Arizona Public Service (APS) is seeking 2,000 MW in bids from its latest 2024 All-Source RFP, with an online bidders conference December 18 and proposals due February 5, 2025.

Derek Seaman, APS’ director of resource acquisition, told NPM that APS is excited to engage the market again and encourage anyone that thinks they have a project that will fit APS’ needs to bid into the RFP.

“We aren’t shy in signing agreements,” he said. “The more market we have, the more bidders, the healthier this will be.”

As an example of this, he pointed to APS’ 2023 RFP which resulted in 7300 MW in nameplate capacity, of which 93% was clean.

“That is a testament to what the market was able to deliver and alignment that we are moving towards our goals that we set out, because resources are showing up the way we anticipate,” he said.

APS’ clean energy commitment targets being 65% clean and 45% renewable by 2030, and to be 100% clean and carbon free by 2050.

“These RFPs give us an opportunity to test the market and see what resources will help us get there,” he said. “I want to emphasize that cost and reliability are the most important to us, and we established those goals looking at where future load needs are going on our system. We think we can get there based on resource cost.”

Seaman said this latest RFP is on the heels of the successful 2023 RFP that concluded a few months ago, and “we are in a rinse, repeat cycle.”

“We are seeing a large amount of load growth in the APS territory,” he said, adding that all of APS’ procurement is tied to its load growth story. “We take a look at what we believe we need from a resource perspective in a given year and procure to that target.”

The new All-Source RFP has identified that APS is on track to grow 3.7% through the planning period to 2038.

“That is a massive load growth for any utility,” he said.

When asked what APS hopes to see as far as technology in the new RFP, Seaman said the utility tries not to prioritize any technology but rather let the market tell them what is best. APS uses production cost modeling on the back end to take a look at what the future state of the utility will be.

He said that APS expects solar, wind, battery energy storage systems (BESS), gas, “the usual suspects.”

“But we will also see technologies we weren’t expecting,” he said. “Lately, it is long-duration energy storage.”

Though the RFP is looking at projects with a COD in 2028, Seaman said that APS will always consider resources that are coming online earlier.

APS has its Green Power Partners Program, which has three aspects “A,” “B,” and “C.” Under “C,” the program allows for additionality where large corporate customers can come to the utility and say that they want to help enable renewable energy in Arizona.

“They look at having a resource come online earlier than when we would take it, and they are willing to pay that cost differential,” he explained. “What’s cool is you’re getting new renewable energy on the system and the customer gets to say they enabled it and are paying the cost differential to bring the project online earlier than we need it. Ultimately, everyone benefits from it and helps make the system more reliable by coming on sooner.”

Because of this, while 2028 is APS’ target first year, the utility will take earlier COD projects.

Additionally, APS is looking out in time because it recognizes some of these new technologies might have a longer lead time maybe due to a transmission line under development. Some of these types of projects won’t reach development until 2030 or 2031.

“We want an opportunity to look at all those projects,” he said.

Recently, APS has also closed on a wave of new tolling agreements and PPAs. Seaman pointed to the Green Power Partners Program as being behind some of that, but also the continued load growth in the region.

Some of these agreements have included Strata Clean Energy’s White Tank Energy Storage Project, Clenera Renewable Energy’s paired Snowflake A project that obtained a 20-year busbar fixed price PPA, and EDF Renewables’ Beehive project that obtained a 20-year energy storage PPA.

Seaman added that APS also isn’t particular when it comes to project location.

“We don’t look to limit a resource,” he said. “If a resource comes from New Mexico, it could still be low cost, best resource. We will not shy away from taking that as a resource.”

The new RPF does have a preference for projects not larger than 600 MW.

It is also seeking proposals to add battery storage at its existing Agave and Ironwood solar projects and develop renewable energy facilities on Navajo and Hopi Nation land.

*This story was originally published exclusively for NPM subscribers.

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