Tucson Electric Power plans to move away from coal, but the transition comes with a roughly $170 million conversion bill that customers would eventually cover through electric rates.
Here's what to know
An end to TEP's stake in the Four Corners Power Plant in 2031 is part of the utility's preferred long-term resource plan. The plan also calls for two coal units at the Springerville Generating Station to run on natural gas by 2030, according to KGUN.
By 2041, TEP's planned additions would include 300 megawatts of gas-fired generation, alongside 680 megawatts each of solar capacity and battery storage.
More background
What customers would see in their electric rates remains unknown, TEP said, even though its preferred option could save them up to $260 million in projected costs compared with the alternatives it reviewed.
Until a new resource enters service, its costs would not be passed on to customers.
TEP pointed to two variables in determining the effect on bills: what resources cost when they enter its portfolio, and the market conditions when it next files for a rate change.
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What's being done?
Nearly 800 megawatts of generating capacity would remain available after the two units switch from coal to gas, according to TEP, and the utility estimated its carbon emissions would fall by roughly 40%.
Changes in electricity demand, costs, and market conditions can prompt adjustments to the utility's long-term resource plan, which TEP revises every three years.
"Although the [Integrated Resource Plan] guides our resource planning, decisions to invest in new resources will be made primarily through the [all-source request for proposals]," said JD Wallace, a spokesperson for TEP.
The company added, "Because this is a 15-year plan, the addition of solar and battery storage will take place in different stages staggered over numerous years over time."
Where can I learn more?
TEP's conversion plan raises questions about what customers will pay and how utilities are investing in fossil fuels.
• Arizona households could face an 11.2% TEP bill hike, followed by yearly rate increases.
• A New Mexico coal plant could operate seven years beyond 2031 as Arizona demand climbs.
• Arizona gas customers could face another 10.5% rate hike, following an earlier 7.5% increase.
• In Texas, a new 1,215-megawatt gas plant could supply enough electricity for 230,000 homes.
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