APS 2011 Annual Report Download - page 35

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Future Resources and Resource Plan
Under the ACC’s resource planning rule, APS will file by April 1st of each even year its
resource plans for the next fifteen-year period. The first resource plan filing will be due by April 1,
2012. The rule requires the ACC to issue an order with its acknowledgment of APS’s resource plan
within approximately ten months following its submittal. The ACC’s acknowledgment of APS’s
resource plan will consider factors such as the total cost of electric energy services, demand
management, analysis of supply-side options, system reliability and risk management.
Renewable Energy Standard
In 2006, the ACC adopted the RES. Under the RES, electric utilities that are regulated by the
ACC must supply an increasing percentage of their retail electric energy sales from eligible renewable
resources, including solar, wind, biomass, biogas and geothermal technologies. The renewable energy
requirement is 3.5% of retail electric sales in 2012 and increases annually until it reaches 15% in 2025.
In APS’s 2009 retail rate case settlement agreement, APS committed to have 1,700 GWh of new
renewable resources in service by year-end 2015 in addition to its 2008 renewable resource
commitments. Taken together, APS’s commitment is estimated to be 3,400 GWh, or approximately
10% of retail sales, by year-end 2015, which is double the existing RES target of 5% for that year. A
component of the RES is focused on stimulating development of distributed energy systems (generally
speaking, small-scale renewable technologies that are located on customers’ properties). Accordingly,
under the RES, an increasing percentage of that requirement must be supplied from distributed energy
resources. This distributed energy requirement is 30% of the overall RES requirement of 3.5% in
2012. The following table summarizes these requirement standards and their timing:
2012 2015 2020 2025
RES as a % of retail electric sales 3.5% 5% 10% 15%
Percent of RES to be supplied from distributed
energy resources 30% 30% 30% 30%
Renewable Energy Portfolio. To date, APS has a diverse portfolio of existing and planned
renewable resources totaling 946 MW, including wind, geothermal, solar, biomass and biogas. Of this
portfolio, 423 MW are currently in operation and 523 MW are under contract for development or are
under construction. Renewable resources in operation include 55 MW of facilities owned by APS, 232
MW of long-term purchased power agreements, and an estimated 136 MW of customer-sited, third-
party owned distributed energy resources.
APS’s strategy to achieve its RES requirements includes executing purchased power contracts
for new facilities, ongoing development of distributed energy resources and procurement of new
facilities to be owned by APS. APS continues to develop owned solar resources through the AZ Sun
Program. The AZ Sun Program allows APS to own up to 200 MW of solar photovoltaic power plants
across Arizona by investing up to $975 million through 2015. Under this program to date, APS has
executed contracts for the development of 83 MW of new solar generation, representing an investment
commitment of approximately $375 million. See Note 3 for additional details about the AZ Sun
Program, including the related cost recovery.