To improve grid resiliency and our ability to prevent and respond effectively to weather-related outages, APS implemented a series of measures in 2018 that hardened the power grid. Each summer, Arizona’s monsoon brings heavy winds and rain that can significantly impact our operations. We perform predictive maintenance throughout the year, using infrared equipment to locate “hot spots” on the APS system. These hot spots can be indicators of wearing out infrastructure. Our crews then further inspect the equipment and replace components as needed. Crews also have used the cooler months to install more steel poles as “stopper poles.” This helps prevent longer stretches of poles coming down during high monsoon winds.

The electric distribution system is evolving, and we are working to remain at the forefront of innovation in our rapidly changing industry. We plan to invest approximately $300 million through 2025 in new grid technologies, system upgrades and related management systems through a number of project initiatives.

There are several key drivers behind our investments in a modernized distribution system. We pursue continual improvement in our safety, operational reliability, power quality and customer value. Integrating advanced distribution system technologies enables us to build a modern, flexible grid that enhances our operational capabilities and provides our customers with a new generation of tools and services. Modernizing the distribution grid yields greater efficiencies, including improved work management processes for our employees through the use of mobility solutions. Increased penetration from residential solar and battery storage systems requires us to develop new and better ways to manage power quality on our system. And the grid must evolve to support the emerging technologies and options that our customers increasingly demand.

The high level of DER penetration on our grid pushes us to innovate in order to optimize our grid resources to maintain reliability. For example, we are the first utility in the nation to leverage our Advanced Metering Infrastructure (AMI) network for two-way grid communications. Our fully deployed AMI network includes 1.25 million meters installed at customer homes and businesses, including more than 88,000 meters on residential rooftop solar systems.

The microgrid at Marine Corps Air Station Yuma can supply complete backup power to the base in case of a grid outage.

Microgrids are small-scale power facilities installed at customer locations that can provide backup power to the customer in the event of a grid outage and deliver peaking service and frequency response to APS that benefits additional customers.

We can share in the costs of developing microgrids with our customers, which results in cost-effective economic deployment of new grid resources. Its fast-acting capabilities also enhance grid resilience and flexibility by providing important peak resources and ancillary services such as frequency response, which can lessen the frequency and impact of power outages.

Through an innovative relationship with the U.S. Department of the Navy, we operate a low-emission, 25-MW microgrid at the Marine Corps Air Station (MCAS) Yuma. The system provides 125% of the backup power needed by the base in the event of a grid disruption, enhancing reliability and security at the base and allows the base to add more capabilities in the future.

We also own and operate a 13-MW microgrid at the Aligned Data Centers campus. The microgrid was deployed in 2016 within the heart of the Phoenix metro area. Like the MCAS Yuma microgrid, the cost-shared microgrid at Aligned provides peak generation and frequency response to the APS system, in addition to backup power for the data center in case of an outage.

Microgrids offer great potential for developing grid innovation. For example, we have two patents pending on the system developed in-house that employs microgrids for autonomous frequency response.

In our constant quest to improve reliability for our customers, we have gone from using push pins and paper maps to utilizing a state-of-the art outage management system with mobile device capability and advanced fault locating features in just 10 short years. Project Illuminate is a major initiative that will increase operator control and overall distribution system situational awareness to more effectively manage distributive energy and smart grid technology. Project Illuminate allows our customers to benefit from improved system reliability, increased outage information and enable the use of more customer-sided technology. Project Illuminate and our future projects are a big step toward integrating flexible and dynamic technology that will allow us to operate the grid of the future.

A well-designed and reliable grid sets the stage for Arizona to attract new businesses and provide for continued growth. In 2018, APS finalized construction and preparation to energize the final section of a 500-kilovolt line that completes an extra-high voltage transmission loop around the Valley to improve reliability for our customers. This final section of the line is known as Sun Valley to Morgan. It runs 38 miles between the Sun Valley substation, near Sun Valley Parkway north of Tonopah, and ends at the Morgan substation, just south of State Route 74 near Lake Pleasant Regional Park.

The completed loop provides economic development opportunities for the Valley by providing a direct flow of high-voltage transmission that connects California by way of Palo Verde Generating Station all the way to Four Corners Power Plant. This means APS can more easily transmit power from large, baseload generating stations and bring power in from California when that state experiences negative pricing, or pays other utilities such as APS to take excess power during periods of over-generation.

The Sun Valley to Morgan project is a culmination of planning and hard work, which included a multi-year public siting process that evaluated land availability and environmental, engineering, regulatory and cost impacts.

We worked closely with the Bureau of Land Management (BLM), which governs roughly nine miles of the land on which the line runs. After construction was approved in March 2017, APS and the BLM worked to reduce visual impacts, ensure protection of wildlife habitat and salvage vegetation.

Among the efforts, we installed green poles in some locations to blend in with the natural scenery, and crews worked cautiously to protect endangered birds and desert tortoises that often crossed their paths.

Our unmanned aircraft system (UAS) program continues to grow and provide benefits to our customers. UAS technology, commonly referred to as “drones,” allows field personnel and engineers to work safer, collect hard-to-reach imagery, and evolve engineering practice at lower costs than traditional methods. We have worked to ensure that our UAS program meets all Federal Aviation Administration requirements. UAS-mounted thermal imaging and high-resolution sensors are used to inspect overhead lines, photovoltaic panels, boiler and HRSG tubes, concrete containment domes and cooling towers at Palo Verde to track performance and determine overall health of systems. In addition to providing improved inspection data, UAS help us respond more quickly to issues affecting the grid, such as storm damage. They are also used to map overhead lines on the grid and holding ponds at our coal plants for engineers to determine best courses of action. In the future, they may be used to survey remote transmission and distribution lines using machine learning to detect anomalies, reducing the cost to perform annual inspections for proactive maintenance.

Progress continued in 2018 on our Ocotillo Power Plant modernization project. Two 1960s-era natural gas-fired, steam-generating units at the power plant in Tempe are being replaced with five new gas-fired turbines that use fuel and water much more efficiently than the old units and are equipped with state-of-the-art pollution control technology.

The new gas turbines will be in commercial service by this summer. They will be fully compliant with the EPA’s New Source Performance Standards for carbon emissions from new generating units. Nitrogen oxide and carbon monoxide emissions rates will be cut in half, while almost doubling the generation capacity at the site. In addition to the modernized plant’s environmental benefits, the new units’ quick-start capabilities provide the flexible generation required to integrate more renewable energy into our energy mix.