Since its inception, APS has been committed to providing affordable and reliable electricity to the people of Arizona. Today, Arizona faces the challenge of an exploding population. As the state’s largest and longest-serving utility, APS is diligently working to find solutions that work not only for today but for tomorrow. A big part of this solution includes renewable energy. 

APS is dedicated to increasing the role of renewable energy in Arizona’s future. A long-time leader in solar energy research and development, APS in 2006 added another major component to its renewable energy portfolio with 90 megawatts (MW) of wind generation. In addition to the wind power, APS added 10 MW of geothermal capacity and increased its solar generation output to 10 million kilowatt-hours – a record for both the company and the state of Arizona.

The company is also developing other renewable technologies such as biomass, biofuels, algae and solar trough among others. The company utilizes consumer programs, education and outreach, technology development, and generating and procurement to further the development of these sustainable energy resources which will power Arizona ’s future. The company recently issued a request for proposals for renewable energy, which will help meet the requirements of the Renewable Energy Standard (RES) set by the Arizona Corporation Commission (ACC). 

	"As of January 1, 2007 Arizona Public Service has the capacity to provide 106.5 megawatts of renewable energy, enough for almost 30 thousand customers. This marks a 1,777 percent increase from the previous year."

Renewable Energy Standard
In 2006, the ACC gave approval to the RES, which requires regulated utilities, including APS, to generate 15 percent of their energy from renewable sources – solar, wind, biomass, biogas and geothermal – by 2025. The RES replaces the previous Environmental Portfolio Standard, which went into effect in 2001.

Under the RES, in 2007 APS is required to have 1.5 percent of retail energy sold to come from renewable sources, increasing to 5 percent by 2015 and further increasing by 1 percent each year until 2025, when it reaches 15 percent. There is no specific obligation to fulfill any portion of that 15 percent with a particular renewable resource. The standard does require that nearly one-third of the total renewable portfolio consist of distributed energy. Distributed energy includes customer-owned, customer-generated electricity, such as solar photovoltaic (PV) rooftop systems.

The distributed generation requirement begins at 5 percent in 2007, increasing 5 percent each year until it reaches 30 percent in 2012. In addition to this requirement, one-half of the distributed generation must come from residential applications, the other half from non-residential projects.

If all goes as planned, by 2025, around 4.5 percent (30 percent of 15 percent) of APS’ total energy sales will be generated by customers. Since it’s not practical to put up a windmill or start a biogas plant in most backyards, a large proportion of the residential distributed generation requirement likely will be met with solar projects. One measure of the popularity of APS’ distributed renewable incentive program, primarily roof-top solar installations, is the number of incentive payments that have been processed. The expansion of the program from more than 200 payments processed in 2005 to almost 500 in 2006 is evidence of its increasing popularity.

Since the cost to generate power from renewable resources is almost always more expensive than conventional sources, the RES provides for a surcharge on customer’s bills as a funding mechanism to finance these initiatives. The amount of the surcharge that APS will seek has not been determined at the time of this report, and will depend on the plan developed by APS to meet the goal.

APS Renewable Energy Programs
APS’ commitment to renewable energy is divided into four initiatives:

• Procurement and Generation - producing and purchasing renewable energy for our customers
• Consumer Programs - facilitating  customers use of and support for renewable energy generation, including photovoltaic grid-tied and remote solar (off grid) systems and small solar hot water systems
• Technology Development - developing new, more-efficient ways of producing renewable energy. This is discussed further in the Technology Section of this report
• Education and Outreach - educating teachers and consumers about the availability of renewable energy today and tomorrow

Procurement and Generation

APS is building a portfolio of renewable energy in a cost-effective and prudent manner. As of January 1, 2007 APS has the capacity to provide 106.5 megawatts of renewable energy, enough for almost 30 thousand customers. This marks a near 1,800 percent increase from the previous year. While some of this energy is generated by APS, most is purchased through long-term contracts.

Green Rates
APS has proposed a green rate structure to the Arizona Corporation Commission (ACC). Under this proposal, customers can purchase either 100 kwh of green energy for $1.00 or 35, 50 or 100% of their total energy from green resources for what is effectively a $0.01/kwh premium today. The current mix includes wind and geothermal. Subscriptions are limited to available supply. The energy sold under this program will not count toward RES goals, which allows us to go beyond regulatory mandates through customer choice.

This proposal was under review by the ACC at the time this report was written.

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

Solar 
For more than 25 years APS has been a national leader in solar research and development, and in the practical use of solar as an energy source for utility power. Click on the solar link to learn more about our solar energy programs. 

Wind 
With the recent addition through long term contract of 90 megawatt (MW) from Aragone Mesa Wind Farm, wind power is a major component of our renewables portfolio. Please click on the link to learn more about our wind energy program.