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PHOENIX - Arizona Public Service (APS) announced plans to build a new natural gas facility, a move the utility says will provide a major boost to Arizona's energy grid.
What we know:
Americans are consuming energy at an unprecedented rate, a trend that includes Arizona, according to APS Executive Vice President and COO Jacob Tetlow.
"This is unprecedented from a load growth standpoint," Tetlow said. "We have never in the history of our company seen customers asking for energy that would require us to more than triple the size of this utility."
Tetlow attributes much of the skyrocketing demand to artificial intelligence, noting that a small data center can use 40 to 60 times the energy of a single Walmart store.
"They use a lot of energy, these data centers that are running these large language models and AI algorithms," Tetlow said. "So that's a new challenge for us is to figure out how to serve that load."
Dig deeper:
To meet this demand, APS plans to build the Desert Sun Power Plant, a new natural gas facility west of Gila Bend.
"The site will be capable of about 2,000 megawatts (MW), two gigawatts of new capacity," Tetlow said. "That capacity is really focused on serving growth in Arizona. But it's also focused on ensuring reliability."
Tetlow said Phase One of the project will focus on existing customers and typical growth, including small business and residential expansion.
The second phase includes a model where data centers would pay for the construction of new plants.
"We're asking them to pay that expense if they want to be served," Tetlow explained. "It allows them to get to market a little quicker, gives them some price certainty. And the most important thing it does, it says there's no cost shift. It protects our residential customers from rate increases."
What's next:
Tetlow called the new plant necessary for the area, citing the two main goals as serving growth and ensuring reliability. Construction is scheduled to begin in 2028.