Renewable energy is a critical component of our future energy mix.  Renewable energy will lower carbon emissions, diversify our generation mix, reduce dependence on fossil fuels and can help create economic opportunities in Arizona

For all of 2007, APS purchased or generated 324,094 MWh of renewable energy, or approximately 1.1 percent of total retail sales. This total includes renewable generation APS has under contract, APS-owned solar generation, as well as the energy generated by Solar Partners Incentive Program ("SPIP") participants. It also represents a nearly three-fold increase in renewable energy on the APS system over 2006.

While we are exploring a wide range of renewable sources, including biomass and geothermal, the majority of our future renewable energy will likely come from solar, which is the most available natural resources for renewable energy in Arizona.  APS has long been a leader in solar energy development and implementation. Our Star Center is one of the leading solar energy research facilities in the world. 

APS Renewable Energy Programs
APS’ commitment to renewable energy is divided into three 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

Green Rates and Solar Partners Incentive Program
APS offers its customers the opportunity to voluntarily participate in our Green Choice Program.  As a Green Choice member, you choose how much of the energy you use is produced from renewable resources. A small premium is added to the normal monthly charges. This is a convenient, affordable way to help preserve the environment while providing for a secure energy source for our future.  The Green Choice Program offers customers two different green rates:

• The Green Choice Block option (GPS-1) is designed to offer the opportunity to purchase a fixed amount of monthly usage from renewable resources. Each kWh (kilowatt hour), available in 100 kWh blocks, is priced at a premium of $0.01 plus tax, in addition to the normal monthly charges. The customer chooses how many blocks he or she wishes to purchase.
• The Green Choice Percentage option (GPS-2) is designed to give the customer the option to choose what percentage of actual monthly usage is provided by renewable resources. Each kWh purchased is priced at a premium of $0.01 plus tax, in addition to the normal monthly charges. They can choose 10 percent (non-residential only), 35 percent, 50 percent or 100 percent of your monthly usage.

APS also offers financial incentives to residential and commercial customers who install qualified solar systems through our Solar Partners® Incentive Program.   Participation in the Solar Partners Incentive Program continued to increase in 2007.  During 2007, APS paid over $5 million in incentives to customers on a total of 529 installations.  Of those installations, 277 were photovoltaic and 252 were solar water heating.  APS is expecting approval of its RES Implementation Plan in the first half of 2008 and therefore expects to see a continued increase in Program participation with increased marketing funds and several new technologies becoming eligible for incentives.

APS’ efforts to develop and promote the use of renewable energy were recognized in 2007 by some of the most respected media in the United States:

• The APS Saguaro solar trough was featured on ABC News’ live 20/20 program, Planet Earth 2007: Seven Ways to Help Save the World, a live ABC News program that aired in April.
• The Saguaro solar trough also was featured in a special green section produced by The New York Times in March.
• The company’s Emissions-to-Biofuels project at the Redhawk Power Plant was featured in an October 2007 National Geographic cover story about how plants are being developed into fuel.

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
Recently APS signed a long-term contract with a Santa Rosa, New Mexico company to bring 90 megawatts (MW) of wind energy to the Valley of the Sun.

The 90-megawatt (MW) Aragone Mesa Wind Farm will serve about 22,500 APS customers. Aragonne Wind, LLC, a wholly-owned subsidiary of Babcock & Brown Operating Partners LLC owns and operates the facility.  APS has a long-term agreement to purchase all the power from the farm.   It increased APS’ renewable energy portfolio from 16 MW (10 MW geothermal, 6 MW solar) to 106 MW — a 563 percent increase.  Click here to learn more about the Aragonne Wind project.