The Arizona Corporation Commission in a 3-2 vote decided not to require the Arizona Public Service Co. to solicit proposals to convert a coal-fired unit at the utility's Cholla power plant to burn biomass. However, the panel said APS still can apply for approval of the conversion if it wants to do so.
The commission in late 2018 adopted a policy to encourage forest bioenergy as a carbon-neutral, renewable energy resource that has the added benefit of reducing wildfire risk through forest management. To that end, the agency on Feb. 22 directed APS and other utilities to start working with commission staff to develop a plan for biomass generation.
A Black & Veatch engineering study commissioned by APS subsequently estimated the capital cost of the conversion at $205 million and the total nonfuel operation and maintenance cost at $10.69 million per year.
In explaining her opposition to requiring APS to undertake the project, Commissioner Sandra Kennedy, who assumed office in January, said during the agency's July 10 meeting at which the vote was taken that she had interpreted the policy to mean implementing it would cost little or nothing.
Commissioner Justin Olson agreed. Instead of making utility ratepayers cover the costs for clearing forests of deadwood and overgrowth to prevent wildfires, the state legislature should pass a law that would fund those efforts through taxes, Olson said. Commission Chairman Bob Burns joined Olson and Kennedy in voting not to require the Pinnacle West Capital Corp. subsidiary to file a request for proposal for the biomass project at Cholla in St. Johns, Ariz.
On the other hand, Commissioners Boyd Dunn and Lea Marquez Peterson voted to require APS to move forward with the project. Dunn and Peterson said the commission majority's decision would send the wrong message about the agency's support for biomass.
Whether APS will pursue the project at this point remains unclear. The utility had been hopeful it could obtain a long-term supply of biomass from the U.S. Forest Service. During the commission's July 10 meeting, Jeremy Kruger, chief executive for the Forest Service's Four-Forest Restoration Initiative, said his agency was launching a request for proposals for clearing thousands of acres of land.