Phoenix, Ariz. - Arizona Corporation Commission Chair Kevin Thompson is providing additional information related to continued calls from state elected individuals and special interest groups to re-open the Cholla Power Plant, a coal-fired generation plant in northern Arizona.  Operations at Cholla ceased in March of this year after more than six decades of delivering energy to Arizona communities.  

President Trump’s coal plant Executive Order wisely allows certain plants to comply with a less stringent version of Obama-era EPA standards, but the Clean Air Act still legally prohibits non-compliant coal-fired operations for plants like Cholla. The utility negotiated the closure with the Obama EPA to avoid costly lawsuits, and were directed to close the plant on or before April 30, 2025. The cost to bring the plant into compliance and to reinstate full operations would be a staggering $1.9 Billion. This includes the installation of costly selective catalytic reduction equipment (SCR’s) as well as much needed plant maintenance costs. The $1.9 billion price tag would become the burden of Arizona Public Service ratepayers.  

“Managing highly intricate systems like our electrical grid is far more complicated than a slogan on a bumper sticker. Continued calls from certain elected officials to reopen Cholla does nothing more than promote financially reckless solutions that would burden APS ratepayers with nearly $2 Billion dollars in additional costs. This demonstrates just how far they are removed from the realities of ratemaking,” said Chair Thompson. "This Commission is supportive of President Trump’s Energy-Dominance Agenda and will continue to be a national leader in promoting a reliable energy balance that protects Arizona ratepayers, while identifying solutions with federal partners that secures the shared goal of reinforcing and strengthening the stability of our electric grid.”  

Before the Cholla plant ceased operations in March, both Chair Thompson and Commissioner Rachel Walden met with members from the Secretary of Interior’s Office to outline the exorbitant cost that would be placed on APS ratepayers in order to return the plant to operational status. The existing units at Cholla did not meet EPA standards and had not been updated with the SCR's required to reduce emissions to meet EPA standards. The remaining coal-fired plants that continue to serve Arizona communities today have the necessary equipment and currently meet EPA standards. Additionally, since APS was required to close Cholla, it deferred the necessary plant maintenance and upgrades that would be required to otherwise keep the plant operating at a safe and reliable level for the foreseeable future. 

Recently, Chair Thompson met with members of the White House to discuss the need to keep existing coal-fired plants open to support the President’s Executive Order. “This Administration understands that the costs to re-open Cholla would be staggering and an unfair burden to Arizona ratepayers. In addition to the cost to maintain the units and the equipment, the Regional Haze Rules put in place by the Obama EPA plays a major role in limiting operations and is exactly why the Navajo Generating Plant was closed in 2019,” Chair Thompson said. 

Chair Thompson’s strategic conversations with President Trump’s Administration have explored ways to partner with the federal government to preserve the remaining coal plants serving Arizona and to identify long-term solutions that will produce reliable and cost-effective power for Arizona utility customers well into the future. Potential solutions could include: 

• Opportunities to support existing coal-generation operations beyond 2031, along with expanded power generation opportunities (including federal investment), at or near Four Corners Power Plant; 
• Utilizing existing, valuable infrastructure at the recently retired Cholla Power Plant, including solutions for natural gas re-powering in the near-term, along with providing a site to support new nuclear generation over the long-term; and 
• Expanding the capacity of critical regional natural gas pipelines into Arizona, which is desperately needed to fuel the dispatchable generation essential to ensuring a resilient, reliable, and stable electric grid in Arizona. 
  

“My requests to this administration have been to help with the environmental and mining regulations that have driven the cost of coal to a point where it can no longer compete with the much cheaper natural gas alternative,” Thompson continued. “The levelized cost of energy generated at Cholla Power Plant around the time of closure was already nearly double that compared to a new natural gas power plant for the same dispatchable generation capacity. Additionally, we are discussing cost-effective ways to preserve existing coal plants serving Arizona.” 

“Even if we succeed in making the necessary EPA changes to keep coal plants cost-effective for Arizona ratepayers—and are able to keep those plants operational—the state’s rapid load growth means we will still need additional natural gas to support future power generation,” said Vice Chair Nick Myers. “Natural gas, along with the development of new, advanced nuclear technologies, will ensure Arizona remains a leader in energy production for generations to come.” 

Vice Chair Myers opened a Docket in February of this year to explore natural gas expansion in Arizona. The pipelines bringing natural gas into Arizona are fully subscribed, which means there is not much room to build new combined cycle, RICE units, or peaker plants to meet future demand. 

Vice Chair Myers, along with Commissioner Rene Lopez, are also currently holding a series of workshops to advance new nuclear technologies here in Arizona, which has already garnered both positive public interest and potential partnerships. 

The Corporation Commission has approved several new natural gas generation plants, recently, that are currently under construction to address any short term generation capacity gaps as a result of  the closure of Cholla.