Tracking our 2030 target.During 2023, the share of APS’s energy supply from clean resources was 51%, which includes energy from nuclear, renewables and demand side management (DSM). We are on track to reach our goal of 65% clean resource mix by 2030. In addition, by 2030, we aim for 45% of our generation portfolio to be from renewable energy.

Learn more about our plans in our Integrated Resource Plan and an article that explains the  meaning of carbon-free energy.

Opportunities for coal reduction. In June 2021, APS and the owners of Four Corners entered into an agreement that would allow Four Corners to operate seasonally at the election of the owners as early as fall 2023, subject to the necessary governmental approvals and conditions associated with changes in plant ownership. Under seasonal operation, one generating unit would be shut down during seasons where electricity demand is reduced, such as the winter and spring. The other unit would remain online year-round, subject to market conditions as well as planned maintenance outages and unplanned outages. As of the date of this report, APS has elected not to begin seasonal operation due to market conditions.

Planning a responsible transition from coal. The transition away from coal-fired power plants and toward a clean energy future will pose unique economic challenges for the communities around these plants. APS worked with stakeholders and leaders of the Navajo Nation to consider the impacts of ceasing operation of APS coal-fired power plants in the communities surrounding those facilities to propose a comprehensive coal communities transition plan. The proposed framework provided for substantial financial and economic development support to build economic opportunities and addressed a transition strategy for plant employees. We are committed to continuing our established partnership with the Navajo Nation by addressing other areas as well, including expanding electrification and developing tribal renewable projects. Our proposed plan supports the Navajo Nation, where the Four Corners Power Plant is located, the communities surrounding the Cholla Power Plant and the Hopi Tribe, which is also impacted by closure of the Navajo Generating Station. On November 2, 2021, the Arizona Corporation Commission (ACC) approved a modified plan that provides:

• Navajo Nation - $10 million and up to $1.25 million for the electrification of homes and businesses
• Navajo County Communities - $500,000
• Hopi Tribe - $1 million and up to$1.25 million for electrification of homes and businesses

In 2023, in support of energy and economic development within the Navajo Nation, APS included a request in its All-Source Request for Proposal for 250 MW of renewable generation to be located within the geographic boundaries of the Navajo Nation. APS plans to seek an additional 350 MW of renewable generation within or near the Navajo Nation within one year of exiting the Four Corners Power Plant.

Adding clean resources to meet customers’ growing energy needs. To date, APS has a diverse portfolio of existing and planned renewable resources totaling over 5,000 MW, including solar, wind, geothermal, biomass and biogas. Of this portfolio, over 3,000 MW are currently in operation and approximately 1,900 MW are under contract for development or are under construction. All procurement occurs through competitive solicitations or as a QF through PURPA, ensuring competitive pricing for new resources as we plan to serve our growing economy.

Linking our commitment to executive compensation. In February of 2022, the Human Resources Committee revised the metrics for our performance share grants and added a clean megawatt installed metric to reflect our commitment to our clean energy commitment.

Steady production of carbon-free nuclear power from Palo Verde Generating Station. The station continued to do its part, producing clean nuclear power with a 91.42% capacity factor (an important measure of efficiency) for 2023.

Providing tools and programs to empower customers. APS’s demand response programs use a virtual network of smart home products, like thermostats, water heaters and energy storage to reduce energy use on Arizona’s hottest summer days and shift energy demand to when more solar power is available. This shift is just one of the strategies and innovative solutions our customers can use to help us reduce carbon emissions to meet our clean energy goals.

Going beyond the generation mix to help reduce emissions in other sectors. To help achieve a cleaner environment and enable more drivers to adopt electric vehicles (EVs), APS has provided business customers with free EV-charging equipment, installation and maintenance through the Take Charge AZ Program. As of year-end 2023, we have installed 704 Level 2 (L2) charging ports at customer locations. While in effect for the majority of 2023, the program was closed to new customers by the Arizona Corporation Commission in December 2023. In addition, in partnership with Electrify Commercial®, we installed five Direct Current Fast Charger (DCFC) charging stations throughout Arizona. The Arizona locations are in Sedona, Show Low, Globe, Payson and Prescott.

