PHOENIX - Arizona’s largest electric utility said Wednesday that it plans to switch to 100% carbon-neutral power generation by 2050, a sharp turnaround from a company that spent tens of millions of dollars two years ago to fight a ballot measure requiring it to use renewable sources.
The move by Arizona Public Service is the latest in a string of targets set by states or utilities in the U.S. West to reach carbon-neutral status as climate change pushes the region away from traditional sources like coal. Domestic coal-fired power generation has declined 40% over the past decade, contributing to a steep decline in coal mining and several bankruptcies.
APS Chairman and CEO Jeff Guldner said the plan he is backing is much different than the defeated ballot measure known as Proposition 127 because that would have required utilities to get half their power from renewable sources by 2030. The new plan comes close to that but can be changed if needed.
“Flexibility is always the best thing to have when you’re dealing with future energy policy,” Guldner said in an interview. “The biggest concern we had with 127 is there was no flexibility. It would have been ingrained in the (state) Constitution.”
As part of the plan, the company will close a major New Mexico coal-fired power plant seven years early but keep relying on the nation’s largest nuclear power plant as it adds renewable power, battery storage and other sources.
The company operates and owns the majority of the massive Four Corners Generating Station outside Farmington, New Mexico. The plant uses coal from a mine in the Navajo Nation, and 80% of its 327 workers are Native American.
The company plans to continue to rely on the Palo Verde Nuclear Generating Station west of Phoenix to provide about 25% of its power past 2050. The three-reactor plant is the largest in the nation and will be more than 60 years old by then. It produces power with no carbon emissions.
By 2030, APS expects 65% of its power to be carbon-neutral, including 45% from renewable sources. The company spent $38 million in 2018 to fight a proposal requiring half its power to come from renewables by the same year.
In the U.S. West, major utilities in New Mexico and Colorado have announced similar plans. California plans to be carbon-neutral by 2045, while Nevada lawmakers have passed a law requiring 50% renewable power by 2030.
APS expects to continue using utility-scale solar power plants and greatly increase battery storage while seeing more growth in rooftop solar. Homeowners are still installing solar panels even after Arizona regulators cut the amount they can get for pumping excess power back into the grid. The company also expects natural gas to play a significant bridge role.
APS will stop using coal for power generation by 2031 when it plans to end operations at Four Corners. A major plant in northeastern Arizona that APS bought power from closed last year, and it plans to shutter the two units it owns at the Cholla Power Plant near the eastern Arizona community of Joseph City in 2025.
The Arizona utility, owned by a publicly-traded holding company known as Pinnacle West Capital Corp., serves 2.7 million people in 11 of 15 counties.
APS came under fire in recent years for spending millions to back favored candidates for the Arizona Corporation Commission, which sets customer rates and profits for public utilities that have been granted monopolies. The commission must approve the company’s plans.
Gulder, who took over as CEO in November, told regulators earlier this month that the company will not spend money on future commission elections.
The decision to move to carbon-free power by 2050 was partially driven by public support for ideas behind the ballot proposal, Guldner said. The measure was initially popular but lost by a wide margin after APS spent big to highlight its costs to consumers. APS also has been hearing from major customers and others about clean power.
The company aims to send a clear message to industries supplying utilities that it needs innovative ideas to boost carbon-neutral power.
“That 2050 piece is not just a symbolic commitment,” Guldner said. “It’s meant to be a signal that says this lets us focus on solving the gaps in the technology and the gaps we have today so that we can get there.”