Electricity Conversion, Distribution and Sales


Generation
In 2003, our Pinnacle West Energy affiliate completed 1,593 megawatts of new, clean-burning natural gas-fired generating capacity to help address population growth in Arizona. Our goal is to offer a diverse fuel mix of nuclear, coal and natural gas generation to better serve our customers reliably and flexibly.
 
In 2003, we realized a year-end baseload capacity factor of 81 percent, which is better than the industry average. The Palo Verde Nuclear Generating Station led the U.S. in production for the 12th consecutive year by generating 28,586,227 MW of electricity at an 87.4-percent capacity factor, which included an extended maintenance and refueling outage to replace steam generators in Unit 2.
 
The company's fossil plants also recorded outstanding service records in 2003. The gas plants at Ocotillo, Saguaro, West Phoenix, Yucca and Douglas for the second consecutive year combined for an availability of about 90 percent. Again, this is above the industry average. All five Four Corners units achieved a capacity factor of 84.5 percent, placing the site in the top quartile of coal plants in the nation.

Of particular importance was the siting and approval of a 500-kV transmission line in the southwest Phoenix area. The line, activated in 2003, brings essential transmission capacity to the growing region and, in particular, opens key areas to economic development.

Distribution 
Our distribution network takes power from high-voltage transmission lines and delivers it to our customers. During 2002, we added 131 miles of overhead distribution and 518 miles of underground distribution. With the added distribution, we maintained 24,371 miles of above-ground local distribution and 12,352 circuit miles of below-ground distribution. 

Side Management Programs and Energy Conservation
At APS, we routinely offer assistance to our customers to help use energy wisely. Here are some components of APS’ Demand Side Management programs:

Performance Built Homes — To help builders promote the value of energy efficiency, APS works with building materials vendors to provide buyers with a heating and cooling guarantee. Builders who meet program specifications are able to offer their homebuyers a two-year guarantee that the monthly costs to heat and cool their homes will be less than a specified amount. The participating insulation product vendor provides the guarantee. In addition, APS’ support for the guarantee concept has been instrumental in influencing construction practices throughout the Phoenix metro area. 

Online Energy Audit — APS provides online energy analysis software on aps.com. The feature allows current and prospective customers to analyze home and business energy use and identify energy efficient measures.

Bill Analysis — A recent innovation to aid customers in analyzing their energy use is the “bill download” feature on aps.com. Registered aps.com users can download their bill history online and compare current usage to past usage.

Energy Cost Brochures — APS provides energy information to homebuilders and customers. Most new-home subdivisions are provided with a brochure that shows the APS estimate of the energy cost for each model. In addition, the APS salespeople are provided with charts showing the impact on energy use of various building components. These have been effective in convincing builders to switch to more energy-efficient components. The software is also used to provide builders and homeowners with estimates of costs used in resolving complaints such as when insulation is left out of an attic. It is used to provide builders with energy cost estimates needed to qualify for some building grants, and helps them to see the energy impact on component choices.

Northwind Cooling
The Northwind Phoenix District Cooling System serves 10 businesses in downtown Phoenix, with two additional business customers beginning service in 2004. Conceived in 2000 and completed in 2001, the plant provides 20,000 tons of cooling from two 2,500-ton screw chillers and 36,000-ton-hours of ice storage that integrates 8,000-ton chillers at Bank One Ballpark. The system uses an industrial grade, ice-based chiller that manufactures three million pounds of ice each night when utility loads and rates are lowest. During peak periods, the ice is melted and 34-degree water is distributed through an extensive network of underground pipes to provide state-of-the-art cooling to buildings throughout the area.

The underground piping portion of the project consists of a network of pipe buried below downtown Phoenix. This network of pipes is approximately 14,000 linear feet and has pipe diameters ranging from 30 inches to 18 inches. Northwind is licensed to serve buildings encompassing approximately 140 square blocks in downtown Phoenix.

Benefits:

• customers experience faster cool down of buildings due to lower water temperatures
• increased reliability with Northwind engineers continuously monitoring individual building performance around the clock
• district cooling service allows each customer to focus on its core business without the distraction of maintenance programs and unpredictable repair costs
  

Northwind has a co-generation facility in Tucson (Tucson District Energy) that includes a 1.6 MW natural gas-fired generator with heat recovery and 500 tons of absorption chilling to supplement three 1,250-ton centrifugal chillers. This system supplies 2,000 tons of cooling and 21 mm/BTU/hr of heating on a continuous basis to city facilities. Tucson District Energy also exports and sells electricity to the local electric utility.