We believe it is important to disclose our carbon management strategies and greenhouse gas (GHG) emissions to customers, investors and other stakeholders. APS voluntarily reports annually to the CDP (formerly the Carbon Disclosure Project), a global nonprofit organization that collects and analyzes environmental data for investors to use in financial decisions. This organization’s network of investors represents more than $100 trillion in assets. CDP reporting provides a benchmark to evaluate how well we manage our carbon emissions and climate change risk, and to identify opportunities for improvement.

We have participated in CDP since 2006. In 2017, we were one of only two U.S utilities awarded Leadership ratings from CDP for both climate change and water management, due to our governance, strategy and risk-management actions. In 2017, our Scope 1, 2, and some of scope 3 GHG were third-party verified.

In addition, we submit a comprehensive annual report of our GHG emissions to the EPA as required by federal law.

CDP Documents

For APS, short-term (annual) carbon emissions from generation sources are predominantly a function of energy demand due to weather and variations in our generation resources caused by fluctuating fuel prices. In 2016 reductions in natural gas prices allowed us to shift a large portion of our energy generation from coal to gas, which resulted in more than a 26-percent reduction in carbon emission in just one year. In 2017, increasing natural gas prices, coupled with the hottest summer on record and an all-time peak demand recorded in June, caused carbon emissions to increase by about 8 percent. However, our total carbon emissions remain 35 percent lower than our 2005 baseline year.

Air Emissions Trend Tables

To measure our overall carbon reduction—not just decreasing emissions from generation but also in our own operations—we use a carbon-avoidance metric. This reflects actions taken throughout the company, including retiring coal units, installing renewable generation and energy efficiency, increasing our building and operating efficiencies, and pursuing fleet electrification.

In 2017, we avoided 5.1 million metric tons of carbon, exceeding our carbon-avoidance goal of 4.9 million metric tons for the year. Since 2015, APS has avoided 13.6 million metric tons of carbon dioxide emissions that would have been emitted – equivalent of removing almost 3 million automobiles from the road. The primary reasons for surpassing our carbon avoidance goal were an increase in renewable energy and ongoing energy efficiency measures.

As Arizona’s population grows, APS plans to provide the increased energy required to support this growth as efficiently as possible relative to carbon emissions. We set long-term carbon emission goals based on our carbon intensity, as measured by the pounds of carbon emission per megawatt-hour of energy. By 2032, we expect our carbon-emission rate to decrease to less than 600 lb/MWh.

The APS transportation fleet continues its conversion to more fuel-efficient vehicles. Through this ongoing conversion and by using our fleet more efficiently, we are working to reduce both carbon emissions and operating costs. We continue to transition our entire fleet of sedans to plug-in hybrid electric vehicles (PHEVs). For each conversion to hybrid electric, we estimate saving more than 24 tons of carbon emissions over 10 years. In addition, we are closely monitoring the market as manufacturers develop PHEV pickups and commercial trucks.

The transition to hybrid technology in our fleet is driven by a favorable return on investment. Not only do we gain the benefits of hybrid technology, but our investment in hybrid vehicles does not exceed the cost of purchasing comparable petroleum-burning vehicles.

New idle-mitigation technology is now standard on all troubleman trucks, allowing workers to run laptops and air conditioning without keeping the vehicle running. In addition to reducing our carbon footprint, this decreases noise when working in residential neighborhoods. Our Odyne bucket trucks use less fuel and have quieter operations than traditional diesel or gasoline engine trucks by using battery assisted drivetrain and ePto technology while operating the bucket. If idle-mitigation technology proves effective, we will consider adapting it for larger trucks in our fleet.

Our commitment to reduce our environmental footprint through sustainable practices is evident throughout APS facilities. Our corporate headquarters in Phoenix has earned five ENERGY STAR labels for energy efficiency from the EPA. Over the past 11 years, we have improved energy efficiency at this facility by approximately 20 percent. Overall, APS facilities have received 10 ENERGY STAR labels.

Sustainability strategies are embedded within our standard architectural and engineering specifications when managing changes to our buildings or constructing new space. We work to improve energy efficiency throughout our facilities by replacing obsolete building systems and equipment with more energy-efficient systems and equipment.

