After President Donald Trump called for the re-opening of Arizona’s first coal power plant, the state’s top utility regulator said bringing the facility back online would cost nearly $2 billion.
Arizona Public Service, Arizona’s largest electric utility, ended operations at Cholla Power Plant in March, APS executives told the Arizona Corporation Commission.
Republican state lawmakers – and the Trump administration – then made public calls to re-open the plant.
“The federal government turned its back on towns like Joseph City and Page, forcing needless closures through bureaucratic red tape and overregulation,” Rep. David Marshall (R-Snowflake) said in a statement. “Now, we have a President and an administration that understands the importance of reliable baseload power and rural communities. We’re ready to work with them to turn the lights back on.”
Marshall, who represents the area that includes the Cholla plant, sent a letter to Department of Interior Secretary Doug Burgum on April 8 along with dozens of other Republican lawmakers urging him to bring retired coal plants back on line.
That came on the same day Trump signed a slew of executive orders aimed at boosting the U.S. coal industry, and said he told Energy Secretary Chris Wright “to save the Cholla Coal Plant in Arizona.”
But not all Arizona Republicans think that’s a good idea.
“Continued calls from certain elected officials to reopen Cholla does nothing more than promote financially reckless solutions that would burden APS ratepayers with nearly $2 billion dollars in additional costs,” said Kevin Thompson, chairman of the Arizona Corporation Commission, which regulates public utilities.
Thompson stopped short of criticizing the president. He praised “Trump’s Energy-Dominance Agenda,” but argued re-opening Cholla was not cost-effective, estimating it would cost $1.9 billion to upgrade the facility to comply with federal regulations.
“This administration understands that the costs to re-open Cholla would be staggering and an unfair burden to Arizona ratepayers,” Thompson said. “In addition to the cost to maintain the units and the equipment, the Regional Haze Rules put in place by the Obama EPA plays a major role in limiting operations and is exactly why the Navajo Generating Plant was closed in 2019.”
Jeff Allmon, an APS attorney, told commissioners in April that the Cholla Plant required costly upgrades to reduce pollution in order to comply with those rules. He didn’t provide an estimated cost at the time.
“The investments that would need to be made, in particular the add-on pollution controls and the additional expenses to essentially bring the plan up to a place where it can be reliable for longer term operations, we know that would be significant,” Allmon said.
Those federal requirements were supposed to go into effect in 2017, but Allmon said the Environmental Protection Agency approved a compromise allowing Cholla to remain open without the upgrades as long as APS closed the coal plant by this year.
APS is not completely dismantling the Cholla plant.
Allmon told regulators APS is exploring the possibility of converting the plant to another use, such as gas or nuclear generation, in the future – something both Thompson and Commission Vice Chair Nick Myers, also a Republican, said they support.
“And so while I will tell you all options are on the table, including gas, the nuclear generation option is really the one that we think offers the most promise long term for our customers,” Allmon said.
But Republicans who have criticized the Cholla closure said Arizona needs every available source of energy now to meet growing demand.
“We believe supporting these plants is necessary to achieve energy security and promote economic prosperity in our state and nationwide,” Marshall and the other lawmakers wrote in the letter to Burgum.
Tim Russert, director of power supply services, told the Corporation Commission that the utility is seeing an increase in demand, especially in the summer months. He said the company’s “peak load” – or the most power demand it saw in a single day – in 2022 was 7,600 megawatts. Last summer, APS had 29 days with loads above 7,500 megawatts.
APS forecasts its peak demand will reach nearly 8,500 megawatts this year, though Allmon told regulators that the utility has the capacity to meet that demand this summer.
Thompson said he has met with the White House to discuss “cost-effective ways to preserve existing coal plants serving Arizona.”
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