APS will eliminate carbon emissions by 2050 and close coal plant ahead of schedule, CEO says
Arizona Public Service Co. will produce all of its electricity from carbon-free sources by 2050 and will get 45% of its power from renewable sources like solar and wind by the end of this decade, the company announced Wednesday.
Meeting those goals will mean closing the company’s coal-fired Four Corners Power Plant in New Mexico by 2031, seven years ahead of schedule. The APS coal-fired Cholla Power Plant in Arizona already is scheduled to close in 2025.
APS gets about 22% of its energy from those coal plants today.
The announcement drew praise in Arizona and beyond from environmental groups and climate-change activists, many of whom have criticized the company's energy policies in the past.
Jeff Guldner, the new CEO of Arizona’s biggest utility, said the plan is ambitious and will require technology not currently available. But by setting the goal, the company will move in the right direction, he said.
“Nobody today actually knows how you get to 100% carbon free,” Guldner said. “I take some comfort from the fact that there are others who also believe we can get here to 100% by 2050 even if we don’t know what the answers are.”
In addition to the energy it gets from coal today, APS gets just over one-fourth of its power from natural gas, meaning it will have to replace nearly half its energy supply by the midpoint of this century to meet the new goal.
The distinction between renewable energy and clean energy is important: Renewable refers to things like solar, wind, geothermal and other technologies that can’t be depleted, like coal in the ground.
Clean energy refers to power sources that don’t generate the carbon emissions that contribute to climate change. Renewables are counted as "clean," but so is nuclear energy, which doesn’t emit carbon but is not necessarily renewable because the uranium fuel is mined.
“I focus on the clean, because that focuses the importance on the decarbonization effort,” Guldner said.
APS also runs the largest nuclear plant in the country, the Palo Verde Nuclear Generating Station, which is about 50 miles west of downtown Phoenix. It gets about 25% of its energy from the plant, which is co-owned by several utilities from California to Texas.
“Palo Verde is the core of this whole clean plan,” Guldner said, adding that he sees no way to go 100% carbon free without nuclear energy.
Utilities nationwide set carbon goals
Utilities around the country are formulating clean and renewable energy goals to address the growing calls for action to mitigate global climate change.
The Energy and Policy Institute, an environmental group that pushes for renewable energy and opposes fossil fuels, criticized APS and its parent company, Pinnacle West Capital Corp., last year for being among the largest utilities in the nation without a carbon-reduction plan.
The Energy and Policy Institute also reported that many of the utilities with such plans were slowing their transition to renewable energy in the next decade, according to public proposals they have made.
Guldner said the new plan more closely aligns APS with utilities in neighboring states like Colorado and New Mexico, even if it is less ambitious than California’s more aggressive clean-energy plans.
In 2018, Minneapolis-based Xcel Energy became the first major U.S. utility to announce it would be 100% carbon free by 2050. It has customers in eight states, and plans to reduce carbon 80% by 2030. The governor in Colorado, where Xcel operates, wants to have 100% renewable energy by 2040.
New Mexico’s Energy Transition Act requires utilities to be carbon free by 2045, but that state’s major utility, Public Service New Mexico, plans to meet that goal five years early, it announced last year.
California enacted a law in 2018 that requires 60% of power to come from renewables by 2030 and for 100% carbon free energy by 2045.
Goals to prevent major repercussions
The International Panel on Climate Change advises that a 45% reduction in carbon emissions is needed by 2030 and that by about 2050, carbon emissions will need to be "net zero" to prevent major climate repercussions.
“Arizona is a small part in the overall climate-change discussions,” Guldner said. “We definitely want to do our part in terms of helping to meet whatever ultimately happens with the global agreements on carbon reductions, but to me it’s more important we have a realistic runway that says we can actually solve these problems so we can make a 2050 date.”
Closing the coal plants will require APS to help the communities deal with the loss of jobs, he said.
“We do not take that transition lightly,” he said. “And we are committed to working with our employees and stakeholders on the economic and other effects of retiring those assets.”
Sierra Club criticizes APS' past efforts
The clean-energy goal from APS comes as the company continues to face criticism from environmentalists for not using enough renewables.
On Tuesday, the Grand Canyon Chapter of the Sierra Club delivered a welcome basket to Guldner, who became CEO in November.
Included in the gift were cookies that said “Go Solar” written in frosting, a “Beyond Coal” T-shirt, a calculator to help APS tabulate rates, clear Scotch tape to encourage transparency, and detox tea, which chapter director Sandy Bahr said Guldner might need to cleanse the previous CEO’s policies.
“We are asking them to be a more responsible, more transparent and to move rapidly to clean renewable energy,” said Bahr, who did not know of the pending clean-energy plan from APS at the time.
