Arizona Corporation Commission Approves SRP Gas Plant Expansion and APS Settlement Deal in Decisions that are Bad for Ratepayers and Climate

PHOENIX, AZ – Today during the Arizona Corporation Commission’s (ACC) open meeting, the Commission sided with utilities Salt River Project (SRP) and Arizona Public Service (APS) in separate decisions that will cost ratepayers, negatively impact communities, and worsen air quality.

During the meeting, the Commission heard proposals from both utilities that are seeking to serve their own interests at the expense of communities and the climate, with SRP again requesting that the ACC reverse its decision to deny a permit for its proposed expansion of the gas-fired Coolidge Generating Station despite substantial changes to the project that were not originally proposed, and APS proposing a settlement agreement with Commission Staff that would saddle ratepayers with hundreds of millions of dollars worth of irresponsible investments at its Four Corners Power Plant.

Just last week, SRP filed a request to have the ACC reverse its decision to deny a permit for SRP’s proposed expansion of the gas-fired Coolidge Generating Station that would increase air pollution, cause harmful health impacts, and negatively affect surrounding communities. The Commission denied SRP’s proposed expansion twice last year, and in January 2023 the Maricopa County Superior Court upheld the Commission’s decision to deny the project. SRP is now proposing substantial changes to the project, including changes to the number of gas turbines and the location of those turbines. These changes require new evidentiary hearings at the ACC so that all parties can understand the revised project’s impacts and the Commission can evaluate SRP’s need for the project and determine whether the project is in the public interest. The full details of what SRP is proposing, including the actual settlement it is proposing, have not been made public, so the public and the Commission cannot accurately evaluate the impacts. Former Commissioner Sandra Kennedy spoke in-person during the meeting to ask the Commission to reject the proposal, and underscored that the project would still adversely impact communities of color.

In 2021, the ACC found that APS had imprudently spent $215.5 million dollars on upgrades at its Four Corners plant despite overwhelming evidence that APS knew or should have known that these investments were imprudent when they were made, forcing customers who can’t choose an alternative utility service to pay for its imprudence despite cheaper alternative resource options. Last March, the Court of Appeals directed the Commission to further investigate the prudency of the project, but today the Commission instead approved the entire cost, putting APS customers on the hook for APS’s decision, even though neither the Commission nor any Arizona court has found the project to have been in customers’ interest. APS customers will see a surcharge on their monthly bills as early as July 1. During the meeting, Commissioner Tovar was the sole no vote.

“What we’ve seen is that utilities will consistently act in their own interest as opposed to what is best for the public, manipulating established processes to get their way,” said Sandy Bahr, Director for the Sierra Club’s Grand Canyon Chapter. “Utilities like SRP and APS share little concern for what is actually in the public interest, and ratepayers end up on the hook, paying for their irresponsible actions. Today’s decisions are a blow for Arizona’s communities who trust the ACC to act in their benefit, to our air quality, and to the climate.”

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