Tucson Electric Power (TEP) plans to meet customers’ energy needs over
the next 15 years by reducing its coal generation capacity by about
one-third; acquiring new cost-effective natural gas-fired resources; and
continuing its expansion of renewable power and energy-efficiency
programs.
TEP’s plans are outlined in the 2014 Integrated Resource Plan (IRP) the
company filed with the Arizona Corporation Commission (ACC) on April 1.
The IRP describes how TEP plans to meet energy demand requirements
through 2028, providing safe, reliable and reasonably priced service to
customers while satisfying regulatory requirements and improving the
environment.
“Being prepared to meet tomorrow’s energy needs requires planning
today,” said David G. Hutchens, President and Chief Operating Officer of
TEP and its parent company, UNS Energy (NYSE: UNS). “Resource planning
is an ongoing balancing process that involves minimizing costs to our
customers, enhancing our sustainability and satisfying regulatory
requirements, all while effectively using our current infrastructure and
preparing for future system improvements to continue serving our
customers with high reliability.”
According to current projections, the company expects to add more than
50,000 customers over the next 10 years. Peak demand is projected to
grow annually by about 1 to 1.5 percent.
The IRP highlights TEP’s plan to serve these growing energy demands
through a long-term portfolio diversification strategy that will reduce
the company’s reliance on coal-fired generation. The company plans to
reduce its overall coal capacity by 492 megawatts (MW), or about 32
percent, over the next five years.
TEP plans to reduce its use of Unit 1 at the coal-fired Springerville
Generating Station by 50 percent, or 197 MW, by purchasing only half of
the unit after its current lease expires in 2015. Over the past year,
the company also worked with the Environmental Protection Agency (EPA)
to craft an alternative, cost-effective proposal that allows for the
elimination of coal as a fuel source for Unit 4 at the H. Wilson Sundt
Generating Station in Tucson instead of investing in more costly
emission controls. TEP also supports a plan under consideration by EPA
to retire two units at the coal-fired San Juan Generating Station in New
Mexico. TEP currently receives 170 MW from one of the units that would
be closed.
To replace some of the lost capacity from these existing coal-fired
resources, TEP and sister company UniSource Energy Services are planning
a joint purchase of a 550-MW combined-cycle unit at the natural
gas-fired Gila River Power Station in Gila Bend, Arizona. TEP would
control 413 MW of the unit’s output. TEP expects the Gila River purchase
to be completed in December 2014. The purchase of this favorably priced
resource will allow both companies to take advantage of currently low
natural gas prices. TEP will continue to evaluate other resource
alternatives such as long-term purchased power agreements and low-cost
plant acquisitions.
TEP plans to further diversify its portfolio through continued
investments in renewable energy and energy efficiency programs. By 2028,
TEP anticipates that its combined solar, wind, and biogas resource
capacity will increase from 157 MW today to 788 MW – enough energy to
power approximately 136,000 homes. TEP also plans to reduce its need for
new generating resources through a range of cost-effective,
industry-proven energy-efficiency programs that will result in a
cumulative capacity reduction of 312 MW, which is equivalent to the
annual electric energy use of approximately 167,000 homes.
By 2028, TEP projects that its resource portfolio will consist of 43
percent coal-fired generation and 36 percent natural gas-fired
resources. The remaining 21 percent will be made up of renewable energy
and energy efficiency resources.
TEP hosted a workshop at its headquarters to share information and seek
stakeholder input on resource planning alternatives. About 75 people
attended the workshop and provided feedback to TEP’s resource planning
team. The ACC will evaluate the TEP IRP in the months to come. For more
information about TEP’s 2014 Integrated Resource Plan, visit
tep.com/projects/planning/.
TEP provides safe, reliable electric service to approximately 413,000
customers in Southern Arizona. To learn more, visit tep.com. For more
information about TEP’s parent company, UNS Energy, visit uns.com.
Copyright Business Wire 2014