A major feature of the Arizona Public Service near-term action plan is a modernization project at the existing, gas-fired Ocotillo power plant.
Ocotillo’s central location in the Phoenix Metro area and proximity to customer demand is ideal for placement of flexible generation on the transmission system, the utility said in an integrated resource plan issued on April 1. In 2016, APS plans to begin construction on this project, which consists of replacing two 1960s-era steam generators with five quick-start natural gas combustion turbine units with capacities of 102 MW each. Scheduled to begin commercial operation in 2018, the Ocotillo Modernization Project will provide cleaner, more efficient megawatt-hours, maintain grid reliability and add beneficial operational flexibility.
Permitting and regulatory filings for this project are planned for 2014.
Ocotillo is currently a four-unit gas plant. The modernization project will cost $600m-$700m, which will involve retiring two older 110 MW steam units, adding the five 102-MW combustion turbines and maintaining two existing 55 MW combustion turbines. In total, this will increase the capacity of the site by 290 MW, to 620 MW. The plant is owned and operated by APS.
By 2018, the utility’s load is projected to grow almost 1,100 MW while resources to meet that growth will decline largely due to the expiration of just under 1,400 MW in purchased power contracts. The combination of these circumstances will have a significant impact on the portfolio. By 2017, APS anticipates a need to add 360 MW of additional capacity. This need is anticipated to grow to over 700 MW by 2018. To fill the gap, APS plans to utilize a combination of market-based solutions, along with highly flexible generating capacity at Ocotillo. These needs are in addition to resource contributions anticipated from the Energy Efficiency and Renewable Energy Standards.