Randolph residents breathed a sigh of relief last month after our state’s utility commissioners shot down a controversial gas-fired power plant expansion in Coolidge.
But the win could be short-lived now that Salt River Project is aiming to revive its project – with little to no changes to the initial failed proposal.
Instead of fighting for a costly $953 million project, SRP should explore a more cost-effective route to meet Arizonans’ energy needs.
An obvious alternative: Conduct a competitive bid process to find the best solution to increase its energy generation capacity. Not doing so in the first place was a misstep that Arizona Corporation Commission Chairwoman Marquez Peterson cited as a reason for her vote against the initial proposal.
A competitive bid would prove what's cheapest
Taking a technology-agnostic approach can help SRP guarantee its customers the most cost-effective and reliable electricity generation. If expanding the Coolidge Generation Station is the most cost-competitive option, SRP would be able to prove it by comparing the plan to competitive bids from energy companies.
What SRP is more likely to find, however, is that advanced energy solutions, like solar, wind and battery storage, can reliably meet capacity needs at a competitive price and provide ratepayers with the cleanest energy, at the lowest cost.
The good news is, it’s not too late for SRP to do so.
The Coolidge expansion was proposed to meet the needs of customers when energy demand is highest, particularly as the Phoenix metro area grows. This will get tougher as SRP picks up more customers and Arizona summers get hotter, especially with this year's temperature outlooks.
But there are ways to make running air conditioners easier on our pocketbooks without building capital-intensive power plants.
For instance, SRP could expand use of residential energy-saving programs and technology, like smart thermostats, which can help save households money while also curbing energy use at critical times. SRP has more than 1 million residential customers, but only had roughly 46,000 residential thermostats signed up for their program as of last year.
Tech, grid improvements could reduce demand
And SRP could better manage times of peak energy demand without asking people to use less A/C. Nearly 50% of how people use electricity in their home can be shifted to lower cost, lower demand times, according to an energy consultant for the Corporation Commission, all without impacting people’s comfort.
That means SRP could better incentivize households and businesses to do activities such as water heating, clothes drying, pool and spa filtering, and electric vehicle charging at the lowest cost time so that it isn’t happening when the grid is most strained.
Another way SRP could avoid costly, unnecessary investments in power plants is by better connecting with other power providers across the region. There’s growing momentum in the West to make better use of our power grid through what’s called a regional transmission organization.
This multistate high-voltage network would improve electricity reliability and reduce costs for residents and businesses by better pooling resources from neighboring utilities.
Working within a regional transmission organization would allow SRP to reliably get electricity from the lowest-cost source, no matter where it’s made in the West. And, with more resources collectively shared across the region, the costs for everyone would go down.
If SRP is wise, it'll take regulators' advice
Most of the rest of the country already operates in a market like this, even though the West doesn’t yet have this type of structure. In fact, right next door, the Southwest Power Pool, which spans North Texas to North Dakota, recently cost-effectively met 90% of electricity demand with renewables.
A recent Department of Energy-backed study found that this kind of regional wholesale electricity market would enable the most cost-effective and reliable access to electricity generation.
And the strategy is particularly useful during bad weather, including Arizona heat waves or dangerous storms.
Making short-term arrangements to procure electricity generated outside its service area and investing in the technologies and programs to reduce energy demand across the region, among other tactics, would allow SRP to cost-effectively deal with Arizona’s rising energy needs through 2025.
That’s more than enough time to solicit proposals and chart a new course for the coming years.
Instead of requesting a rehearing of an unpopular gas plant decision, Salt River Project should follow Arizona Corporation Commission’s advice:
Study and consider all the options, then chart the path forward that best meet its reliability, cost and clean energy commitments to Arizona customers.
Shelby Stults is a policy principal at Advanced Energy Economy, where she leads legislative and regulatory engagement in Arizona and works with key decision-makers to encourage strong energy policy. Reach her at email@example.com.
This article originally appeared on Arizona Republic: SRP can drop power plant expansion and still meet demand