Dive Brief:
- Arizona Public Service (APS) and the Residential Utility Consumer Office (RUCO), Arizona’s ratepayer advocate, have agreed to a deal that would require APS to evaluate alternative procurement—including storage, efficiency, renewables and demand response—in place of new or retrofitted conventional power plants. The deal must now be approved by the Arizona Corporation Commission (ACC).
- The deal also requires APS to procure storage for at least 10% of the capacity of new natural gas peaking plants proposed for service before 2021 if the storage can be obtained at a competitive price. APS must also seek bids deemed cost effective for ratepayers by an independent monitor for storage projects worth 10 megawatt-hours by the end of 2018.
- Because APS could need around 4,000 megawatts of new generation through 2020, this agreement represents an opportunity for renewable energy developers and providers of storage and demand response technologies.
Dive Insight:
The new alternative procurement agreement came out of RUCO's intervention in an APS regulatory filing. RUCO suggested that, instead of retrofitting of its Ocotillo natural gas peaker plant with ten 502-megawatt turbines, APS could consider technologies other than natural gas.
The groundbreaking agreement follows an unprecedented proposal by APS earlier this year to develop and own 20 megawatts of rate based solar on its customers’ roofs.
The ACC is expected to review both proposals in October.
A trend-setting proposal by APS in 2013 to erode the state’s net metering policy met limited success when the ACC lowered the utility’s proposed $8.00 per kilowatt bill charge for solar owners to a $0.70 per kilowatt charge.