Learn more about customer tools and programs and the role of customers in designing Arizona’s clean energy future.

We have committed to end the use of coal at our remaining Cholla units by 2025 and have made an overall commitment to stop relying on coal by 2031, which means we will exit the Four Corners Power Plant seven years earlier than our original plan. We have retired more than 1,000 MW of coal-fired electric generating capacity. These closures, in addition to other measures taken by APS, have resulted in a reduction of carbon emissions of 36 percent since 2005, which is equivalent to removing more than 1.4 million passenger vehicles from the roads.

With the transition away from coal-fired power plants, we work closely with impacted employees and local communities to ease the transition and support long–term economic planning for a future beyond coal.

Learn more about our  coal communities transition plan.

Nuclear. Through 2023, Palo Verde Generating Station has been the nation’s largest power producer of any kind for 32 years – all of it clean and carbon-free. As the heart of the APS generation fleet, it provides the foundation for the reliable service our customers count on.

The plant is a critical asset to the Southwest, generating more than 32 million megawatt-hours annually – enough power for roughly 3.4 million households, or approximately 8.5 million people. In addition, Palo Verde provided much needed support during the recent Texas power crisis by delaying the start of equipment reliability repairs, which enabled full-power output when it was most needed.

Nuclear energy works with renewable generation to create a more reliable, diverse clean-energy portfolio. Palo Verde produces clean energy at all hours supporting the basic electrical needs of our customers when solar and wind are not available. Without nuclear energy, carbon emissions would increase due to a greater reliance on carbon-emitting fossil fuels to fill the inevitable energy void during periods of low renewable generations, such as after sunset. Nuclear energy can facilitate increased adoption of EVs and improve the environment by supplying zero-emission energy to charge EVs and large-scale batteries.

While Palo Verde has seven owners in four states, nearly half of its output is dedicated to serving Arizona consumers. Electricity generated by the plant annually displaces more than 13.2 million metric tons of greenhouse gas (GHG) emissions that otherwise would have been produced. It is estimated that Arizona’s energy-related emissions would be about 38% higher without the displaced carbon emissions from Palo Verde.

Additionally, as the nation’s only nuclear plant that is not located on a body of water, Palo Verde recycles more than 20 billion gallons of wastewater annually from surrounding municipalities to cool the plant. This represents more than 35% of all effluent used in Arizona.

Learn more about Palo Verde Generating Station.

Renewables. With nearly 300 sunny days each year in Arizona, APS and its customers are transforming sunshine into a renewable energy source that powers an increasing number of homes and businesses across the state. APS supports customers interested in protecting the environment and reducing their energy bills by installing renewable energy technologies like rooftop solar systems at their homes, schools and businesses. More than 177,000 solar systems on customer rooftops and parking structures are already connected to the APS smart grid, providing more than 1,660 MW of robust solar capacity. In 2023, the amount of residential solar generating capacity installed in APS service territory was 8% higher than 2022. Nationally, only Hawaii and California have more residential solar capacity per capita than Arizona. As the largest electricity provider in the state, APS and its customers have been a big part of that achievement:

• APS ranks fourth nationally for the percentage of residential customers with rooftop solar systems
• APS customers installed a record amount of residential solar capacity in 2023
• 14% of all residential customers in APS territory have a solar system

Renewable Energy Portfolio. In 2006, the Arizona Corporation Commission (ACC) adopted the Renewable Energy Standard (RES). Under the RES, electric utilities that are regulated by the ACC must supply an increasing percentage of their retail electric energy sales from eligible renewable resources, including solar, wind, biomass, biogas and geothermal technologies. The renewable energy requirement is 13% of retail electric sales in 2023 and increases annually until it reaches 15% in 2025.

