Tuscon Electric Power Makes Dramatic Pivot Toward Renewable Energy

July 20th, 2020 by  

Remember just 2 years ago when the utility companies that supply electricity to customers in Arizona went into a tizzy over a ballot initiative that would mandate them to get 50% of their electricity from renewable sources by the year 2030? Oh, the weeping and wailing and gnashing of teeth could be heard from sea to shining sea. It was a direct frontal assault on the American way of life. It was so dire, the utilities ponied up $40 million of their own money (actually it was their customers’ money) to defeat it.

Image credit: Tucson Electric Power

The curtain falls and time passes. Now just two years later, Tucson Electric Power, one of the utilities that screamed the loudest about the ballot initiative, has had a change of heart and wants to ditch its dependence on coal and transition to 70% renewable energy by 2035, according to Tucson.com. Is it the same goal as that ballot initiative? No, but it is pretty darn close.

The falling cost of solar and wind energy is a big part of the shift in Tucson Electric Power’s (TEP) focus, along with prices for battery storage that are also dropping rapidly. “For the last several decades, coal was the most economical resource. It was the lowest cost resource to supply energy for our customers, and it wasn’t really close. Coal just isn’t the most economical resource now, says Jeff Yockey, TEP’s resource planning director.

Praise For The New Plan

The new plan has won praise from many quarters, but Sandy Bahr of the Sierra Club says it doesn’t move fast enough to eliminate coal from TEP’s energy mix. She lists 14 units of coal-fired plants in the West that are scheduled to shut down sooner than 2032, many before the end of the decade. “The more quickly they retire these coal plants, the fewer the emissions,” Bahr says.

TEP says it analyzed that proposal and concluded it would require $300 million in investments but would reduce the utility’s cumulative emissions by only 2.4 million tons. By contrast, the Tucson Electric Power plan will avoid 70.2 million tons of carbon dioxide by 2035, Yockey says, adding the energy portfolio suggested by the Sierra Club was the most expensive of all the scenarios investigated.

“The difference is in the timing. We still have a fair amount of value in our coal plants, which we need to depreciate, which we do over time,” Yockey says. “Trying to replace the capacity that coal provides in the near term with storage and solar is very expensive, although those costs are declining.”

TEP says its plan strikes the best balance between costs and environmental benefits compared to 24 other proposals it reviewed. “We know our customers want safe, reliable energy from resources that are both affordable and environmentally responsible. TEP’s 2020 Integrated Resource Plan will help us maintain that delicate balance,” Tucson Electric Power CEO David Hutchens wrote in the forward to the new plan.

“Being a utility with no nuclear or hydro(electric) energy, with coal, there is reliability, a fuel on the ground, 30 or 90 days supply,” he said. “It’s the only source not subject to disruption in the next hour. It’s our only long-term, stable fuel supply. Over time, we will be able to overcome that.” The goal “was very much about basically achieving significant emissions reductions as quickly as we can and as cost effectively as we can,” he said.

Wind & Solar

Tucson Electric Power has already committed to getting electricity from two solar power plants in New Mexico and a wind farm in the Tucson area. The new plan calls for adding another 2,000 megawatts of renewable energy capacity by 2035. The company says the implementation of the plan will reduce its carbon dioxide emissions 80% compared to 2005 levels by the year 2035.

Arizona utilities are required to submit a new resource plan every three years. This latest effort was two years in the making and included input from the University of Arizona, environmental groups, businesses, and government representatives. The plan it will replace called for boosting renewable use to 30% by 2030 and to cut coal to 38% of its electric load by that year from 69% in 2017.

The goal in creating the new plan “was very much about basically achieving significant emissions reductions as quickly as we can and as cost effectively as we can,” Yockey says, adding that his company wanted the biggest cumulative emission cut possible over the next 15 years while maintaining reliable service for its customers. “If it was just about cost, we wouldn’t have selected the portfolio that we selected. It wasn’t the lowest cost portfolio.”

Social Justice

One concern among low income residents of Arizona is that the plan calls for an annual rate increase of 1%, something that could be a hardship for people on fixed incomes. Social justice advocates want the utility to site more renewable energy projects in the Springerville area to create economic opportunities for residents who will lose their employment when the two coal-fired generating stations are closed down. Today, they are the single largest source of electricity for Tucson Electric Power.

In 2018, the latest year for which data is available, the EPA says the Springerville thermal generating plant was the second largest emitter of carbon dioxide pollution in Arizona, second only to the now closed Navajo Generating Station. 


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About the Author

Steve writes about the interface between technology and sustainability from his homes in Florida and Connecticut or anywhere else the Singularity may lead him. You can follow him on Twitter but not on any social media platforms run by evil overlords like Facebook.

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