Tucson Electric Power has secured use of an efficient, low-cost, natural gas power plant that will diversify the company’s energy portfolio and support efforts to deliver at least 30 percent of TEP’s power from renewable resources by 2030.
Through an agreement with Salt River Project, TEP will purchase the output of Unit 2 at the gas-fired Gila River Power Station near Gila Bend, according to a news release.
TEP, which already shares ownership of Gila River Unit 3, also secured an option to purchase Unit 2 from SRP, which is acquiring Units 1 and 2 at the plant.
SRP’s acquisition of Gila River Unit 2 is expected to be finalized by early 2018, the news release said.
“This modern, low-cost natural gas resource will help us maintain affordable, reliable service for customers as we reduce our reliance on coal-fired generating resources and build a more balanced and flexible resource portfolio,” said TEP President and CEO David G. Hutchens.
Energy from Gila River will help TEP offset the potential loss of 508 MW of coal-fired resources, including 170 MW at Unit 2 at the San Juan Generating Station in New Mexico, which will close at the end of this year; 170 MW at San Juan Unit 1, which TEP does not anticipate using beyond the June 2022 expiration of its coal supply contract; and 168 MW at the Navajo Generating Station, which will operate through December 2019.
Unlike coal-fired power plants, the combined cycle gas-fired units at Gila River can efficiently increase and decrease their energy output to accommodate the variable production of solar and wind resources.
TEP already provides more than 11 percent of its power from renewable resources.
The goal to deliver at least 30 percent of the company’s power by 2030 is more than twice the level required by 2025 under Arizona’s Renewable Energy Standard.