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September 2020

APS to host Stakeholder Meeting

The Company made an announcement this afternoon. 

"APS plans to host a virtual stakeholder meeting on Tuesday, September 15, 2020 from 1:30 to 3:30 p.m.  This is a follow up to the June 11th meeting which was held prior to the filing of the Company’s Final IRP on June 26, 2020.  We will send out an agenda in the next few business days and will file a notice of the upcoming meeting in the Commission’s Docket No. E-00000V-19-0034.

We look forward to the discussion and hope you will be able to participate."

Stranded Costs for Four Corners?

When the Competitive Power Alliance opposed APS's purchase of the Four Corners Power plant, we predicted that the purchase would be a financial disaster for APS.  Our prediction has come true and APS is attempting to cut its losses by retiring the plant in 2031.  This is seven years earlier than the planned retirement date.  

ACC Chairman Bob Burns has asked APS to come up with a plan to account for the stranded investment associated with the closing the plant early.    Here's a copy of the Burns letter.

If I had my consumer advocate hat on, I would argue that there is no stranded investment associated with the early retirement.  The rationale for stranded investment is that the company was required to make the purchase in order to ensure reliability.  The Regulatory Contract implies that in exchange for this increased capacity, the ratepayers on on the hook for any costs associated with the early obsolescence or retirement of the plant.  

However, APS purchased the plant over the objections of the stakeholders.  Sure, the plant increased capacity and reliability, but it was one of the more expensive and riskier options available at the time.  APS bet heavily on the long term economic viability of coal and lost.  They could have met their needs through low risk contracts with existing natural gas plants.  They assumed the risk and now they are trying to shift that risk to ratepayers.