Our focus on green building principles were highlighted as part of a major construction project completed in 2017. Our new service center in Prescott (pictured above) incorporates a wide range of sustainable design principles, materials and systems. Green features of the facility, which was built to Leadership in Energy and Environmental Design (LEED) standards, include utilization of LED lighting and harvesting of natural light throughout the facility, higher efficiency mechanical systems, increased outside air volume for building occupants, increased building insulation, low-flow and low-flush water fixtures, and low-VOC paint and flooring materials.

Going forward, proactive assessments of the health and use of our buildings, utilization of the most current technologies as we renovate, re-using materials where possible and further replacing ozone-depleting technologies will be the basis for our decision-making. We will continue to design, construct, operate and maintain our new and remodeled facilities to ENERGY STAR standards and LEED principles.

APS recognizes that electric utilities face a unique challenge when it comes to reducing their GHG emissions. For more than a century the majority of electrical energy has been generated with carbon-based fuels. Transitioning to a decarbonized generation resource mix is a long and expensive undertaking. However, APS has been moving toward a lower carbon position for many years. For example, from 2006 through 2016 we added over one gigawatt of solar nameplate capacity to our system, becoming the only electric utility outside of California to achieve this milestone. And by the end of 2017 our system had over 1,600 megawatts of renewables of which approximately 1,300 megawatts came from solar resources.

We also have proactively increased our system resiliency, implemented forest management programs to mitigate the risk of wildfires, and developed rapid-response plans to promptly restore power after storms.

A changing climate also makes it more challenging to provide reliable and affordable energy to Arizona customers. Therefore, APS participates in various research and policy organizations, such as the Electric Power Research Institute, Edison Electric Institute, Center for Climate and Energy Solutions and the Center for a New Energy Economy. This participation helps us understand varied perspectives on climate change and the value of effective and actionable carbon-reduction strategies.

APS is currently assessing the possibility of establishing a science-based target that supports the 2°C climate change scenario.

We have permanently retired four coal-fired units since 2013—one unit at our Cholla Power Plant (in 2015) and three units at our Four Corners Power Plant (in 2013). Plans call for the end of all coal-burning generation by our other Cholla units by 2025.

This focused coal reduction plan is expected to decrease the share of coal-fired energy in our generation mix from its current level of 21 percent to about 15 percent by 2020. With the closure of four coal-fired units, we have retired a cumulative 820 megawatts (MW) of coal-fired generation since 2013, which resulted in a regional reduction of carbon emissions of approximately 29 percent. Ending our participation in the Navajo Generating Station will retire an additional 315 MW of coal-fired generation, increasing our total to 1,135 MW retired.

In 2017, overall carbon emissions from our fossil-generation fleet totaled 10.7 million metric tons. The carbon intensity of our fossil-generation fleet slightly increased to 949 lb/MWh in 2017. This was primarily due to increasing natural gas prices in 2017 relative to 2016, which slightly shifted more generation to the coal plants to meet the demands of the hottest summer on record and an all-time peak demand recorded in June.

APS reduces its environmental impact by closing older, less-efficient coal units and upgrading environmental controls on newer units. Selective catalytic reduction (SCR) technology currently is employed at four of our power plants, and SCRs are being installed at two additional facilities. The installation of SCRs at the Four Corners Power Plant in 2018 will result in a 90-percent reduction of nitrogen oxide (NOx) at that facility. The closures of four coal-fired units also resulted in collateral emission reductions that included nitrogen oxide emissions (reduced by 36 percent), particulate emissions (43 percent), sulfur dioxide emissions (29 percent) and mercury emissions (63 percent).

APS maintains a robust and comprehensive air quality program to ensure compliance with all federal, state and local requirements. In addition to its ongoing compliance obligations, APS is focused on regulatory issues associated with ozone. In 2016, Maricopa County adopted new rules that set lower standards for emissions of ozone precursors. APS participated in the rulemaking process and is taking the proper steps to ensure compliance with these new rules. Additionally, we continually monitor our air emissions for compliance and trending purposes.