Pinnacle West Capital Corp.
) core business wing, Arizona Public Service ("APS"), in
collaboration with Luke Air force Base ("AFB") will construct a new
utility-scale solar plant on a 100 acres land which the former will
lease from Luke AFB. The company is leasing the land under the
Enhanced Use Lease program, a joint initiative between public
utilities and Air Force, to promote renewable energy.
APS will lease the land for a period of 30 years from Luke AFB for
$6 million. Construction of the solar complex is anticipated to
commence from the fourth quarter of 2014. The 10 megawatt (MW)
plant will be integrated into Pinnacle West's AZ Sun Program and
will be operational by summer of 2015.
The solar project will generate adequate electricity to power 2,500
residences in Arizona and will aid in curbing greenhouse gas
emissions of 12,000-15,000 tons per year. The latest project will
bring the total solar energy capacity to 170 MW under the AZ Sun
program which will sufficiently power over 42,000 customers in
As of now, Pinnacle West has 8 projects under its AZ Sun program
that are already operational or in the development phase. The
program is the cornerstone of the company's future renewable
Pinnacle West has been aggressively broadening its renewable
operations to seize on the growing opportunities in the solar
market. Lower installation cost throughout last year helped the
solar industry as weighted average price for photovoltaic modules
fell 15% in 2013. Solar accounted for 29% of overall new capacity
generation added in 2013, up 10% from 2012 as per Solar Energy
Meanwhile, the Energy Information Administration predicts that
utility-scale solar capacity will expand by 57% within the 2013 and
2015 period. In early Jun 2014, the biggest incentive came to
renewable producers when the Obama Administration announced a
proposed 30% reduction in carbon emissions from coal-fired plants
by 2030 from the 2005 levels. We believe Pinnacle West's clean
energy expansion efforts are coming at an opportune moment which
will bode well for its future growth.
Currently, the company holds a Zacks Rank #3 (Hold). Investors may
also consider better-ranked utility stocks like
NRG Energy Inc.
Korea Electric Power Corp.
). All these stocks hold a Zacks Rank #1 (Strong Buy).
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