Hydrogen-powered big-rig company Nikola and Arizona Public Service (APS) have received the go ahead from state utility regulators for an agreement to use surplus electricity to generate clean hydrogen gas to power fuel cell vehicles.

The deal provides Phoenix-based Nikola with a competitive electric rate specifically designed for the production, processing, and dispensing of hydrogen to accelerate the development of carbon-free vehicles and fueling stations for the transportation industry.

It’s another step forward to the realization of a zero-emission heavy-duty freight corridor along the I-10 freeway between Phoenix and Los Angeles, company officials and state regulators said.

“The approval of this special rate for hydrogen production is critical for advancing the future of zero-emissions transportation and building a hydrogen economy,” Nikola CEO Mark Russell said.

Advancing hydrogen economy in the state

The Arizona Corporation Commission (ACC) unanimously approved the application from APS for the new rate structure this month, which  could serve as a national model for additional hydrogen production facilities, ACC Chairwoman Lea Márquez Peterson said.

Arizona will benefit with cleaner air, jobs for the new economy, and increased economic development, she said.

“For decades, hydrogen has been a promising, but elusive, source of clean energy for both the transportation and power sectors. We simply haven’t done enough to bring hydrogen to the mainstream,” Márquez Peterson said.

Under the rate structure, Nikola officials said they will be able to deliver hydrogen at “market leading prices” and within the ranges required for Nikola to offer competitive lease rates for its trucks’ customers.

The company anticipates deploying hundreds of millions of dollars in capital to construct its hydrogen facilities throughout the state and employ a diverse workforce in doing so, they said.

Win-win for electric customers and APS, too 

APS, which filed the application for the unique rate structure in December, will also benefit from the agreement. The hydrogen fueling stations will require a very high load capacity, above 92-percent. Customers with high load factors provide operational and other economic benefits to the distribution system.

These customers help to reduce the overall cost for APS to serve all of its customers, flattening the overall load profile and allowing APS to operate its power plants in a more efficient manner, reducing the per kilowatt hour costs to APS customers, APS officials said.

Production of hydrogen-electric long haul trucks coming

Phoenix-based Nikola is a designer and manufacturer of zero-emission battery-electric and hydrogen-electric vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen station infrastructure.

In a venture with Italian industrial truck maker Iveco, Nikola is planning production of a battery-electric semi truck next year in Ulm, Germany.

Nikola also has begun construction of a $600-million electric truck assembly plant in Coolidge, Ariz., where it plans to start constructing a fuel-cell semi truck in 2023. The hydrogen-electric powered semi-truck is for the medium and long-haul trucking sectors, with more than 1,000 horsepower and 2,000 ft. lbs. of torque.

To power these trucks, Nikola plans to build hydrogen fueling stations across Arizona and North America.

To view Nikola’s Two hydrogen-electric powered semi trucks in action, visit 2021 Nikola Two electric semi truck.


This story was originally published at Chamber Business News.