Pinnacle West, the parent company of APS, reported record retail sales on its Aug. 4 earnings call. But it says overall profits are down $14 million due to debt and depreciations on its power plant and transmission assets.
The company says data centers and semiconductor manufacturers, like TSMC, made up about half of all new retail sales. These large loads are also driving the need to double generating capacity at APS within the next few years, which could add to existing construction and operational debts.
Ted Geisler, CEO of APS, mentioned that the company will be filing an Integrated Resource Plan in October which “will include in the forecast all committed customer growth. That will include the full intended buildout of TSMC.”
“We continue to work with TSMC on what their announcement means in terms of timing of that capacity addition,” Geisler said.
APS has 8.6 gigawatts of existing capacity. It expects to commit to another 4.6 gigawatts, which will require significant building out of its natural gas infrastructure, Palo Verde nuclear generating station and transmission system.
APS says TSMC is committed to building 12 facilities at its chip manufacturing plant in north Phoenix and that every $100 billion invested represents roughly 1 gigawatt of energy demand. TSMC’s total commitment has reached $265 billion so far.
“We’re committed to be able to meet their needs and be able to serve them, but we’re refining with them now on timing expectations, facilities needed to be able to support it, and what the full buildout means in terms of electric demand,” Geisler said.
Andrew Cooper, chief financial officer of Pinnacle West, told investors that the spring’s warm temperatures drove higher energy sales, which helped offset some profit losses tied to debts from generation and transmission.
“Weather was a benefit during the quarter. The early start to triple-digit temperatures in the valley and higher average temperatures each month of the quarter compared to the same period last year contributed to increased cooling demand,” Cooper said.
The call also provided a brief update and timeline for a potential decision from the Arizona Corporation Commission on APS’s proposed 14% rate increase.
“We’re very pleased with how the hearing wrapped up,” Geisler said. “We have strong evidence on the record for supporting our positions, supporting the need to be able to address regulatory lag and come up with a sustainable cost recovery framework going forward.”
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