APS EPS Proposals

1
APS EPS Proposals

• Presented to the Arizona Corporation Commission
• June 25, 2004

2
APS Objectives

• Create a broader and more flexible EPS program
• Promote renewable resources in Arizona
• Ensure funding is adequate to achieve expanded
  EPS goals

3
APS Renewable Program

• 2004 Renewable Portfolio
• 4.9 MW Solar
• 3 MW Biomass
• Contract Renewables
• 15 MW Wind
• 12 MW Biogas

4
ACC and APS Proposal Overview

• Current Program
• 1.1 goal by 2012
• 60 solar electric and 40 other
• APS Proposal 1
• 5 goal by 2015
• APS Proposal 2
• 3.5 goal by 2015
• 5M annual set aside for distributed solar

5
Current 1.1 by 2007 - 2012

• Estimated energy required to meet goal is 288,000
  MWh in 2007 and 338,000 MWh in 2012
• 101,000 MWh solar (w/2X multiplier)
• 126,000 MWh other
• Required Funding
• 80 M per year through 2007, or
• 28 M per year through 2012

6
APS Proposal 1 5 Goal by 2015

• Issue RFPs for least-cost renewable energy with
  in-state preference
• No specified technology mix
• Commission approval for long-term contracts (gt 5
  years)
• Maintains solar 2X multiplier
• Achieves 1.7 M MWh
• Funding requirement of 20 M per year

7
APS Proposal 23.5 Goal by 2015

• Same basic elements as 5 proposal
• Set-aside of 5 M per year for distributed
  renewables with focus on distributed solar
• Solar PV
• Solar Thermal
• Other customer-sited as approved by the
  Commission
• Achieves 1.2 M MWh
• Funding requirement of 20M per year

8
EPS Options Comparison

• Estimates of energy and costs illustrate
  differences in potential EPS requirements
• Costs are estimates based on APS experience or as
  reported/proposed for renewable energy PPAs in
  the western US
• Actual costs may vary considerably due to actual
  market conditions, technological changes,
  inflation and many other factors

9
Additional Details

• Continue with current projects contracts
• Renewables broadly defined and approved by the
  Commission
• Assumes continued availability of PPAs with above
  market premium of 13/MWh or less
• Allows use of funds for renewables (e.g. solar)
  until low-cost PPAs are available

10
RFP Objectives

• Least-cost renewables
• In-state preference
• Includes PPAs, EPS Credits (green tags), asset
  purchases, new construction
• Broad industry and public notice
• Commission approval for gt 5 year commitment

11
APS Summary

• Create a broader and more flexible EPS program
• Estimated funding of 20M annually
• Increase the EPS to 5 or 3.5
• 5 with lowest cost resources
• 3.5 with 5M annually for distributed
  technologies
• Create a flexible funding mechanism that can be
  increased or decreased as necessary to meet EPS
  goals