TEP Adds Natural Gas Resource to Support a More Diverse, Sustainable Power Portfolio
Tucson Electric Power (TEP) has secured use of an efficient, low-cost,
natural gas power plant that will diversify the company’s energy
portfolio and support efforts to deliver at least 30 percent of the
company’s power from renewable resources by 2030.
TEP has reached an agreement with Salt River Project (SRP) to purchase
the output of Unit 2 at the gas-fired Gila River Power Station near Gila
Bend, Arizona. TEP, which already shares ownership of Gila River Unit 3,
also secured an option to purchase Unit 2 from SRP, which is acquiring
Units 1 and 2 at the plant.
“This modern, low-cost natural gas resource will help us maintain
affordable, reliable service for customers as we reduce our reliance on
coal-fired generating resources and build a more balanced and flexible
resource portfolio,” said David G. Hutchens, TEP’s President and CEO.
Unlike coal-fired power plants, the combined cycle gas-fired units at
Gila River can efficiently increase and decrease their energy output to
accommodate the variable production of solar and wind resources. That
makes them a good fit for TEP, which already provides more than 11
percent of its power from renewable resources and is working its way
toward an energy mix that includes 30 percent renewables by 2030 – more
than twice the level required by 2025 under Arizona’s Renewable Energy
Standard.
TEP will begin using power from Gila River Unit 2 after SRP’s
acquisition is finalized, which is expected by early 2018. TEP’s option
to purchase the 550-megawatt (MW) unit will be available for three years
after SRP takes ownership. TEP has relied on a 413-MW share of Gila
River Unit 3 since buying that unit in partnership with sister company
UNS Electric in 2014.
Energy from Gila River will help TEP offset the potential loss of 508 MW
of coal-fired resources, including:
-
170 MW at Unit 2 at the San Juan Generating Station in New Mexico,
which will close at the end of this year;
-
170 MW at San Juan Unit 1, which TEP does not anticipating using
beyond the June 2022 expiration of its coal supply contract; and
-
168 MW at the Navajo Generating Station, which will operate through
December 2019.
TEP also is expanding its renewable energy resources. Earlier this year,
the company announced plans to buy solar energy at a historically low
price of less than three cents per kilowatt hour from a new, local 100
MW solar array. That system and an accompanying 30 MW energy storage
system are expected to be in service by 2020. TEP anticipates an
additional 800 MW of new renewable capacity by the end of 2030, boosting
its total renewable energy portfolio to approximately 1,200 MW.
TEP provides safe, reliable electric service to nearly 420,000 customers
in Southern Arizona. The company, founded in 1892, is commemorating its
125th anniversary this year through various community service
initiatives. For more information, visit tep.com.
TEP and its parent company, UNS Energy, are subsidiaries of Fortis Inc.,
a leader in the North American regulated electric and gas utility
industry. For further information, visit fortisinc.com.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171013005029/en/
Copyright Business Wire 2017
Source: Business Wire
(October 13, 2017 - 8:00 AM EDT)
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