“We have seen APS drag its feet and not only drag its feet but actively oppose clean-energy measures as they did with Prop. 127. We want to see them move in a different direction.”
Pinnacle West, the APS parent company, spent $37.9 million — a record amount — in 2018 to defeat Proposition 127, a state ballot measure which would have required electric companies to get half their electricity supply from renewable sources like solar and wind by 2030.
The ballot measure was supported by billionaire activist Tom Steyer and his environmental group, NextGen America, which spent more than $23 million trying to pass the measure. Steyer is now running for the Democratic nomination for President.
The opposition to that ballot measure from APS and Pinnacle West didn’t sit well with Arizona environmentalists, even though it was handily defeated at the polls.
Guldner said APS opposed the proposition because it would have amended the Arizona Constitution, meaning it would not be flexible should technology and costs change in the coming decades. He also said it was written in a way that didn’t address carbon emissions but instead focused on promoting renewables.
Bahr, again speaking without knowledge of the pending APS announcement, said APS should speed the retirement of its New Mexico coal plant, which the plan does.
“They need to be out of coal during this decade,” she said. “They need to look at retiring the Four Corners Power Plant much earlier.”
Bahr also said APS should remove barriers for customers who want to install rooftop solar.
“We would like to see a strong commitment to renewable energy,” Bahr said.
Guldner, speaking after Bahr dropped off the gift basket for him, said that although APS won approval to reduce what it pays customers for their energy from rooftop solar panels, the company still sees thousands of its customers installing solar.
The company has 104,000 customers with rooftop solar and those customers can generate 834 megawatts of power when the sun is shining, which is more power than a single coal generator.
After the APS announcement, Bahr called the move "encouraging," but added the company has "more to do."
In particular, she said she would like to see APS spend more money on energy-efficiency projects that reduce demand for power from customers. And she said it will be important for regulators to codify APS' commitments with state energy standards.
"Standards are important," she said. "CEOs come and go."
Other groups were more generous in their praise.
“APS’ commitment to 100% carbon-free electricity is great news for Arizonans, who overwhelmingly support clean energy,” said Art Terrazas, a director for the nonprofit clean-energy advocacy Vote Solar.
“But corporate commitments must also be enforced, and may not benefit everyone equitably. Now, the Arizona Corporation Commission must adopt a statewide, 100% carbon-free standard that ensures all Arizonans can benefit from clean energy."
Ceres, a Boston-based nonprofit that advocates for corporate sustainability, also praised the move.
“Today’s announcement demonstrates that APS is very focused on some of the most critical priorities of our time: tackling climate change and accelerating the transition to clean energy,” said Dan Bakal, senior director of electric power at Ceres.
How will APS get to zero carbon?
APS will achieve the new goals largely through increasing use of solar, including large-scale power plants with batteries.
Guldner said advancing energy storage will be key. That includes storing power on the grid with technologies like lithium-ion batteries and storing energy from season to season. Renewable energy from solar and wind is ample in spring, but power demand from customers is highest in summer.
He said the company will work with the state's public universities to solve problems on the path to 100% clean energy, and that Arizona State University will be a key collaborator.
“ASU is excited to see Arizona’s largest electricity provider reimagine our state’s energy sector with this bold commitment to clean power generation,” ASU President Michael Crow said in a prepared statement as part of the announcement.
“We are excited to be among the early collaborators in APS’ carbon-free future so imperative to our long-term quality of life.”
Guldner also said APS will focus on low costs for consumers as it transitions.
“If you don’t do this affordably, this is very difficult to achieve,” Guldner said.
APS has two initiatives that could help reduce consumer costs, he said. One is increased economic expansion in the company’s territory, including attracting new data centers. These large energy customers generate revenue for utilities and help spread costs among all customers.
Another is driving increased electrification of transportation, as more electric vehicles will similarly drive more revenue for the company to pursue clean-energy initiatives. They also will have the added benefit of reducing air pollution in metro Phoenix, he said.
Keeping Palo Verde running also is important, Guldner said.
APS is researching how to ensure the nuclear plant remains economical even as the increase in renewable energy on the grid begins to displace the need for its electricity.
One of those strategies could be to produce hydrogen when the nuclear plant is running at full capacity but electricity demand is low. That hydrogen fuel could then be stored and used later to generate electricity in natural-gas burning plants.
APS will submit a new resource plan to state regulators this spring, and they already are considering proposals to boost the state’s renewable-energy standard, which requires electric companies to get only 15% of their power from renewable sources like solar and wind by 2025.
A separate state standard requires them to reduce electricity demand 22% by this year.
APS gets 12% of its energy from renewables today and 14% from efficiency projects that aim to reduce power demand.
“Let’s get our proposal out and have a constructive dialogue and compare plans,” Guldner said.