The Salt River Project ("SRP") is appealing the Arizona Corporation Commission's refusal to allow a major expansion of its generating station near Coolidge, which it previously said is necessary to avoid the possibility of summertime outages as soon as next summer.
Superior Court Judge Randall Warner upheld the ACC's decision, and SRP initially said it would appeal to the Arizona Supreme Court. However, after the ACC's objection, the appeal is now landing with the intermediate level Court of Appeals.
SRP is also opposing efforts by nearby residents from the historic Black community of Randolph to hold the utility responsible for attorneys' fees of more than $171,000.
Judge Warner has not yet ruled on the attorneys' fees issue, but signed his decision upholding the ACC's decision in late January, specifically stating that he was deciding quickly - after the two-day trial - because "Given Arizona’s power needs and the environmental interests at stake in this case, there is an urgent need for final resolution of whether SRP may build the Coolidge Expansion Project."
Surprisingly, given SRP's public statements that its users could experience outages by the summer of 2024 without the addition of 16 natural gas turbines for peak demand power, SRP has not tried to expedite the appeals process.
SRP tells Arizona's Law that in light of the ACC's rejection one year ago, it "is diligently working to move forward with all viable projects that can be online by summer of 2024 and thereafter to meet the electrical service needs of our customers." Those include two "flexible natural gas turbines" at Copper Crossing (north of Florence), and upping renewable and battery storage additions to come online by next summer.
Their response indicates that those smaller projects will also "come at a much higher cost" that the Coolidge expansion (hint, hint), and that with power demands continuing to grow, they are concerned for the summers of 2026 forward if the Coolidge expansion is not in place by then.
(SRP's full response is provided below.)
Judge Warner noted in his 17-page Opinion that SRP had to prove to him that the ACC's rejection was either "unreasonable or unlawful." He listened to witnesses presented by the parties, but he was not substituting his findings for the Commission's.
The Commission's Siting Committee had conducted an 8-day long hearing and voted 7-2 to approve the expansion. The Randolph residents and the Sierra Club asked the Commission to review. Surprising nearly everyone, after listening to Randolph residents and others, the Commission voted 4-1 to reject it.
Warner reviewed the Commission's Findings of Fact and Conclusions of Law in detail, and only found one or two minor issues with them. The overall balancing the Commission did was appropriate, he found several times. Here is one example:
At the hearing before the Siting Committee, SRP offered testimony that it had no other viable alternatives to meet its identified need without increasing the cost to customers, reducing reliability, and/or delaying implementation. These are valid points, since the Commission must consider how the cost of mitigating environment impacts will affect customers. And the Commission could have agreed with SRP, finding that the need for the Coolidge Expansion Project outweighs its environmental impact because, among other reasons, there is no other viable option.
But it was not required to. The Commission could lawfully question whether the Coolidge Expansion Project is as necessary as SRP claims. And just as SRP could argue that there are no other viable alternatives, the Commission could find that there are, or that SRP did not sufficiently explore alternatives to say it had none.
SRP's Opening Brief is currently due May 16.
Here is Judge Warner's Decision, followed by SRP's responses to Arizona's Law's questions.
Q: In his decision, Judge Warner said "an urgent need for final resolution of whether SRP may build the Coolidge Expansion Project." SRP CEO is on record as saying there could be blackouts by next summer if not expanded.
Is that still the projection?
SRP is diligently working to move forward with all viable projects that can be online by summer of 2024 and thereafter to meet the electrical service needs of our customers. SRP has announced multiple renewable and battery storage resource additions that will come online by 2024, as well as two flexible natural gas turbines – each with an output less than 50 MW – to our Copper Crossing Energy & Research Center. Several of these resources will come at a much higher cost than the Coolidge Expansion Project, but they are critical additions to providing the capacity needed to serve SRP customers in 2024 and 2025.
Despite SRP’s efforts to secure capacity for 2024 and 2025 energy needs, there remains risk to meeting SRP’s forecasted capacity over the next few years and thereafter. SRP’s forecast for electricity demand continues to grow in the years beyond 2025, and SRP still projects a need for the capacity that the Coolidge Expansion Project would have provided in summer 2026 and 2027.
Lastly, it is important to note that meeting peak capacity needs is only one aspect of meeting power system reliability needs. SRP also needs the flexibility offered by the quick-starting, fast-ramping turbines proposed for the Coolidge Expansion Project to help expand and backup SRP’s growing renewable resources and support unanticipated long-duration outage events.
The decision was two months ago, and it appears that SRP is not doing anything to expedite the appeals process. Why is that?
On February 17, SRP filed a notice of appeal with respect to the January 20 Superior Court decision to affirm the ACC’s previous denial of the Coolidge Expansion Project’s Certificate of Environmental Compatibility (CEC).
SRP is seeking to appeal directly to the Arizona Supreme Court to expedite the appellate process. SRP believes the Superior Court decision was incorrect regarding its interpretation and application of the factors that must be considered under the Arizona line siting statute, and that the Superior Court should have granted SRP’s appeal.
SRP maintains the flexible-fast ramping Coolidge Expansion Project is still the best option to meet our customers’ energy needs without compromising reliability. It also remains the best option to enable SRP’s efforts to reliably add to its robust portfolio of renewable resources, such as 2,025 megawatts of solar energy which will be online by 2025, 161 MW of wind, and over 1,100 megawatts of battery storage projects online by 2024, which is enough to power more than 180,000 average size homes for up to four hours.
"AZ Law" includes articles, commentaries and updates about opinions from the Arizona Supreme Court, U.S. Supreme Court, as well as trial and appellate courts, etc. AZ Law is founded by Phoenix attorney Paul Weich, and joins Arizona's Politics on the internet.
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