The Arizona Corporation Commission has approved a plan for Arizona Public Service to spend up to $500 million to develop 100 megawatts of photovoltaic electric plants during the next four years.
The new projects, called the Arizona Sun Program, would produce enough electricity to supply electricity to 25,000 homes. When added to APS's current and planned renewable energy sources, about 5 percent APS's total electricity demands would come from renewable sources, said Eran Mahrer, director of renewable energy for APS.
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Developers will be selected to build the photovoltaic plants, which APS will own. The plants will be selected through competitive procurement processes, the Phoenix-based utility said.
APS is under a mandate from the corporation commission to obtain 15 percent of its energy needs from renewable sources by 2025.
"To meet the growing energy needs of customers, we continue to seek the most effective ways to add renewable energy to our energy supply portfolio," said APS President Don Robinson in a written statement.
On Jan. 27 the company issued a request for proposals for new sources of solar energy that could fulfill the initial phase of the Arizona Sun Program, the utility said. Proposals are due April 7.
Separately, APS is pursuing proposals for additional wind power generation, which could also be used to meet the 15 percent goal.
The new solar program is in addition to the stalled Solana Generating Station, a massive 280-megawatt solar thermal plant planned near Gila Bend. It uses a trough technology different from photovoltaics, which generate electric current merely by being exposed to sunlight. Solana is to be built by Abengoa Solar, and APS will receive the power it produces under a long-term contract. But the $12 billion Solana plant, announced with much fanfare in early 2008, has been unable to obtain financing.
Mahrer believes the Arizona Sun projects will be easier to finance because APS will own the facilities.
"Our ability to bring capital to the table should make a difference," he said.
Mahrer said he also is optimistic Abengoa will be able to secure financing, perhaps within a month, with the help of loan guarantees by the U.S. Department of Energy.
The cost of the Arizona Sun projects will be recovered through a renewable energy surcharge on customers' monthly bills.
The commission also approved another element of APS's renewable plan this week to increase financial incentives for higher energy-efficiency standards in new homes built in the APS service territory.
The goal is to eventually build net-zero energy houses - homes that produce as much energy as they use, the commission said. The goal could be achieved through higher-efficiency air conditioning, water heaters, lighting and appliances; and clean on-site power systems such as rooftop solar panels.
"The solar energy projects approved (this week) will provide Arizonans with cleaner energy, more stable rates and hundreds of new jobs," said commission Chairwoman Kris Mayes.