To date, APS has a diverse portfolio of existing and planned renewable resources totaling 5,010 MW, including solar, wind, geothermal, biomass and biogas. Of this portfolio, 3,072 MW are currently in operation and 1,938 MW are under contract for development or are under construction. Renewable resources in operation include 415 MW of facilities owned by APS, 1,034 MW of long-term purchased power agreements, and an estimated 1,623 MW of customer-sited, third-party owned distributed energy resources.

APS’s strategy to achieve its RES requirements includes executing purchased power contracts for new facilities, ongoing development of distributed energy resources and procurement of new facilities to be owned by APS. In June 2023, APS issued a Request for Proposal (RFP) to address resource needs for 2026 and beyond. The 2023 RFP solicited competitive proposals for approximately 1,000 MW of resources, including at least 700 MW of renewable resources, with proposed projects coming into service beginning in 2026 through 2028. Once APS secures those important resources and closes out the 2023 RFP, APS intends to issue APS’s next RFP to address future resource needs.

Learn more about our Integrated Resource Plan and All-source Request for Proposal.

 

Demand Side Management. Technologies such as smart thermostats, LED lighting, water heaters and efficient EV chargers have given customers more power to control their energy usage and potentially reduce their costs. As more emerging technologies such as energy storage devices become commercially viable, they will continue to change how customers interact with us. By being proactive and working with our customers to identify and respond to their changing needs, we remain well positioned to deliver value. Furthermore, by providing customers the opportunity to manage their energy and peak demand, we can expand the use and understanding of load-management technologies, encourage customers to reduce CO2 emissions, use energy during off-peak hours and better align with solar production and system peak conditions. Taking these innovations to scale will help us achieve our bold Clean Energy Commitment.

Learn more about how we are Evolving Residential Energy Management to be a Clean Peak Resource.

APS’s demand response programs use a virtual network of smart home products, like thermostats, water heater, and energy storage to reduce energy use on Arizona’s hottest summer days and shift energy demand to when more solar power is available. Chief among the programs connected to the APS virtual power plant is the company’s signature residential thermostat program, APS Cool Rewards. With more than 83,538 residential smart thermostats enrolled, customers benefit from incentives, discounts, and energy-savings options for voluntarily conserving energy. APS Cool Rewards boasts a capability of shedding more than 145 MW of dispatchable peak capacity to help meet demand for energy on hot summer days. This energy avoidance saves customers money, helps the environment, and builds a more robust electrical grid. APS set a 2023 goal of reaching 100,000 thermostats to provide over 150 MW of summer capacity.

Learn more about the role of our customers, virtual power plant and customer programs.

Hydrogen. One of the more promising emerging opportunities is the use of hydrogen. A substantial majority of the world’s industrially produced hydrogen creates carbon dioxide as a byproduct. However, when hydrogen is produced by electrolysis using clean electricity (such as nuclear, solar or wind energy), the resulting hydrogen is carbon-free. Producing hydrogen when there is an excess of carbon-free electricity creates an energy vector that can be used as another clean energy storage technology for meeting peak demand. This clean hydrogen can also be used as an energy carrier for evolving hydrogen transportation technologies, and as a feedstock to produce synthetic hydrocarbons that introduce no new carbon into the environment.

In 2022, Arizona's three public universities, along with four energy providers including APS, announced the formation of an interdisciplinary coalition called the Arizona Center for a Carbon Neutral Economy (AzCaNE), with the goal of achieving a carbon neutral economy in Arizona. AzCaNE's first action was to pursue an Arizona-led approach to securing regional clean hydrogen hub funding. Leading professionals from the seven founding participants, along with representatives of Arizona, the Navajo Nation and companies working to develop a hydrogen ecosystem within Arizona make up the governance committee for AzCaNE's efforts. AzCaNE submitted an initial hydrogen hub concept paper to DOE, which in turn encouraged the submission of a full application for funding. In response, AzCaNE formed the Southwest Clean Hydrogen Innovation Network (SHINe) and submitted an application for funding on its behalf. SHINe was not selected as one of the seven regional hubs to be awarded funding by DOE. APS is currently maintaining a participatory role in AzCaNE as the organization continues to explore ways to educate stakeholders and promote low-carbon technologies.

