2023 Integrated Resource Plan

We project that peak energy demand will increase from 2,382 MW in 2024 to 2,800 MW in 2038, or more than 1 percent each year. This increase accounts for both economic growth and the increased use of electric vehicles, as well as load reductions realized through distributed solar and energy storage systems and participation in TEP’s energy efficiency programs. The portfolio proposed in TEP’s 2023 IRP is designed to meet those needs while accounting for extreme weather and increasing supply constraints on the western regional electric grid.

Our preferred plan emerged from 32 potential portfolios developed and analyzed in the company’s resource planning process.  One option added only new renewables and storage, for example. Others altered the operating timelines for Units 1 and 2 at TEP’s coal-fired Springervillle Generating Station, which are scheduled to retire in 2027 and 2032. TEP selected the portfolio that was found to support reliability and achieve targeted CO₂ reductions at the lowest cost to customers.

The goal articulates our long-term strategy for maintaining safe, reliable service, which requires a responsible plan to mitigate climate related risks. We are confident that advancements in non-carbon emitting technologies like long-duration storage, carbon capture and sequestration, hydrogen and small modular reactors will be critical in an all-of-the-above strategy to reach net zero by 2050.

While we don’t know for sure what our 2050 resource mix will look like, we’ll make sure it supports both reliability and affordability.

We do know that we’ll need some help.  Smart energy use is the best way to make progress toward our goals.  By taking simple steps like installing a smart thermostat, improving insulation, changing air filters regularly, and shifting usage to off-peak periods, customers can play a leading role in achieving our goal. Learn more about how you can be a net zero hero.

While the vast majority of our new generation will come from renewable sources, we also need more reliable, on-demand resources to replace retiring coal plants and supplement the shifting output of wind and solar power systems. Additional around-the-clock generating capacity also will make our community safer and more resilient during periods of extreme weather and potential shortfalls on the regional electric grid.

Any new natural gas resources we develop will support a potential conversion to run on clean hydrogen, an emerging technology that produces no CO₂ emissions.

In addition to combatting climate change, retiring our remaining coal plants at a responsible pace will help keep our service both reliable affordable for customers.

While Units 1 and 2 at our Springerville Generating Station remain cost effective and reliable for now, that’s unlikely to remain true beyond the dates we’ve set for their retirement (2027 and 2032, respectively). New and existing environmental regulations could require costly upgrades or restrict their output. We also anticipate increasing fuel supply and delivery risks.

Coal plants were designed to run year-round at high capacity factors, but this is no longer cost-effective due to the increasing availability of lower cost renewable energy. Trying to operate these plants at reduced output levels results in higher maintenance costs and reduced availability, putting them at an even greater disadvantage to other alternatives.

Announced our retirement plans for those units in 2020 has provided TEP with a 12-year runway to help prepare our employees and their communities for their eventual closures.

The Arizona Corporation Commission will review TEP’s 2023 IRP in a process that includes opportunities for public comment. Details about those steps will be posted here as they become available.

Our plan sets a direction and establishes our priorities as we pursue a more reliable, more sustainable energy supply. But we’ll continue to update it regularly, as the last few years have demonstrated that circumstances and cost assumptions can change in ways we can’t predict.

We anticipate issuing future all-source RFPs, much like we did in 2022, that will invite developers to propose emerging, cost-effective technologies that may prove more advantageous than those anticipated in our immediate analysis. Finally, future resource plans will be updated every three-years to reflect updated information, technology and market trends.