Pinnacle West Capital Corporation
) key ancillary Arizona Public Service ("APS") disclosed updates
on the performance of its solar business in 2012 as well as
revealed the 2013 solar plan.
Last year, the diversified utility operator added 148
megawatts ("MW") to its generation capacity. The increased
production will help serve more than 35,000 consumers in the
state of Arizona thereby cementing its position as one of the
leading power service providers in the region.
The company expects the figure to increase twofold in 2013.
Pinnacle West intends to supplement its generating capacity by
adding 600 MW of solar power by the end of 2013 which will serve
around 150,000 customers.
The company's confidence is reflected in the various projects
which are lined up this year. This includes the 250-MW Solana
Generating station which will become operational in the latter
part of 2013. APS will acquire 100% of the power for 30 years
from Solana which is currently owned and operated by Abengoa
Meanwhile, in 2013, APS will also benefit from its
distribution programs. It has plans to bring online two plants
under its flagship AZ program - the 35 MW Foothills Solar Plant
and the 14 MW Hyder II Solar Power Plant in Yuma County.
The incremental production in 2012 came on the back of the
completed 19 MW Chino Valley Solar Plant as well as the final 5
MW Hyder I Solar Plant. Both these plants are part of APS' AZ
program. Moreover, the company inked a 15 MW power purchase deal
with a facility of SunEdison, the Saddle Mountain Solar Power
However, the largest growth incentive came from the
residential customers installing systems on their houses and
businesses. The number reached 7,500 in 2012 compared with less
than 6,000 in 2011.
Arizona's hot climate - especially in the southwestern part
mostly comprising deserts - encourages the generation of solar
energy. These multiple initiatives and climate advantage will
well place the company to fulfill the Arizona Renewable Energy
Standard. This dictates APS to produce 15% of the power from
renewables by 2025.
With strict environmental policies coming into play and an
expected 2.6% rise in consumption in the U.S. as per the Energy
Information Administration (EIA) report, the renewable market
will grow at a steady clip in the future. This will certainly
bode well for the company's growth trajectory.
Notwithstanding the rise in demand for clean energy,
conventional utility sources like coal and natural gas will
continue to dominate the U.S. energy market owing to their
abundant availability. Presently, Pinnacle West retains a Zacks
Rank #3 (Hold).
Other utility companies to look out for are Zacks Rank #1
Brookfield Infrastructures Partners L.P.
Pike Electric Corporation
Based in Phoenix, Ariz., Pinnacle West along with its
subsidiaries offers retail and wholesale electric services
primarily in the State of Arizona.
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