July 19, 2016 Read More →

Skepticism in Arizona Around Long-Term Commitment to Natural Gas

Ryan Randazzo for the Arizona Republic:

Officials on Monday questioned Arizona Public Service Co. regarding its plans to increase its use of natural-gas-fueled power plants to meet energy demands, saying they are concerned prices could increase and put utility customers at risk.

APS officials presented the company’s long-term resource plan to the regulators at the Arizona Corporation Commission. The plan broadly outlines how APS will meet energy demands in its utility territory for the next 15 years, and calls for substantial increases in the amount of power the state’s largest utility gets from natural-gas plants.

The company is paying about $2.50 per unit of natural gas. Natural-gas prices were about three times as high at times from 2005 to about 2007.

Some commissioners and the Southwest Energy Efficiency Project voiced concern Monday over the plan.

“To significantly increase the deployment of natural-gas-based generation, what we are doing is assigning significant risk if gas prices rise to levels we’ve seen in the past,” Commission Chairman Doug Little said. “If we bet our future on the price of natural gas, the customer pays the price.”

The company is paying about $2.50 per unit of natural gas. Natural-gas prices were about three times as high at times from 2005 to about 2007.

APS gets about 26 percent of its energy today from natural gas, and that is projected to increase to 36 percent by 2031, according to its resource plan.

In the same time, the amount of energy it gets from renewable sources like solar is expected to increase to 18 percent from 11 percent today.

The amount of energy demand met through efficiency measures also is expected to increase to 14 percent from 12 percent today.

The amount of power APS will get from coal will decrease with the planned closure of some coal units and possible conversion of some to natural gas. The amount of power from Palo Verde Nuclear Generating Station will not decrease, but the plant will represent a smaller portion of APS’ energy mix, 18 percent, compared with 26 percent today, because the overall supply is growing.

Jeff Schlegal, the Arizona representative of the Southwest Energy Efficiency Project, said the APS resource plan should include more options for customers to reduce their power demand, particularly their contribution to the summertime peak demand, though conservation.

Full article: APS’ plans to increase reliance on natural gas draw questions

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