Earlier this year, President Trump signed a trio of executive orders aimed at keeping our nation’s vital coal power plants online. In fact, at the signing ceremony, the President explicitly called out one of Arizona’s coal plants by name. He directed Department of Energy Secretary Chris Wright to keep the Cholla Power Plant online and told the workers to remain calm because they are going to have that plant “opening and burning…coal in a very short period of time.”
The Cholla Power Plant is one of many Arizona coal plants that have either been mothballed or slated for retirement in the near future. In 2019 SRP and the other utilities shut down the Navajo Generating Station, resulting in a loss of 2,250 MW of reliable capacity. Earlier this year an additional 425 MW of generating capacity was taken offline at Cholla. And over the next six years, Arizona’s public utilities, as outlined in Integrated Resource Plans recently approved by the Arizona Corporation Commission, plan to shutter every last bit of coal generation in Arizona by 2032. Most alarming is that according to those same Resource Plans, the replacement fuel for this reliable source of energy will be solar, wind, and battery storage, all to meet carbon free “Net Zero” goals that will cost Arizona ratepayers billions and destabilize the grid.
On the same day President Trump signed the coal orders, the Arizona legislature, led by Representative David Marshall, sent a letter to the Department of the Interior urging the Administration to help keep Cholla, and every other coal plant in the state, online. Last month, every Republican in the legislature voted to send HCM2014 to the Corporation Commission, urging them to protect our grid, fight to keep these plants online, and support the Trump Energy Agenda.
What Arizona ratepayers got instead was a late Friday afternoon news dump from Kevin Thompson, Chairman of the Corporation Commission, blasting the idea of reopening Cholla. In his press release, Thompson and fellow Commissioner Nick Myers claimed that it would cost ratepayers $1.9 Billion to keep Cholla online and then took the time to attack and belittle GOP lawmakers and advocates of the Cholla option.
It is interesting to note that prior to this figure being disclosed by Thompson and Myers, it was impossible to get any actual numbers or a cost analysis from the commission comparing the price of coal to other green new deal options. Every time the subject was brought up, we were simply told that going solar is the cheapest option and that we should just “trust the experts.” It is unclear how Commissioner Thompson even arrived at this figure.
But now we have their figure, let’s take them at their word: keeping Cholla online has a price tag of $1.9 Billion. That sounds high, and ratepayers might be concerned about footing that bill. But this doesn’t take into account that the 425 MW of electricity from Cholla has to be replaced with another source of energy. So, instead of keeping coal online and adding additional capacity to meet future demand, we now must foot the bill for replacement power and new capacity.
And what would that replacement power cost? Since the utilities' future resource plans depend almost exclusively on green energy generation to meet their climate commitments, “Net-Zero Heroes,” that is what ratepayers should expect – solar plus battery storage to replace our coal plants.
And what do solar plus storage projects cost? The Eleven Miles Center, built in 2024 by SRP at a cost of $1 billion, has an advertised peak capacity of 300 MW with four hours of 300 MW storage. The APS Papago Solar and Storage project is planned to be operational in 2026 and has the same capacity. The advertised cost is $836.4 million.
At first blush both solar projects appear to have a similar output compared to Cholla at a slightly lower price, but that doesn’t tell the whole story. A coal plant with a capacity of 425 MW of capacity can produce power 24 hours a day, seven days a week. Solar? The advertised capacity of 300 MW of solar from Eleven Miles Center or the Papago project will only produce 300 MW for a few hours each day and drop to zero every single night when the sun isn’t shining.
So how much solar needs to be built to match the dispatchable coal power being replaced? According to energy experts such as Alex Epstein, AlwaysOn Research and Energy Secretary Chris Wright, for every 1 MW of reliable, dispatchable coal power being replaced, the grid will need more than 3 MW of solar plus storage to meet demand.
In effect, to replace the capacity of 425 MW at a plant like Cholla, the utilities will need to build approximately 1,700 MW of solar plus storage at a ratepayer cost between $4.7 billion and $5.7 billion dollars! Additionally, paying triple the cost for solar will only provide the grid with four hours of battery backup, so ratepayers would still benefit more from investments in projects like Cholla than in unreliable solar and storage.
Given the exorbitant price tag to build thousands of acres of intermittent, unreliable solar and batteries, it seems crazy not to seriously consider keeping Cholla open. Combined with the announcement this week by the EPA to move toward repealing the radical Obama/Biden era “Clean Power Plan 2.0” rules and anti-science “endangerment finding”, the cost and regulatory barriers to expanding the use of coal and natural gas are being swept away.
Yet despite the efforts of the Trump administration and GOP lawmakers, Commissioners Kevin Thompson and Nick Myers continue to obstruct the exploration of expanded coal development in Arizona. They have also shown no interest in revisiting the utility Resource Plans that were rammed through the process right before the November election. The regulatory, tax, and subsidy environment that drove many of the assumptions in those plans are now defective with Trump in the White House. Items such as the closure of Cholla Plant, along with other coal facilities on the chopping block, should all be reopened and reconsidered.
Arizona has huge energy demands on the horizon. The implementation of Trump’s agenda will secure our energy future and keep Arizona free and prosperous. The reflexive opposition to coal and other fossil fuel generation perhaps made some sense when Biden and the Green New Deal Left was driving the energy agenda, but that's no longer the case. Instead, Commissioners Thompson and Myers seem stuck in the Green New Deal world of 2023, which means ratepayers all get stuck with a costly, unreliable grid while they are at the Corporation Commission.