Transforming Arizona’s Power Portfolio

Cooperatives’ most valuable resource, their people, help in the quest to diversify generation

By J.D. Wallace

On October 12, members and directors of Arizona electric cooperatives filled the room at the Arizona Corporation Commission open meeting in Phoenix. They spoke in support of a financing application for additional gas-fired generation units at Apache Generating Station during the public comment period. Arizona Generation and Transmission Cooperatives thanks everyone who showed their support.

As energy markets evolve and the demand for renewable power grows, Arizona Generation and Transmission Cooperatives (AEPCO) is taking innovative but responsible steps to address the changing landscape.

AEPCO, a power supplier for its member electric distribution cooperatives, is embarking on an action plan to develop new power resources to diversify its portfolio, improve reliability and flexibility, and to reduce its long-term carbon footprint. As a community-based, democratically controlled, not-for-profit provider of power, transmission, and energy services throughout rural Arizona, AEPCO’s transition plan is founded on its core mission: to provide reliable power and value-added services to member electric cooperatives and public power utilities—and the communities they serve—at the lowest possible cost.

“We exist to support our members and communities with the reliable, affordable power they need to thrive, and this plan will help us ensure we’re meeting their needs while also helping to enable a responsible clean energy transition in Arizona,” says Patrick Ledger, AEPCO’s executive vice president and CEO.

The first phase of AEPCO’s action plan focuses on an initiative at its existing power plant, Apache Generating Station, which opened in 1961 in Cochise, Arizona, about 90 minutes southeast of Tucson. AEPCO will develop flexible, efficient, quick-start natural gas units to help modernize its fleet for increasing renewable integration and to meet the requirements of evolving energy markets.

“Quick-start natural gas units are able to turn on and ramp up to full power in just five minutes, which means they can supplement solar power as clouds pass over,” says Christopher Jimenez, AEPCO’s director of energy services and resource planning.

AEPCO will also expand its renewable resource portfolio with a large photovoltaic solar installation with battery storage. These new resources will be sited at Apache Station as well, and AEPCO’s workforce will operate and maintain the new gas units and new solar and battery.

In addition to ensuring power will be available when co-op members need it, the new gas units will help reduce emissions over the long term, says Nathen Hatch, AEPCO’s director of generation engineering.

“The new gas units will have significantly lower emission rates than older gas units, and they can ramp up and down quickly and also support more renewables on our system,” Hatch says. “The new units will have selective catalytic reduction, or SCR, technology installed to limit the emissions while generating power during both regular operation and when we need to quickly ramp up or ramp down.”

The new gas units will also be capable of using clean hydrogen, a technology that isn’t ready yet for utility scale operation but shows enough promise that AEPCO is preparing for it in the future.

AEPCO plans to bring the gas units online in 2024 and the large solar and battery system on in 2025. Recent independent studies by the Western Electricity Coordinating Council and reputable energy consulting firms have shown beginning in the summer of 2024, the Southwest region runs the risk of power shortages, in part because coal plants are retiring off the power grid and are not being replaced with other resources fast enough to keep pace with increasing demand.

Because of increasing demand from neighboring states like California as well as population growth and new business development within Arizona, competition for additional power on the market has risen and has caused market prices to do the same. Adding both renewable resources, which provide fixed-price power, and super-efficient gas generation will reduce costs over the long term, thanks to improved efficiency and the ability to avoid high-cost market power purchases.

Outreach by AEPCO and electric distribution cooperatives in Arizona has shown that consumers who live in co-op service areas across the state understand the need to diversify AEPCO’s generation fleet.

Electric co-op consumers and community members have supported the effort by signing support cards and sending messages to the Arizona Corporation Commission through a special project website, The site educates visitors about the cooperatives’ long-term energy plan and provided them a platform to communicate their position on the plan to commissioners, who regulate utilities in the state.

“We’re grateful to all of the rural Arizonans who have taken the time to understand our energy plan and support our efforts,” Ledger says. “We’ll continue to engage our co-ops, which own and democratically direct AEPCO, and the consumer-members they serve as we work toward a reliable, clean, affordable energy future.”

A Reliable Energy Future

Arizona Electric Power Cooperative is embarking on an action plan to develop additional resources to power rural Arizona.

  • 45 megawatt (MW) solar and 100 MW/340 megawatt-hour (MWh) of battery storage projects in development.
  • New utility-scale renewable energy project expected from all-source request for proposal to be online before 2026.
  • Member plans for additional utility-scale solar/battery additions by 2026.
  • Member plans to implement demand response thermostat program.
  • 80 MW of flexible, efficient natural gas generation in development by 2025.
  • Additional flexible natural gas generation under consideration for 2026 for reliability and to increase to increase ability to integrate planned solar additions.