ORIGINAL REPORTING: Arizona Proposes An Equitable Coal Closure Plan
APS's plan for closing coal plants could be a gamechanger, analysts say, but who will pay? Arizona's dominant utility seeks assistance for those hit by coal plant closures but must protect utility finances
Herman K. Trabish, Dec. 18, 2020 (Utility Dive)
Editor’s note: Finding equitable ways to close coal plants is near the top of the 2021 agenda.
Arizona Public Service (APS) has captured the attention of the Western U.S. power sector with its plan to finance the economic transition of communities affected by the closure of its remaining coal plants.
Economic reality defeated the Trump administration's efforts to protect coal, and the energy transition is expected to accelerate under President-elect Biden. But few of the Western utilities already closing uneconomic coal facilities have taken commensurate financial responsibility for helping to transition the often profoundly affected communities. The $144.45 million long-term APS plan could be a game-changer, the utility and economic justice advocates agree.
Other transition funding plans are incomplete or offer much less compared to the size of the affected plants, Sierra Club Beyond Coal Campaign Western Region Director Evan Gillespie said. "APS is proposing to do what they are obligated to do and what so many other utilities are failing to do and it can change both the narrative and how utilities are held accountable going forward."
APS’s "Just Transition Plan" is directed largely at Navajo and Hopi communities most affected by closure of coal plants co-owned by APS and would support "a solid economic transition," Navajo Nation President Jonathan Nez said in an email. It would "electrify homes, increase renewable energy projects, and promote economic development" and could make Navajo Nation lands "a renewable energy epicenter."
But there are two big questions to be answered. The first is whether the Arizona Corporation Commission (ACC) will approve a plan that imposes some costs on shareholders but could force APS rates up. The second is whether the ACC will allow APS to use the controversial financial strategy of issuing low risk bonds to limit ratepayers’ exposure to the financial burden from closing the plants.
APS’s plan is the biggest expenditure for an equitable transition so far proposed in the U.S., according to APS and confirmed by Sierra Club’s Gillespie as well as by a survey by former ACC Chair Kris Mayes’ team at the Arizona State University (ASU) Energy Policy Innovation Council. It is intended as assistance to Hopi and Navajo and other communities affected by the closure of coal plants in which the utility owns shares, including the already-closed 2,409 MW Navajo Generating Station and the 2031 closures of the 2,270 MW Four Corners Generating Station and the 1,129 MW Cholla Generating Station, APS spokesperson Lily Quezada said… click here for more