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Fortis Inc. FTS recently announced plans to reduce 80% of carbon emissions from its Arizona-based utility Tucson Electric Power (TEP) by 2035. This will result in cutting more than 50 million tons of carbon footprint in as pan of 15 years. TEP’s gradual transition to clean energy and reduction of emission is part of its Integrated Resource Plan (IRP).
Highlights of the Plan
The plan will include 2,457 megawatts (MW) of new wind and solar power system inclusive of 457 MW that is expected to come online next year. Also, new energy storage systems of 1,400 MW are a key element of this plan.
Through this initiative, the companyaims at gradually eliminating the use of coal-fired resources. Moreover, implementation of this plan will help eradicate the use of surface water to generate power along with 70% decrease in groundwater usage. In fact, the project will continuously support energy efficiency programs to minimize the consumption of power during peak demand.
Shift to Clean Energy Sources
Per IRP, TEP will generate 40% power in 2030, more than 60% by 2033 and more than 70% by 2035, using new wind and solar generating capacity. Fortis’ plan to switch to renewable energy resources are in line with its IRP guideline and these initiatives are likely to save costs significantly, post 2030.
Remarkably, TEP is working to complete two large New Mexico wind farms and a local solar plus storage project that will expand its community-scale clean energy resources by more than double within next year.
In addition to Fortis, utilities like Duke Energy DUK, DTE Energy DTE and Avista Corporation AVA drafted a plan to supply 100% clean energy to customers.
Fortis is taking initiatives to replace coal-fired units with higher energy from wind farms, solar arrays and energy storage systems. Notably, with the retirement of TEP's coal-fired generation, the company is likely to have a coal-free generation mix.
The company aims to achieve this shift to cleaner energy resources through a cost-effective plan that supports reliable, affordable service from increasingly sustainable resources. This will help the company function in a way that will combat climate changes.
Shares of Fortis have lost 10.3% compared with the industry’s decline of 15.4% in the past six months.
Currently, the company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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