Dive Brief:
- Salt River Project on Monday issued an all-source request for proposals for at least 500 MW, potentially replacing a pending proposal for an expansion of the utility’s natural gas generation resources.
- To meet rising summer peak demand, SRP is seeking at least 200 MW to to be online as early as May 2026, and at least 300 MW to be online by May 2027. In the same RFP, the utility said it seeks to add up to 500 MW of new carbon-free resources, which could be met by the all-source RFP.
- A 2021 all-source RFP indicated gas turbines were the most cost-effective way for the utility to maintain reliability and a path to decarbonization, but SRP said it “recognizes that the market is changing and evolving quickly.” Federal incentives for clean energy resources could also alter the equation, it said.
Dive Insight:
Arizona is among the nation’s fastest-growing states, and its utilities are developing new resources to meet rising electricity demand.
Officials at Arizona Public Service, also on Monday, said they are finalizing procurement decisions for up to 1,500 MW to meet the state’s growing demand.
SRP’s RFP seeks sufficient power for more than 112,000 homes, the utility said.
Phoenix and Maricopa County lead the nation in population growth and economic development, SRP said in a statement, and the utility “continues to experience significant increases in customer electricity demand.” There are also new challenges to meeting the demand, the utility said, including “supply chain issues, planned coal retirements, and decreased hydroelectric generation from the drought-stricken Colorado River.”
Along with the 500 MW SRP is seeking, the utility said it seeks to add “up to 500 MW of new carbon-free resources. To the extent that 500 MW of carbon-free energy is not satisfied by the selected proposals for peak capacity, SRP may procure additional carbon-free resources.”
SRP also said it is developing a proposal for flexible natural gas units “to be located at a site to be selected in the coming months,” based on its analysis of responses to an RFP it ran in 2021. But the utility acknowledged there may be more cost-effective resources available today.
SRP “recognizes that the market is changing and evolving quickly and that the passage of the Inflation Reduction Act provides an opportunity to consider other resource alternatives,” the utility said. SRP issued the all-source RFP “to seek cost-effective alternatives to the flexible natural gas proposal that it will be developing.”
The utility said it expects to present its resource options and a procurement recommendation to its board of directors later this year.
SRP had previously planned an 820-MW expansion of the gas-fired Coolidge Generation Station, but the Arizona Corporation Commission rejected the controversial plan in 2022.
