Arizona Corp Comm Votes to Convert Springerville and Coronado Generating Stations to Natural Gas

On Wednesday, the Arizona Corporation Commission voted unanimously to approve the conversion of the Springerville and Coronado coal generating plants to natural gas.

The Springerville plant is owned and operated by TEP while the Coronado plant is owned and operated by SRP.

The futures of both the Springerville and Coronado coal plants and the inevitable loss of major sources of dispatchable power have been in jeopardy for years as previous federal mandates would force their closure in the next six years.

Although TEP only owns 2 of the 4 units at Springerville, the other owners contracted with TEP to maintain and operate the generating station. TEP requested the modification from coal-fired boilers to natural gas-fired boilers for Units 1 and 2 only. TEP commented that they expect the natural gas pipeline required to serve the Springerville plant to be completed by the end of 2029, with the conversion of Units 1 and 2 to be completed by the first quarter of 2030.

Springerville Units 1 and 2 have the potential to produce 700-800 MW of combined base load that would need to be replaced. In order to continue operation past the closure dates and meet the EPA guidelines, TEP would be required to install upgrades and retrofits in excess of $450 million. These costs would ultimately be recovered from ratepayers. The conversion of the boilers from coal-fired to natural gas-fired is estimated to cost $170 million.

SRP indicated that they expect the natural gas infrastructure needed to serve Coronado and the conversion of the coal units to be completed by late 2029.  SRP noted that the cost of the Coronado conversion is estimated to be $1.1 billion through 2045, which includes the cost of the conversion and the operation of the facility. In comparison, SRP estimates that replacing Coronado with a brand-new natural gas facility would cost $300 million more than the conversion for the same timeframe. SRP also considered long-duration lithium-ion batteries which would cost approximately $1.2 billion more than the Coronado conversion and would limit the firm capacity that would otherwise be available all hours of the day with the conversion.

Coronado currently supplies approximately 10 percent of SRP’s peak demand, and it is considered a vital baseload capacity which is necessary to maintain reliability for SRP’s customers. To put the plant’s capacity into perspective, it produces enough power to serve more than 150,000 homes.