Arizona Public Service's Application for a Certificate of Environmental Compatibility ("CEC") regarding the Ocotillo Power Plant

Arizona Public Service ("APS") filed its application for a CEC to install additional generation comprised of five net 102 MW gas turbines, including two 230-kilovolt generation interconnections and other ancillary facilities.  The project will be located entirely within the bounds of the existing Ocotillo Power Plant in Tempe, Arizona.

Every utility planning to construct a plant or transmission line in Arizona must file with the Arizona Corporation Commission ("ACC") an application for a CEC.  The matter is heard first by a line siting committee who then makes a recommendation to the ACC.  The ACC must approve the Application before the plant or transmission line is built.

RUCO intervened - RUCO argued that APS should consider resource options that do not cost as much as what APS proposed and were friendlier to the environment.  RUCO argued that such alternative resource options including energy storage may mitigate the potential for over-generation.  RUCO further questioned the criteria that APS used in coming up with its proposal.

Prior to the conclusion of the hearing held in this matter, APS and RUCO came to an agreement on how the case should be resolved.  APS and RUCO later formalized a Memorandum of Understanding ("MOU") which, among other things RUCO would support APS' Application.  APS agreed that prior to building or procuring a generation resource between 2015 and 2021, APS would conduct a controlled independently monitored RFP that would include consideration of all sources/alternatives in its resource procurement process.  APS further agreed that if a new simple-cycle combustion turbine is proposed to be in service before 2021 at least 10% of the capacity will be competitively procured energy storage.  APS will also use a competitive RFP process for a single or multiple storage projects totaling 10 MWhs to be in service by the end of 2018.

The ACC chose not to include the MOU in its final decision.  Nonetheless, RUCO will seek to include it in the upcoming Integrated Resource Process ("IRP").  Moving forward, the MOU shows both RUCO and APS' commitment to consider more environmentally friendly alternatives than fossil fuels to meet resource needs.