APS: Working to bring nation’s advanced energy future to all customers

Phoenix-based Arizona Public Service Co. (APS), the state’s largest investor-owned utility, plans to be 100 percent carbon-free by 2050, largely via increased solar use among all its customers.

In fact, APS expects to nab 45 percent of its power from renewable sources like solar and wind by the end of 2020, said Jeff Guldner, president and chief executive officer of both APS and its parent company, Pinnacle West Capital Corp.

“We know we’re going to have to do a lot of different things to get there,” said Guldner during a Feb. 12 general session at the National Association of Regulatory Utility Commissioners (NARUC) 2020 Winter Policy Summit held in Washington, D.C.
Guldner said APS right now is about 50 percent carbon-free, much of that success owing to APS’ operation of its Palo Verde Generating Station, the nation’s largest energy producer — all of it carbon-free, ranking APS among the top five investor-owned utilities for solar energy capacity.

APS — which sells retail and wholesale power and energy-related services to some 2.7 million customers across the state — considers advancing energy storage to be key, Guldner said.

“One of the biggest issues we’re going to deal with is energy storage — how do we take the solar energy, store it and shift it off for use later in the day after the sun goes down,” he said. “Certainly, we’re going to need battery technology and other opportunities to store that energy.”

And “one of the things that excites me,” Guldner added, “is how you engage your customers in that process.”

For instance, regarding thermal storage, he said APS wants to determine how to store energy in a home, such as in a water heater — something on the customer side so that the utility can then shift that over and not have that customer running the air conditioner at peak.

“Those are the opportunities we know we’re going to have to embrace,” said Guldner, “so I get all excited about that.”

Along those lines, Guldner said he recently was out in the field where a lineman working in a rural region told him that most of the APS customers served out there live in mobile homes, presently another potential challenge for bringing such customers online with a clean, advanced energy future.

“As we move forward together in this advanced energy economy,” Guldner said, “we have to figure out how we’re going to keep all customers involved and that’s going to require diversity.”

APS, for example, runs programs to help improve energy efficiency and reduce costs for underserved customers.
“We put about $5 million a year into working with just our low- and moderate-income customers to do weatherization,” Guldner said.

And because “Arizona’s got a lot of solar energy potential,” he said one of the most innovative things APS has done involves solar energy.

About 10 percent of APS residential customers currently have rooftop solar. These are customers who Guldner said generally have good credit scores and tend to be the company’s most-affluent customers. “But you don’t see a lot of rooftop solar with low-income consumers,” he said.

So APS developed a program whereby it works with local installers within the Arizona ecosystem to install solar panels on roofs the company leases from low-income customers, who in return get a $30 a month bill credit. APS gets the energy from that solar panel as it comes into the company’s system.

“It’s a nice way of allowing consumers to have access to something that they otherwise wouldn’t have,” said Guldner.
Other program benefits include helping APS to deploy its solar footprint directly, while keeping money in the community via local installers.

“Certainly, there are a lot of things you can do by just thinking about it,” Guldner added.

The CEO also discussed fiber, the importance of broadband and getting access to rural communities.

Although the company isn’t in the broadband business, Guldner said APS has plenty of extra capacity on the transmission lines it operates that go into rural communities.

Through an APS strategic fiber program, the company leases capacity on those transmission lines to telecommunications providers that put fiber on them to go into areas of Arizona without broadband, “in a lot of cases, it’s redundant broadband so there’s very limited access,” said Guldner.

“We lease that to telecom providers that go through our FERC rates as a revenue credit,” he explained, “so whatever we make on that lease, it actually comes back to lower the rates that we have to charge customers because we’re able to offset that with a revenue credit.

“It’s a good example of how you can look for creative partnerships and solutions to help all customers,” he said.