Tucson Electric Power (TEP) on Friday said it expanded its ownership in natural gas-fired generation from the Gila Band, AZ, complex through an agreement with Phoenix-based Salt River Project (SRP).
The additional gas-fired generation is designed to support the electric utility's efforts to develop at least 30% of its power from renewable resources by 2030, with the natural gas a key to balancing the grid with intermittent sources such as wind and solar.
The combined-cycle gas-fired units at Gila River accommodate the variable production of solar and wind, a spokesperson said. "That makes them a good fit for TEP, which already provides more than 11% of its power from renewables and is working its way toward an energy mix that includes 30% renewables by 2030, more than twice the level required by 2025 under Arizona's renewable energy standard."
TEP’s agreement with SRP is to purchase output of Unit 2 at the Gila River Power Station. SRP is in the process of acquiring units 1 and 2; TEP owns part of Unit 3.
The agreement supports ongoing efforts to cut back reliance on coal-fired generation, said CEO CEO David Hutchens. The gas-fired generation is designed to build "a more balanced and flexible resource portfolio" and help the utility maintain "affordable, reliable service" for customers.
TEP is facing the potential loss of 508 MW of coal-fired generation, including 340 MW at the San Juan Generating Station in New Mexico and 168 MW at the Navajo Generating Station in Arizona.
TEP plans to begin using Gila River Unit 2 early next year. It also has a three-year option to purchase the 550 MW Unit 2 after SRP takes ownership. TEP has had joint ownership with sister company UNS Electric in the 413 MW Unit 3 since 2014.