NAIOP’s Energy Economic Forecast addresses power problems

Because of this stretch of stable demand, Geisler says that utilities were trained to maintain reliability by replacing aging infrastructure and keeping up with small increments of new customers. It took APS 140 years of serving customers to grow the grid to its current size, but notes it will double in capacity over the next decade. 

DEEPER DIVE: Why APS COO Jacob Tetlow says grid growth is needed

READ MORE: SRP’s Karla Moran explains how industry support helps grid growth

In the search for more power, Geisler highlights the importance of utilities maintaining a mix of energy sources to avoid overreliance on a single type of fuel. For example, he notes that Arizona is uniquely positioned to take advantage of solar power.  

“But we also have to recognize that solar alone won’t keep the lights on,” Geisler continues. “It’s an important resource that provides low-cost energy during the day, but you still need around-the-clock dispatchable resources to achieve the reliability we need.” 

Natural gas provides on-demand fuel to support renewable energy sources that aren’t always available, such as solar and wind. That’s why the Desert Southwest Pipeline expansion is critical for closing the supply gap. The project brings a 48-inch pipe from the Permian Basin in Texas into Arizona.  

“When you look at our energy consumption, petroleum is the largest, second is electricity and then it’s natural gas,” Brown explains. “But just under 50% of the electricity generate utilizes natural gas — that’s how important a project like [the Desert Southwest Pipeline] is.” 

Since Arizona doesn’t have any natural gas wells, those resources must be brought into the state from elsewhere. Two pipelines currently serve the state, but growth projections indicate that the existing capacity would be maxed out sometime in the 2030s. 

“[The expansion] will add a third source [of natural gas] to the state,” Geisler says. “It will allow us to use our existing power plants more efficiently, serve some of the new generation we have planned and ensure we have a reliable supply going into the 2030s.” 

Energizing development 

As Arizona has gone through its recent economic expansion, Lombard notes that the development community has been frustrated with long wait times for power hookup. Part of the problem, Pratt says, is the sudden jump in energy needs.  

“We used to look at 50 megawatts as a massive project, but today that’s nothing,” he continues. “I’m not trying to make excuses, but never in our history have we had this much demand all at once.”  

“It’s one of the worst times to try and go fast,” Pratt says. “We’re doing everything we can to speed things up, such as buying equipment even if we don’t have a specific project in mind.”  

When asked how the development industry can support grid expansion, the panelists shared these takeaways:  

• “The anti-infrastructure mindset out there is not helpful to any of us. While there’s a right place for these projects, it’s necessary for us to serve our communities. We have to make sure people feel heard and explain why it needs to be built — but we can’t be the only ones telling that story. We need your help.” — Ted Geisler, president and CEO of APS. 

• “We are truly in this together. We want [developers] to be successful, and that comes from honest dialogue and getting in the queue early. When we work collectively, it supports responsible economic development for the whole state.” — Justin Brown, president and CEO of Southwest Gas. 

• “We want to be partners. There may be differences of opinions at times, but there are areas where we need to be rowing in the same direction. If we spend all our time fighting each other, we’ll never get to where we need to be.” — Jim Pratt, general manager and CEO of SRP.