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Natural gas

Arizona Utilities Commit to Securing Critical Natural Gas Pipeline Capacity to Meet Growing Energy Demand

Strategic Insights

— 3 min read

Arizona's rapid population growth has led to a drastic increase in energy demand, prompting state utilities to invest in infrastructure to meet this growth. To address this challenge, Arizona Public Service (APS), City of Mesa, Salt River Project (SRP), Tucson Electric Power (TEP), and UniSource Energy Services have committed to securing additional natural gas pipeline capacity through Transwestern Pipeline's Desert Southwest expansion project.

The new pipeline will transport natural gas from the Permian Basin in West Texas to Arizona by late 2029, ensuring year-round regional energy reliability. APS and SRP have independently executed agreements with Transwestern to provide customers with the best combination of reliability and affordability to meet future energy demand. The agreements give the utilities priority delivery of low-cost natural gas to support Arizona's growth and the integration of clean energy technologies to the electric grid.

Key Takeaways:

  • Arizona's energy needs are growing drastically, with energy demand rising at an unprecedented rate due to the state's rapid population growth.
  • All existing interstate pipelines serving Arizona are fully subscribed, necessitating additional natural gas pipeline capacity to maintain reliability.
  • APS and SRP have independently executed agreements with Transwestern to provide customers with the best combination of reliability and affordability to meet future energy demand.
  • The new pipeline will transport natural gas from the Permian Basin in West Texas to Arizona by late 2029, ensuring year-round regional energy reliability.
  • Natural gas resources play a key role in maintaining reliable and affordable power as utilities pursue an all-of-the-above approach that also includes adding wind, solar, and storage to their energy mix.
  • The City of Mesa, TEP, and UniSource are finalizing negotiations with Transwestern, with TEP and UniSource expecting to move forward with an agreement prior to the open season solicitation process later this year.
  • Strengthening Arizona's energy resilience is crucial, as emphasized by Kevin Thompson, Chairman of the Arizona Corporation Commission, who applauds APS, City of Mesa, SRP, TEP, and UniSource for their commitment to maintaining reliability and securing Arizona's energy dominance.
  • Natural gas is needed to maintain strong reliability across the region, including when solar and wind resources aren't producing and battery energy storage isn't available.
  • Each utility conducted a thorough evaluation and negotiation process before identifying Transwestern Pipeline's Desert Southwest expansion project as the top option for their customers.

Statistics:

  • Existing interstate pipelines serving Arizona are fully subscribed, making additional natural gas pipeline capacity essential.
  • The Permian Basin has sufficient natural gas supply, but additional pipelines are needed to serve Arizona power plants and maintain reliability.
  • The new pipeline will fuel critical natural gas facilities that boost the energy grid to keep customers safe and comfortable, and businesses operating.
  • APS serves 1.4 million homes and businesses in 11 of Arizona's 15 counties, safely delivering reliable, affordable electricity.
  • SRP is a community-based, not-for-profit public power utility and the largest electricity provider in the greater Phoenix metropolitan area, serving approximately 1.1 million customers.
  • TEP serves more than 450,000 electric customers in Southern Arizona.
  • UniSource delivers natural gas service to about 170,000 customers in Coconino, Mohave, Navajo, Santa Cruz, and Yavapai Counties and electric service to about 105,000 customers in Mohave and Santa Cruz Counties.

Sources:

  • Arizona Public Service : APS serves 1.4 million homes and businesses in 11 of Arizona's 15 counties, safely delivering reliable, affordable electricity.
  • Salt River Project: SRP is a community-based, not-for-profit public power utility and the largest electricity provider in the greater Phoenix metropolitan area, serving approximately 1.1 million customers.
  • Tucson Electric Power : TEP serves more than 450,000 electric customers in Southern Arizona.
  • UniSource Energy Services : UniSource delivers natural gas service to about 170,000 customers in Coconino, Mohave, Navajo, Santa Cruz, and Yavapai Counties and electric service to about 105,000 customers in Mohave and Santa Cruz Counties.
  • Media contact: APS: Yessica del Rincon, yessica.delrincon@aps.com, 480-209-8513
  • Media contact: City of Mesa: Ana Pereira, ana.pereira@mesaaz.gov, 617-501-8287
  • Media contact: SRP: Jennifer Schuricht, jennifer.schuricht@srpnet.com, 480-625-5070
  • Media contact: TEP and UniSource: Joseph Barrios, jbarrios@tep.com, 520-884-3725

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