APS 2011 Annual Report Download - page 29

5
Energy Sources and Resource Planning
To serve its customers, APS obtains power through its various generation stations and through
purchased power agreements. Resource planning is an important function necessary to meet Arizona’s
future energy needs. APS’s sources of energy by fuel type during 2011 were as follows:
Generation Facilities
APS has ownership interests in or leases the coal, nuclear, gas, oil and solar generating
facilities described below. For additional information regarding these facilities, see Item 2.
Coal Fueled Generating Facilities
Four Corners – Four Corners is a 5-unit coal-fired power plant located in the northwestern
corner of New Mexico. APS operates the plant and owns 100% of Four Corners Units 1, 2 and 3 and
15% of Units 4 and 5. APS has a total entitlement from Four Corners of 791 MW. The Four Corners
plant site is leased from the Navajo Nation and is also subject to an easement from the federal
government. APS purchases all of Four Corners’ coal requirements from a supplier with a long-term
lease of coal reserves with the Navajo Nation. The Four Corners coal contract runs through 2016.
On November 8, 2010, APS and SCE entered into an asset purchase agreement providing for
the purchase by APS of SCE’s 48% interest in each of Units 4 and 5 of Four Corners. If consummated,
APS would acquire 739 MW from SCE. Completion of the purchase by APS, which is expected to
occur in the second half of 2012, is conditioned upon the receipt of regulatory approvals from the
ACC, the California Public Utilities Commission and the FERC, the execution of a new coal supply
contract, expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and
other typical closing conditions.
APS, on behalf of the Four Corners participants, has negotiated amendments to an existing
facility lease with the Navajo Nation which would extend the term of the Four Corners leasehold
Coal
36.7%
Nuclear
27.2%
PurchasedPower
19.0%
Gas,Oil&
Other17.1%