TEP and SRP jointly support project which will change the economic future for Northeastern Arizona cities transitioning away from coal
The Arizona Commerce Authority (ACA) has approved an Arizona Broadband Development grant for Apache County that will benefit rural communities in the Northeastern Arizona region including St. Johns where Salt River Project (SRP) owns and operates the coal-fired Coronado Generating Station (CGS), and the communities of Springerville and Eager, where Tucson Electric Power (TEP) operates the coal-fired Springerville Generating Station (SGS). TEP and SRP each committed $300,000 in matching contributions to help secure the grant and jointly funded an economic study from Rounds Consulting Group, Inc. which looked at how high-speed broadband will help improve the region with new jobs, tax revenue and more.
The $9.7 million in funds the grant will provide are critical to the region to secure high-speed reliable broadband service so the communities in the area can thrive and be competitive in a digital environment as they transition away from coal. Rural communities in Apache County face challenges obtaining reliable broadband services because there is little opportunity for return on investment due to the smaller size and remoteness of the communities.
“Broadband has been the number one priority here in Apache County since I took office. First and foremost, I would like to thank Governor Ducey and the Arizona Commerce Authority for their investment in rural Arizona. I also want to thank Celeste Robertson, the County Attorney’s Office Chief Deputy, along with County Manager, Ryan Patterson, for their time spent discussing economic issues and making decisions on how to move forward as our communities transition out of coal,” said Joy Whiting Apache County Superintendent of Schools, who helped spearhead the application process with key stakeholders in the County as well as SRP and TEP.
“This grant means a lifeline that economic stability rests on. We appreciate the support from SRP and TEP to help us assess the anticipated value and economic considerations. We have more work ahead of us, but we are super excited about Apache County’s future due to the high-speed internet and Broadband available in Apache County,” said Whiting.
The findings from the Rounds Consulting Group study TEP and SRP funded determined that “expanding broadband in Apache County will create approximately 1,060 new jobs in the region over the next decade.” The report also states that each year, the projected new activity resulting from broadband will increase Apache County’s economic output from the total volume of goods and services by $185.5 million, add $86.8 million in labor income, and generate $3.2 million in state and local tax revenues.
In addition to the matching grants offered by SRP and TEP, the selected broadband carrier, Commnet AZ, has committed to nearly $1.5 million. The project is also leveraging existing assets valued at $885,000 that Commnet is utilizing to support the project. Commnet also will pay for the cost on its own to bring wireless service to premises where it is not feasible due to a lack of infrastructure.
“The Apache County area has long struggled with reliable broadband access across its communities,” said Craig Larson, Director of Coronado Generating Station at SRP. “We are grateful to Governor Ducey and ACA leadership for the support and major positive change this means for families in this region, including those who work at SRP’s CGS facility. This community continues to roll up their sleeves and look for viable economic paths forward beyond coal – they have helped influence much of this growth.”
CGS is scheduled to be retired no later than 2032 as part of SRP’s strategy to retire coal-generation units and convert to a less carbon-intensive fleet. SRP’s support for the Apache County’s broadband initiative is part of its commitment under its Coal Community Transition Team which formed last year to partner with the city of St. Johns, Apache County, and all nearby impacted communities reliant on CGS, to help develop a community engagement plan. This work includes conducting preliminary assessments of the CGS community and empowering the community with resource assistance so they can develop and lead an informed strategy that infuses new job opportunities and tax revenue.
TEP plans to retire its two units at SGS in 2027 and 2032, with seasonal operations scheduled to begin next year. Retirement dates have not been set for the remaining two units at SGS, which are owned by SRP and Tri-State Generation and Transmission Association. TEP’s support for the broadband initiative arose from its ongoing work with employees, community members, regulators and other stakeholders to develop a thoughtful, equitable and meaningful transition process that will strengthen local communities and mitigate the impact of coal plant retirements.
“We applaud Gov. Ducey and the ACA for their leadership in strengthening economic development efforts in the region, and we would like to thank the local leaders and residents who have shared their energy and ideas and are helping to shape the future of their communities,” said Erik Bakken, TEP’s Vice President of System Operations and Energy Resources. “It’s collaborative efforts like this that will allow the Round Valley area to continue to thrive by supporting future remote work and education opportunities.”
Beyond economic value, reliable broadband service will provide support to Apache County school children at home, medical facilities, public safety and local government facilities. In addition, the airports in St. Johns and Springerville as well as the University of Arizona Cooperative Extension are covered under this project. Several attempts have been made to bring high speed broadband to the communities in Apache County, with some success through E-Rate funding. County officials contacted other carriers in the area; however, were told that there was not a sufficient return on investment to expand in Apache County.
Work on the broadband project will begin as soon as possible, and the grant stipulates it must be completed within three years. Commnet will begin the first phase immediately and the overall deployment timeline will be shortened given the extensive middle mile network Commnet already owns and operates in Apache county. The project at completion is expected to connect more than 11,000 residents and 4,100 homes across the county.
Further background on the Apache County’s application and individuals involved to in this process can be found in the Apache County grant announcement, and additional information about Apache County’s project and the Arizona Broadband Development grant can be found on the ACA website.
SRP is a community-based, not-for-profit public power utility and the largest electricity provider in the greater Phoenix metropolitan area, serving approximately 1.1 million customers. SRP provides water to about half of the Valley’s residents, delivering more than 244 billion gallons of water (750,000 acre-feet) each year, and manages a 13,000-square-mile watershed that includes an extensive system of reservoirs, wells, canals and irrigation laterals.
TEP provides safe, reliable electric service to more than 438,000 customers in Southern Arizona. For more information, visit tep.com. TEP and its parent company, UNS Energy, are subsidiaries of Fortis Inc., which owns utilities that serve more than 3 million customers across Canada and in the United States and the Caribbean. For more information, visit fortisinc.com.