Coolidge GS 0827

Salt River Project's Coolidge Generating Station.

Arizona's second-largest utility hopes to add more than 800 MW of capacity at a natural gas peaker plant located in the Phoenix metropolitan area's Southeast Valley to help ensure reliability in the rapidly growing region.

The Phoenix metro area is growing at a rate three times the national average, and Salt River Project anticipates a significant spike in near-term residential and commercial demand, the utility said in an Aug. 24 news release. Summer temperatures have also been creeping up due to climate change, with nine of the city's 10 warmest years since 1896 occurring since 2002, according to the National Weather Service.

Erica Sturwold, a spokesperson for SRP, in an email said the decision was motivated mainly by the need to meet growing energy demand. "SRP must add more generation that is directly available to our system when needed, especially as population and peak energy demand continue to rapidly rise in the Phoenix area," she said.

Sturwold also acknowledged that the resource-scarcity events that occurred in California and Texas within the last year "created a stronger sense of urgency" among Western utilities to add peaking resource capacity. "Utilities in the western region are facing capacity constraints and lacking ability to share power generation resources during peak energy usage periods," she said.

SRP, as a publicly owned nonprofit entity, is not under the jurisdiction of the Arizona Corporation Commission and is seeking approval from its own board of directors for the addition of 16 natural gas turbines that would add 820 MW of nameplate peaking capacity to the Coolidge Generating Station in the Southeast Valley.

SRP purchased Coolidge from TransCanada in 2019. The 615-MW-nameplate-capacity plant was built in 2008 and consists of 12 natural gas peaking units. It is designed to meet peak power demand within 10 minutes of firing. Half of the new units would be expected to enter operation in 2024, with the remaining eight coming on line in 2025, SRP said in an Aug. 24 presentation to its board.

As part of the expansion, SRP is also seeking approval for a new 500-kV switchyard at the site. The utility plans to make use of existing 500-kV and 230-kV transmission assets as well as two natural gas pipelines at Coolidge, and said in the presentation that there is sufficient water supply for the expansion. Total costs for the expansion are estimated at $830 million, according to the presentation.

Sturwold said SRP plans and builds power generation resources, including the proposed peaking units at Coolidge, to meet its customer demand. The utility could sell excess energy from the peaking units into different markets, including the Western Energy Imbalance Market, if the output is not needed to serve its customers, she said.

"Expanding our Coolidge Generating Station is a critical step in creating a reliability backbone for SRP customers," SRP General Manager and CEO Mike Hummel said in the release. "The added, rapid-start capacity at Coolidge will keep the lights on during times of peak electricity demand in the Valley and help support the variable output from SRP's growing portfolio of renewable resources," he said.

Additional natural gas turbines will provide reliability to SRP customers when renewable resources are not producing and battery systems are charging, the release says.

SRP's sustainability goals of reducing carbon emissions 65 percent by 2035 and 90 percent by 2050 compared with 2005 levels will not be affected by the new units, the release says. SRP in May committed to add 2,025 MW of solar capacity by 2025 and plans to add 1,600 MWh of battery storage capacity by 2023, the release says (see CEM No. 1640).

"Expanding Coolidge Generating Station will provide a proven, quick-start generation resource while SRP obtains operational experience and evaluates the longer-term performance of battery storage technology," Hummel said, adding that SRP plans to build and invest in more battery storage as reliability and costs improve.

Sandy Bahr, executive director of the Sierra Club's Grand Canyon Chapter, in an emailed statement called the plan "absolutely irresponsible" and referenced a recent report from the Intergovernmental Panel on Climate Change, which highlights an immediate need to reduce methane emissions as part of the effort to limit global warming.

Arizona communities this summer have seen significant impacts of climate change, including larger wildfires, extreme drought and heat, Bahr said. Adding so much new natural gas capacity "is inconsistent with sustainability, no matter how you look at it," she said.

The Sierra Club chapter on Aug. 24 hosted an online panel featuring Mayor Corey Woods of Tempe and Mayor John Giles of Mesa, Southeast Valley cities served by SRP that have their own climate action plans. Both mayors emphasized boosting public-transit and transportation-electrification efforts in their communities, initiatives that will intensify demand on SRP resources.

Woods said Tempe is considering efficiency and sustainability in its affordable housing initiatives, and that utility bills are another component of housing affordability. He said the Biden administration's infrastructure package, if passed, has the potential to significantly expand clean-energy jobs in the region, and that transitioning toward a clean economy is not just an issue of the environment but also an issue of justice.

"These temperatures, if they continue to rise in the way that they currently are, are going to make it nearly impossible to be outside in the summertime in Arizona," Woods said, adding that continued heat increases will contribute to a "huge" financial burden for the state's most vulnerable populations.

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Associate Editor - California Energy Markets

Abigail Sawyer grew up in northwestern New Mexico near two massive coal-fired power plants. She spent many hours gazing out the car window at transmission lines on family road trips across the Southwest and now reports on the region from San Francisco.