Arizona Initiative Proponents Enlighten Us on the Happenstance of Palo Verde Operations

Silly old capricious Arizona Public Service. All this time it had most folks believing it was a serious-minded institution, an electric utility (with 6,400 employees no less) committed to responsibly meeting the needs of its customers and its parent company’s shareholders. Now, as the debate over a proposed ballot initiative intensifies, we’re learning that we’ve had it wrong. APS pretty much might do anything at any time, regardless of what balance sheets, economic modeling, grid analytics or any number of other business-related factors show.

Don’t take my word for it. The true, whimsical nature of APS’ mindset is revealed in last week’s Cronkite News reporting on the proposed Clean Energy for a Healthy Arizona initiative that calls for 50 percent of the state’s electricity to come from renewable sources by 2030. Initiative proponent Rodd McLeod informs us via Cronkite that, “If the Palo Verde plant closes, it’s going to be because APS decides to close it.”

Palo Verde, of course, is the nation’s largest nuclear power plant, the one 50 miles west of Phoenix that has three reactors with a combined electric generating capacity of nearly 4,000 megawatts; the one that annually tops the nation in electricity production by power plants of any kind; and the one that historically achieves among the highest levels of reliability of power plants anywhere in the world.

We discover APS is capricious because McLeod pooh-poohs the utility’s warnings that a decision to close Palo Verde would result from the steepened renewable mandate that, in turn, would force a reduction in the plant’s output and make it uneconomic to operate.  “He was skeptical about APS’ argument that Palo Verde would no longer be economically viable, since utilities from other states own part of the plant,” Cronkite News reports.

Never mind that in neighboring California – which already happens to have a mandate requiring 50 percent renewable generation by 2030 – the upward ratcheting of the renewable portfolio standard was identified as a key driver behind Pacific Gas & Electric’s announcement in 2016 that the Diablo Canyon nuclear power plant’s two reactors will be shuttered when their operating licenses expire in 2024 and 2025.

“California’s new energy policies will significantly reduce the need for Diablo Canyon’s electricity output,” PG&E explained at the time.

Well, maybe business principles and market dynamics matter in California, but apparently not in Arizona, certainly not to a utility as unpredictable as APS. No, “If the Palo Verde plant closes, it’s going to be because APS decides to close it.”

Little did we realize how remarkable it is that the Palo Verde station has remained in operation these many years, irrespective of its high capacity factors and carbon-free electricity generation, to cite just two attributes. It’s kismet, after all, plain old kismet that causes APS to keep its power flowing.


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