FOR IMMEDIATE RELEASE

May 3 2016 12:00:00:000AM
News Media Contact: Joseph Barrios, (520) 884-3725, jbarrios@uns.com

TEP Receives Approval to Develop Two Innovative Energy Storage Facilities

Tucson, Ariz. — Tucson Electric Power (TEP) will enter into long-term agreements with E.ON Climate & Renewables and NextEra Energy Resources for the construction of two large, innovative energy storage systems.

The projects, approved today by the Arizona Corporation Commission (ACC), will be used to improve service reliability and study how such systems can support the expansion of solar power resources and other renewable energy technologies.

“We hope that innovative systems like these will help us achieve our long-term renewable energy goals without compromising the reliability or affordability of our service,” said David G. Hutchens, TEP’s President and Chief Executive Officer. TEP is working to deliver at least 30 percent of its power from renewable resources by 2030, doubling the state’s 2025 goal.

In June 2015, TEP issued a request for proposals to lease a large, 10 megawatt (MW) energy storage system. With bids submitted by more than 20 qualified vendors, TEP was able to select two competitively-priced proposals.

“Because our project partners were motivated to demonstrate the capabilities of their respective technologies, they submitted favorable bids that will allow us to build both projects for less than our original estimated cost to build a single 10 MW system,” said Carmine Tilghman, a TEP Senior Director who oversees the company’s renewable energy programs. “These systems will help us build a more resilient grid at a reduced cost to consumers.”

Both projects will be developed under 10-year contracts with performance agreements to protect customers and the company from financial risks associated with investing in new technologies.

The projects include:

• A 10-MW lithium nickel-manganese-cobalt (NMC) facility at a TEP substation near Interstate 10 and West Grant Road. The system will be built by NextEra Energy Resources, based in Juno Beach, Fla., and is expected to be in operation late this year.
• A 10-MW lithium titanate oxide (LTO) storage facility and accompanying 2-MW solar array located at the University of Arizona Science and Technology Park southeast of Tucson. The facility will be built by Chicago-based E.ON Climate & Renewables and is expected to be completed in the first quarter of 2017.

The systems will be used primarily to help maintain the required balance between energy demand and supply. Energy storage systems can boost power output levels more quickly than conventional generating resources. If the voltage frequency of the regional electric grid suddenly dropped, power producers like TEP would be required to quickly ramp up output to boost frequency and maintain reliability.

The systems also can help prevent power outages during periods of high energy demand by supporting stable voltage on TEP’s energy delivery system. In the event of an outage, the systems could provide about 5 MW of power for up to an hour.

Use of these energy storage systems will help TEP avoid using more expensive generating resources for system disturbances. They also will allow the company to defer costly investments in other system infrastructure.

In the future, energy storage systems could be used to help ensure the quality and reliability of electric service during continued expansion of renewable resources. TEP will continue investing in large solar arrays and other community scale renewable resources that add cost-effective capacity to its renewable energy portfolio. TEP anticipates an additional 800 megawatts (MW) of new renewable capacity by the end of 2030, boosting its total renewable energy portfolio to approximately 1,200 MW.

TEP provides safe, reliable electric service to approximately 417,000 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. To learn more, visit fortisinc.com.