AZ Sun program approved, APS utility expects to invest $500M for 100MW of PV power plants in Arizona

The Arizona Corporation Commission has approved the AZ Sun program, which local utility Arizona Public Service says will provide a major step forward in enhancing its ability to deliver solar photovoltaic energy to its customers. Through the expected four-year life of the program, APS plans to invest up to $500 million for 100MW of turnkey PV power plants across the state.

Developers will be selected to design and build the systems, which APS will own; the plants will be selected through competitive procurement processes.

The company's Request for Proposal for new sources of solar energy (issued Jan. 27) seeks to secure projects that could fulfill the initial phase of this program. Proposals are due April 7.

APS says it will develop a separate plan to procure 25MW of solar energy from independent power providers.

Until the costs of the first 50MW of the AZ Sun program are recovered in base rates, the costs will be recouped through the existing Renewable Energy Surcharge, according to the utility.

Costs for the remaining 50MW will be recovered through an adjustment mechanism to be determined in APS's next retail rate case, which the utility says it expects to file in June 2011.

Noting that there are “several important aspects of the AZ Sun program,” Jeff Luth, executive director of Az4Solar.org, told PV Tech of four reasons why he is pleased with the new APS effort.

“First, it recognizes that PV requires virtually no water and is thus a particularly attractive approach for Arizona,” he said.  “Second, medium-scale PV is a practical approach to ‘noncentral station’ solar generation because the plants can probably be developed relatively close to large pockets of customer load.”

“Third, from a job creation perspective, 100MW is a lot of PV panels, iron, and components, which should encourage companies in the PV supply chain to consider establishing or expanding Arizona-based operations.  Finally, the solar energy will be consumed where it is needed in Arizona, rather than exported,” Luth concluded.