APS walks back commitment to reach 100% clean energy by 2050

Arizona’s largest electric utility is getting rid of clean energy goals the company committed to just a few years ago.

In 2020, Arizona Public Service committed to obtaining 65% of its energy from “clean” sources by 2030, with 45% of its power generation coming from renewable sources, like solar and wind.

By 2050, APS officials said the utility would use 100% clean energy, or sources of electricity that do not produce greenhouse gases, which includes nuclear.

That all changed this week.

On a quarterly call with investors, APS CEO Ted Geisler said the utility is getting rid of those targets as it announced new investments in natural gas.

Today, Arizona as a whole gets about 54% of its electricity generation from clean sources and around 30% from renewable sources, according to the U.S. Energy Information Administration.

What drove the change?

On the investor call, Geisler said APS made the changes to ensure reliable service for customers “as Arizona continues to grow at unprecedented levels.”

Critics say the change in policy sends a bad message to Arizonans.

“Having the goals in place was important because it indicated to APS rate payers, the investors and the public at large that the utility had a commitment to doing something to reduce emissions that contribute to climate change and to get more and more of its electricity from renewable energy sources,” said Sandy Bahr, director of the Sierra Club's Grand Canyon Chapter.

APS officials did not agree to an interview for this story, but others who support the change argued it is needed to adapt to supply Arizona with the electricity needed to meet a growth in both population and energy-intensive industries like data centers.

Republican Kevin Thompson, who chairs the Arizona Corporation Commission that regulates utilities like APS, said the old clean energy goals were outdated.

“They were made at a time during a different commission that don't really reflect Arizona's current challenges, which is why I don't think politics should be involved in setting these arbitrary goals, like what APS has set,” Thompson said.

Thompson said renewable sources like solar should continue to be part of APS’ larger energy portfolio.

“But I think the idea that you can meet the needs of tomorrow without reliable generation is just irresponsible, and I think the utilities are seeing that now,” he said.

Thompson said the grid needs sources of energy like natural gas to provide that reliability.

“And I think it's a fallacy to think that renewables are the answer, end all be all,” he said. “I think you have to have that baseload, reliable, dispatchable generation.”

APS is also extending the life of its Four Corners Coal plant.

But Mike Philipsen, an APS spokesman, said APS now plans to get out of coal “no later than 2038.”

That contradicts the company’s previous commitment to close the plant by 2031.

And critics say it goes against comments APS officials made last year as they successfully lobbied for a new state law they said was needed to finance the move away from coal.

“APS fought tooth and nail for a securitization tool they clearly do not intend to use,” said Autumn Johnson, executive director of the Arizona Solar Energy Industries Association. “They are signaling not just delay, but abandonment of the entire transition.”

What’s the best mix?

But renewable energy advocates reject the argument that the energy can’t be dispatchable, which refers to sources that can be turned on and off to meet fluctuating demand.

Johnson said the state could accomplish this by increasing all types of renewable and clean energy sources, including solar and wind, while investigating emerging technologies in nuclear and battery storage.

That would help further diversify the state’s grid, which currently gets about half of its electricity from natural gas.

“So I don't think anybody is talking about just having one resource. I think we're talking about dividing up the pie a little bit more equally,” Johnson said.

Bahr, the Sierra Club director in Arizona, said that could be good for ratepayers, too.

“I care deeply about the air pollution, the water pollution, how much water they use, and climate change, but these coal plants are bad for ratepayers,” Bahr said. “And no one has to take my word for that on that — they can look at APS own numbers.”

Some studies have shown that renewable energy farms in the U.S. are much more economical than coal plants, the Guardian reported.

Thompson said at least some of that economic viability was driven by federal subsidies under the Biden administration, which Trump is rolling back, supporting solar and other clean energies.

“There was this huge influx of cash into the renewable arena and really kind of pushed those over the limit of really making them affordable,” Thompson said.

Thompson did acknowledge most energy generation projects receive subsidies in one form or another.

And financial services firm Lazard recently found that wind and solar “remain the most cost-effective forms of new-build energy generation on an unsubsidized basis.”

Politics

Bahr argued it is politics, not grid reliability, that drove APS’ decision.

“I feel like this decision is political, and taking advantage, again, of a time when the Trump administration is trying to roll back all of the protections that we have relative to climate,” Bahr said.

She pointed to President Donald Trump’s well-known dislike for renewables and executive orders designed to boost the domestic coal industry.

Bahr claimed that’s why APS decided to keep Four Corners online, though the utility gave a different explanation.

“In short, coal is an important part of our balanced energy mix today, and we will not exit it any earlier than is in the best interests of our customers to ensure reliable service at the lowest cost possible,” Philipsen, the APS spokesman, said. “It’s also worth noting that coal is an important economic engine for the Navajo Nation, which has an ownership interest in the plant.”

Bahr claimed that Arizona’s utility regulators are too deferential to utilities.

She pointed out that APS is removing its clean energy goals even though it included them in past resource planning documents filed with regulators on the Corporation Commission.

The all-Republican Corporation Commission is preparing to finalize its own policy change to remove a rule that requires Arizona utilities to use 15% renewable energy by 2026.

Thompson, who has vocally supported Trump’s energy agenda, denied Bahr’s claims.

“We shouldn't be injecting politics into keeping the grid reliable and affordable,” he said.

What’s next

According to APS, it is jettisoning its plan to go 100% clean by 2050 in favor of adopting “an aspirational ‘carbon-neutral’ approach by 2050.” Unlike the commitment to use 100% clean energy, a carbon-neutral pledge means a company will attempt to offset its emissions.

Companies with carbon-neutral policies can use technologies that remove carbon dioxide from the atmosphere or pay for “carbon credits,” which allow companies to essentially pay for offsets by investing in things like reforestation efforts that are supposed to pull carbon dioxide out of the atmosphere.

But some of those programs have come under fire from critics who say they are misleading or ineffective, according to NPR.