Moving Towards a Sustainable Energy Future

At present there is no silver bullet that will guarantee a sustainable energy future. To achieve true sustainability, a lot of hard work and difficult decisions lie ahead. Pinnacle West believes that a sustainable energy future includes the following components:

• Renewable energy
• Conventional fuels - used more efficiently (e.g. clean coal - IGCC/hydro gasification)
• Nuclear power
• Highly-efficient end users
• An educated public
• Robust consumer choice
• Optimal use of resources
   

APS has significant programs in place to address these issues, including:

• Electricity generation from renewables
• Technology development and transfer
• Future fuels (e.g. hydrogen, synthetic natural gas, biofuels)
• Market development
• Customer choice
• Education and outreach

Our efforts in these areas are described in this section and in other sections of this report. In addition, we have a robust Demand Side Management program which focuses on efficient end users and high-efficiency consumer products.

Renewable Energy

APS’ Clean Energy program had a tremendous year in 2005. APS signed contracts for a total of 141 MW of renewable energy, created the APS Renewable Energy Department, and began to gear up for a new renewable energy standard from the Arizona Corporation Commission.

Early in 2005, APS issued a Request for Proposals (RFP) for renewable energy. Response was significant, and APS signed contracts for 141 MW of renewable energy including biogas, geothermal and wind energy (see table below). The company anticipates conducting additional renewable energy RFPs in the near future. APS also made significant changes within its organization to integrate renewable energy into its core business planning. In late 2005, the Renewable Energy Department was created within APS’ Corporate Planning and Resource Acquisition group, signifying the importance of renewable energy to the future of APS.

Also in 2005, APS requested permission from the Arizona Corporation Commission (ACC) to offer an expanded green energy program. This program will allow customers to purchase a mixture of renewable energy including solar, biogas, biomass, wind and geothermal energy. APS anticipates offering this program in 2007.

The ACC continues to explore revisions to the Environmental Portfolio Standard (EPS). APS anticipates the standard will be revised in 2006 and that new targets will be established requiring five percent of APS’ total electricity to come from renewable resources by 2015 and 15 percent to come from renewable resources by 2025. Increased emphasis will be placed on distributed generation. APS' funding for the EPS is projected to be more than $35 million annually.

APS has long been a leader in the development of solar energy. With solar installations across the state and with the operation of the APS Solar Test and Research (STAR) Center, APS is one of the industry leaders in solar technology. APS now owns and operates approximately 5.6 megawatts of solar generation around the state, and supports customer installations of distributed solar generation. In addition to solar, the company is an active partner in the development and testing of other renewables such as biomass, hydrogen and wind technologies. We also have a long history of research and support for clean fuels to power mobile transportation, including electric vehicles, hydrogen-powered vehicles and the use of bio-diesel in our fleet trucks.

APS' service territory has been one of the fastest growing in the nation and is expected to experience continued strong growth. APS will continue to take important steps to plan for the energy needs of our customers. APS purchased the Sundance Generating Station in 2005, adding another 450 megawatts of clean burning natural gas generation to our fleet. Also, with the conclusion of our recent rate case, APS acquired approximately 1,800 megawatt of generation from our non-regulated affiliate Pinnacle West Energy.

Going forward, APS will be in the market for additional power that meets its needs for a diverse portfolio of economic resources as well as its commitment to an increasing amount of renewable generation. 

APS Renewable Energy Projects

Notes: 
1.  Project resulted from 2005 request for proposals

Please review the links below for additional information on several of our important clean energy efforts:

• Solar Energy
• APS Emissions to Fuel Project
• Manure to Renewable Energy Project
• APS Hydrogen Fuel Program