Arizona Public Service to seek offers on 300 MW of peaking capacity

Arizona Public Service Co. (APS) said Jan. 21 that it will be issuing on Jan. 30 a request for proposal (RFP) for dispatchable capacity to meet peak demand.

The RFP will have a bid submittal deadline of March 18. APS is seeking approximately 300 MW of peaking capacity, which may be bid as a power purchase agreement or a build, own and transfer structure. Proposals must demonstrate that projects can achieve commercial operation by the summer of 2018 or 2019. The RFP process will be monitored and reviewed by a third-party independent monitor.

Proposals will be evaluated and compared to an APS self-build option to expand the existing Ocotillo Power Plant site located in Tempe, Arizona.

APS added that it expects to issue a second RFP in 2016. This “all-source” RFP will seek proposals to meet APS’s capacity and energy needs starting in 2019 or 2020.

APS in October 2014 submitted to the Federal Energy Regulatory Commission a change in status report relating to the market-based rate authority of APS due to plans to add new capacity at its Ocotillo plant. The Ocotillo Power Plant includes two existing steam turbine generators that began commercial operations in 1960. Due to age and higher maintenance costs for those generators, APS plans to add 595 MW of fast-start, fast-ramp capacity through the addition of five simple cycle combustion turbines. In addition, 220 MW of existing capacity would be retired by 2018. “Given the Ocotillo Power Plant’s key location on the APS transmission system, having reliable and flexible generation at that location is critical,” the utility told FERC.

APS had in November 2014 gotten an approval from the Arizona Corporation Commission for the Ocotillo Modernization Project. The utility applied in July 2014 at the state commission for approval of the power project itself and supporting transmission upgrades.

The existing power plant has two gas-fired steam turbines of 110 MW (net) each, and two gas turbines (GTs) of 55 MW (net) apiece. The plan is to tear out the old steam turbines, both of which went commercial in 1960, and replace them with five new GTs of 102 MW (net) each. The new plant capacity would be 620 MW (net), which includes retention of the two existing GTs. The first of the new GTs would be operational in the fall of 2017, with the others phased in as they are completed, with the last beginning operation in the summer of 2018. APS would begin tearing out the two old steam units in the fall of 2018.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.