APS 2011 Annual Report Download - page 34

10
Purchased Power Contracts
In addition to its own available generating capacity, APS purchases electricity under various
arrangements, including long-term contracts and purchases through short-term markets to supplement
its owned or leased generation and hedge its energy requirements. A substantial portion of APS’s
purchased power expense is netted against wholesale sales on the Consolidated Statements of Income.
(See Note 18.) APS continually assesses its need for additional capacity resources to assure system
reliability.
Purchased Power Capacity – APS’s purchased power capacity under long-term contracts,
including its renewable energy portfolio, is summarized in the tables below. All capacity values are
based on net capacity unless otherwise noted.
T
yp
e Dates Available Ca
p
acit
y
(MW)
Purchase A
g
reement
(
a
)
Yea
r
-round throu
g
h December 2014 104
Purchase A
g
reement
(
b
)
Yea
r
-round throu
g
h June 14, 2020 60
Exchange Agreement (c) May 15 to September 15 annually
throu
g
h 2020 480
Tollin
g
A
g
reement Yea
r
-round throu
g
h Ma
y
2017 500
Tollin
g
A
g
reement Summer seasons throu
g
h October 2019 560
Day-Ahead Call Option
A
g
reemen
t
Summer seasons through September
2015 500
Day-Ahead Call
O
p
tion A
g
reement Summer seasons throu
g
h summer 2016 150
Demand Response
A
g
reemen
t
(
d
)
Summer seasons throu
g
h 2024 100
Renewable Ener
gy
(
e
)
Various 232
(a) The capacity under this agreement varies by month, with a maximum capacity of 104 MW.
(b) Up to 60 MW of capacity is available; however, the amount of electricity available to APS
under this agreement is based in large part on customer demand and is adjusted annually.
(c) This is a seasonal capacity exchange agreement under which APS receives electricity during
the summer peak season (from May 15 to September 15) and APS returns a like amount of
electricity during the winter season (from October 15 to February 15).
(d) The capacity under this agreement increases in phases over the first three years to reach the 100
MW level by the summer of 2012.
(e) Renewable energy purchased power agreements are described in detail below under “Current
and Future Resources – Renewable Energy Standard – Renewable Energy Portfolio.”
Current and Future Resources
Current Demand and Reserve Margin
Electric power demand is generally seasonal. In Arizona, demand for power peaks during the
hot summer months. APS’s 2011 peak one-hour demand on its electric system was recorded on
August 24, 2011 at 7,087 MW, compared to the 2010 peak of 6,936 MW recorded on July 15, 2010.
APS’s operable generating capacity, together with purchased power capacity, resulted in an actual
reserve margin at the time of the 2011 peak demand of 28.7%. The power actually available to APS
from its resources fluctuates from time to time due in part to planned and unplanned plant and
transmission outages.