Learn more about the SHINe project.

Energy Storage. APS deploys several advanced technologies on its system including energy storage. Storage can provide capacity, improve power quality, be utilized for system regulation, integrate renewable generation, and, in certain circumstances, be used to defer certain traditional infrastructure investments.

Energy storage can also aid in integrating higher levels of renewables by storing excess energy when system demand is low and renewable production is high and then releasing the stored energy during peak demand hours later in the day and after sunset. APS is utilizing grid scale energy-storage projects to benefit customers, to increase renewable utilization, and to further our understanding of how storage works with other advanced technologies and the grid. We are preparing for additional energy storage.

Utility-scale energy storage is an essential piece of our future resource mix, and over next several years, APS will be investing heavily in affordable renewable and clean technologies, including utility-scale batteries. As of the end of 2023, APS has plans to install more than 2,182 MW of energy storage. Storage technologies will help APS use regional excess solar generation that is frequently available at low, zero and even negative prices. We remain dedicated to a responsible adoption and integration of this nascent technology and have committed to a maximum of three gigawatts of battery energy storage through 2027. We will continually evaluate this cap as more industry experience with the technology is gained.

Learn more about our energy storage projects.

Overall Air Emissions. In 2023, APS’s carbon dioxide emissions were about 10.5 million metric tons. This represents a 36% decrease in annual carbon dioxide emissions since 2005.

We also track emissions of other traditionally tracked air pollutants. Since 2005, as a direct result of our commitments to reduce air pollution and institute operational efficiency enhancements, we have achieved reductions in annual emissions of Nitrogen Oxides (NOx) of 87% and annual emissions of Sulfur Dioxide (SO2) of 88% from our overall fleet.

Learn more about air emissions data.

Carbon Intensity. For internal tracking to our Clean Energy Commitment, we monitor carbon intensity, which we define as the measure of total carbon emissions, measured in pounds per megawatt hour of energy delivered by APS to our customers. It includes total emissions from APS-owned generation and power purchase agreements, as well as megawatt hours from distributed generation and megawatt hours saved from demand side management.

Learn more about carbon intensity data.

Greenhouse Gas Reporting. To track our progress toward our Clean Energy Commitment, we report our Scope 1 and Scope 2 carbon emissions. Scope 1 emissions include all direct emissions arising from the sources we own and control (e.g., emissions associated with fuel combustion in boilers, furnaces and vehicles). These direct emissions result from activities that physically release greenhouse gases into the atmosphere. In 2022, our Scope 1 emissions increased slightly from the prior year and were about 12.7 million metric tons.

Scope 2 emissions include all indirect emissions associated with electricity, steam, heating, or cooling purchased for use in our owned and controlled operations. These indirect emissions occur outside of our reporting boundary and are emitted by power generation sources owned or controlled by another party. Scope 2 also includes indirect emissions associated with Transmission and Distribution (T&D) line losses from electricity that is not generated by the company transmitting or distributing the power. In 2020, our Scope 2 emissions reporting boundary changed to include of T&D line losses from purchased power. In 2022, our market-based Scope 2 emissions were about 91,700 metric tons.

Learn more about greenhouse gas emissions data.

CDP Reporting. APS voluntarily reports GHG and water information to CDP, a global nonprofit organization that collects and analyzes environmental data and benchmarks companies for investors to use in financial decisions. Our scope 1, 2 and some of scope 3 GHG emissions as well as water withdrawal and discharge data are reported to CDP and are  third-party verified.

Agency reporting. We submit a comprehensive annual report of our GHG emissions to the Environmental Protection Agency (EPA) as required by federal law. Additionally, we are required to report releases of chemicals listed in the federal Toxic Release Inventory (TRI) program to the EPA. Our reportable releases under the TRI program primarily include air emissions from power plants and coal ash disposal. Reports for Four Corners Power Plant and the Cholla Power Plant can be found on the EPA TRI web site.