Pinnacle West Utility To Invest $500 Million In Solar Power
By Cassandra Sweet, Of DOW JONES NEWSWIRES
ANAHEIM, Calif. -(Dow Jones)- Pinnacle West Capital Corp.'s (PNW) top
executive said Wednesday the company's Arizona utility plans to invest at least
$500 million over the next few years to develop solar-power generation and
expand its rooftop solar program to include more residential customers.
Arizona Public Service Co. currently owns and operates 1.5 megawatts of small
solar systems, but the company wants to expand that with a $500 million program
that would develop about 100 megawatts of solar-panel generation over four
years, said Don Brandt, chairman and chief executive of Pinnacle West and chief
executive of APS.
With electricity demand in the utility's service territory growing about 2% a
year, APS will need to tap about 1,500 megawatts of new renewable power by 2025
and "the majority will be solar," Brandt said, speaking on the sidelines of a
solar-power conference in Anaheim, Calif.
"We see solar as virtually our only viable opportunity to supply the megawatt-
hours," Brandt said. He added that state regulators have been supportive of
APS's foray into solar power generation, although the company is awaiting their
approval for its proposed $500 million solar program.
The company's focus on solar is driven largely by state regulations that
require utilities to use renewable sources for 15% of the power they sell by
2025, with nearly a third of that coming from distributed generation, like
rooftop solar, that is used close to where it's generated.
APS recently received $3.3 million in federal stimulus funds to support a $14
million rooftop solar program in Flagstaff, Ariz., involving 300 homes. Brandt
said he wants to expand that program to allow more of the utility's 1.1 million
customers to participate. APS installs and owns each rooftop solar system and
signs a contract with the homeowner that locks in the customer's utility rate
for 20 years. The rate is often about half of what the customer would ordinarily
pay for electricity, Brandt said.
It makes sense for the utility to pay for the system, Brandt said.
"After our rebate and federal and state tax credits, (a solar system) still
costs about $10,000 to $15,000...that's a lot of money," Brandt said. "We can
finance it on our balance sheet a lot cheaper than a customer can on their
credit card."
Brandt noted that solar power is one of several resources that APS, which owns
the nation's largest nuclear power plant, is counting on to meet future growth.
In Arizona, where the sun shines strongly 300 days a year, investing in solar
makes sense, said Brandt, who was named Wednesday as the Solar Electric Power
Association's "utility CEO of the year."
Shares of Pinnacle West were recently trading 13 cents lower at $33.28 apiece.
-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@
dowjones.com
(END) Dow Jones Newswires
10-28-091552ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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