Arizona Public Service plans to convert part of its Cholla coal plant in Navajo County to natural gas.
The plant stopped producing power last year after APS said federal regulations and rising costs made it too expensive to run.
At the time, Arizona Corporation Commissioner Kevin Thompson said it would have cost about $2 billion to upgrade the 60-year-old plant to continue running on coal.
Thompson welcomed the announcement Thursday, saying it will help with grid reliability.
APS has not said how much the conversion to natural gas will cost, but the utility says it will be able to power about 60,000 homes by 2029.
The corporation commission approved the conversion of two other coal plants to natural gas earlier this year.
Full statement from Arizona Corporation Commissioner Kevin Thompson
"The estimated $1.9 billion price tag needed to restart Cholla as a coal plant was economically infeasible and an unfair burden to ratepayers.
"Converting Cholla and bringing it back online as a dispatchable generating site is an important step to affordably enhance long term grid reliability. Earlier this year the Commission approved the conversions of both Springerville and Coronado Generating Stations from coal to natural gas.
"The existing infrastructure at plants like Cholla, Springerville, and Coronado have always made these sites ideal for conversion or repurpose, whether that be advanced nuclear technology or in this case natural gas.
"To protect ratepayers, I offered an amendment in 2024 while considering APS’ latest Integrated Resource Plan to address the generation gap. The amendment required APS to replace any future lost generation at the Four Corners coal plant to be replaced with similar reliable and dispatchable generation.
"More recently, Chair Nick Myers joined me in encouraging APS to consider the priorities of this Commission with decisions like Coronado and Springerville as they contemplated the future of Cholla. We encouraged the company to hold true to their public commitments to prioritize reliability and affordability amidst our unprecedented period of rapid growth and increased demand.
"There's still a lot of work to do, and I will evaluate future filings with an open mind with a focus on reliability and affordability. But it's important to remember it wasn't that long ago that a Republican-controlled Commission essentially implemented a natural-gas moratorium. I'm proud of this Commission's commitment to put politics aside and do what's right for the reliability of our grid and for ratepayers."
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