Arizona's Brutal Summer Fuels $3+ Billion in Near-Term Power Projects

The heat wave gripping much of the U.S. has been particularly brutal in Arizona, where Arizona Public Service Company (Phoenix, Arizona) reported a record daily demand from its customers of 8,193 megawatts (MW) on July 20. With tens of millions of Americans now used to seeing excessive heat warnings, states like Arizona are trying to determine how to address these problems in the longer term, as more summers like this are likely. Industrial Info is tracking nearly $1.3 billion worth of power-generation projects under construction in Arizona, with another $1.8 billion set to begin construction before the end of the year.

Phoenix has seen a full month of daily temperatures averaging more than 110 degrees Fahrenheit, shattering the 18-day record set in 1974. NextEra Energy Incorporated (NYSE:NEE) (Juno Beach, Florida) is developing major solar projects in the surrounding area, one of which--a $100 million unit addition at the Saint Solar Park in Coolidge--is set to wrap up this summer. The 100-MW project will be followed by NextEra's $300 million Sonoran Energy Center in Buckeye, which is set to generate 250 MW when it finishes construction, which is expected toward the end of the year.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can read detailed reports on the Saint Solar and Sonoran projects.

Arizona Public Service, the largest electric utility in Arizona and the principal subsidiary of Pinnacle West Capital Corporation (NYSE:PNW) (Phoenix) insists it has the power supply to serve its customers and the state's electricity system is stable. But this is unlikely to be the last heat wave the southwestern U.S. will see; climate analysts expect to see summer temperatures just as strong--if not stronger--in years to come. Heavily populated areas like Phoenix likely will depend more on battery energy-storage system (BESS) technology to keep the power grid juiced. Strata Clean Energy LLC (Durham, North Carolina) is responding with the $500 million Scatter Wash BESS in Phoenix, which is expected to begin construction in the fourth quarter.

Scatter Wash will use Tesla Incorporated's (NASDAQ:TSLA) (Austin, Texas) Megapack lithium-ion batteries to power what the two companies are calling one of the largest BESS projects in the world. The project was all but guaranteed when Strata signed a 20-year tolling agreement with Arizona Public Service in May. Subscribers can learn more from a detailed project report.

Tucson saw daily temperatures of 110 degrees or more for eight days in a row in late July, surpassing its previous record in 2021. Just north of the city, NextEra is building the $100 million Storey Energy Center in Red Rock, which is set to generate 88 MW when it wraps up at the end of the year. Subscribers can learn more from a detailed project report.

Arizona ranks second in the U.S. in solar-energy potential, after Nevada, and it was fifth in solar-powered net generation in 2022, according to the U.S. Energy Information Administration (EIA). But natural gas still accounted for 42% of the state's energy mix last year, and Salt River Project (Tempe, Arizona), the state's second-largest utility, is preparing for a series of uprates at its gas-fired plants to improve efficiency and extend service lives. These include units 5 through 8 at the Gila River Power Station in Gila Bend, each of which generates 174 MW, and Block 6 at the Santan Generating Station in Gilbert, which generates 289 MW. Subscribers can read detailed reports on Gila River units 5 and 6, units 7 and 8, and the Santan station.

As record temperatures loomed in mid-July, Salt River Project's director of supply, trading and fuels, Pam Syrjala, told a local news station the utility had been planning for a hotter-than-normal summer: "This is the time of the year that we do all of our planning and preparations, so we are prepared to meet the high loads... So, if a generator is unexpectedly unavailable or the load forecast changes, we have sufficient resources that we can rely upon."

Subscribers to Industrial Info's GMI project and plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of reports for power-generation projects under construction in Arizona, and click here for a full list of reports for projects set to begin construction before the end of the year.