitional Energy Company (NTEC), Public Service Company of New Mexico (PNM), Salt River Project (SRP) and Tucson Electric Power (TEP) to move toward operating the plant seasonally beginning fall 2023, subject to necessary approvals.

The agreement comes as PNM announced plans to transfer its share of ownership to NTEC in 2024. The transfer of ownership, in combination with seasonal operations, will bring substantial environmental benefits and ensure continued service reliability for customers, especially during Arizona’s notoriously hot summer months, as APS transitions to its planned exit from coal by 2031.

Compared to current conditions, the shift to seasonal operations will reduce annual carbon emissions by an estimated 20-25%, furthering APS’s commitment to achieve 100% clean energy by 2050 and the individual sustainability goals of the plant’s other owners. The Four Corners Power Plant has already cut annual nitrogen oxide emissions by 88% since the installation of selective catalytic reduction (SCR) equipment on Unit 4 and Unit 5 in 2018.

“Four Corners has provided reliable and affordable electricity for almost 60 years, fostering economic growth and prosperity in cities and towns throughout the region,” said Jacob Tetlow, Sr. Vice President of Operations at APS. “With seasonal operations, the plant will continue to be a critical source of reliable electricity when our customers need it most and enable a responsible transition to a cleaner energy future.”

In alignment with APS’s Coal Communities Transition, a $144 million proposal focused on supporting coal communities including the Navajo Nation, the plan toward seasonal operations at Four Corners Power Plant takes into consideration reliability, customer affordability and support for the Navajo Nation.

By moving to seasonal operations, Four Corners will become a more flexible resource that supports increasing amounts of clean energy, helping to compensate for the intermittent output of renewable resources. This change also helps ensure reliability of a critical energy source while reducing operations and maintenance costs.

Under seasonal operation, one of the plant’s two remaining units will operate only throughout the summer season of June through October when customers’ energy needs are the highest across the region. By contrast, the plant’s other unit will continue generating power year-round, subject to market conditions and planned maintenance outages.

The transition to seasonal operations will not require layoffs or furloughs of APS employees.

APS serves about 1.3 million homes and businesses in 11 of Arizona’s 15 counties, and is a leader in delivering affordable, clean and reliable 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, the nation’s largest producer of carbon-free electricity, and with one of the country’s most substantial renewable energy portfolios, APS’s current energy mix is 50% clean. With headquarters in Phoenix, APS is the principal subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).

Forward-Looking Statement
This press release contains forward-looking statements based on current expectations. These forward-looking statements are identified by words such as “estimates,” “plans” and similar words. Because actual results may differ materially from expectations, we caution readers not to place undue reliance on these statements. A number of factors could cause future results to differ materially from outcomes currently expected or sought by us. A discussion of some of these risks and uncertainties is contained in our Annual Report on Form 10-K and is available on our website at pinnaclewest.com, which readers should review carefully before placing any reliance on our forward-looking statements or disclosures. We assume no obligation to update any forward-looking statements, except as may be required by applicable law.

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FAQ

What are the seasonal operation plans for PNW related to the Four Corners Power Plant?

APS plans to operate the Four Corners Power Plant seasonally starting fall 2023, pending approvals.

How will seasonal operations impact carbon emissions for PNW?

Seasonal operations are expected to reduce annual carbon emissions by 20-25%.

What changes are occurring with ownership at the Four Corners Power Plant for PNW?

PNM will transfer its ownership share to NTEC in 2024.

Will APS employees be affected by the transition to seasonal operations for PNW?

No layoffs or furloughs of APS employees will occur due to this transition.