Illustration of expanding natural gas pipelines critical for Arizona's energy needs.
A coalition of over three dozen business and industry organizations is urging the Arizona Corporation Commission to support the expansion of natural gas infrastructure. Led by the Arizona Chamber of Commerce & Industry, the coalition emphasizes the importance of a diversified energy portfolio that includes natural gas to enhance economic competitiveness and protect consumers. They aim to meet growing energy demands and improve Arizona’s energy reliability and affordability through expanded pipelines and storage facilities.
A coalition consisting of over three dozen business, industry, and trade organizations has formally urged the Arizona Corporation Commission to support expanded natural gas infrastructure throughout the state. The coalition, spearheaded by the Arizona Chamber of Commerce & Industry, emphasizes the need for a diversified energy portfolio that incorporates natural gas to protect consumers and bolster Arizona’s economic competitiveness.
Among the signatories are local chambers of commerce and associations from various sectors, including hospitality, real estate, manufacturing, and agriculture. The coalition presents a united front, highlighting the necessity of reliable and affordable energy for Arizona’s ongoing economic success.
The coalition asserts that the expansion of pipeline and storage infrastructure is essential to meet the state’s growing energy demands. This development aims to avert the energy instability seen in other states, and it underscores the critical role that natural gas plays in supporting economic growth and maintaining quality of life in Arizona. Current statistics indicate that natural gas accounted for 27% of Arizona’s electricity generation in 2013, which has dramatically increased to 46% today. The coalition projects that the demand for natural gas will continue to rise significantly over the next decade.
Utilities such as Arizona Public Service (APS), Salt River Project (SRP), and Tucson Electric Power (TEP) expect considerable increases in electricity demand, predicting peak loads to rise between 17% and 40%. Furthermore, Southwest Gas, the largest natural gas utility in Arizona, anticipates a 9% increase in throughput by 2030, reflecting the state’s increasing reliance on natural gas.
Natural gas is recognized for its reliability, affordability, and dispatchability, making it an effective complement to renewable energy sources. TEP’s 2023 Integrated Resource Plan revealed that energy portfolios incorporating new natural gas generation would be more cost-effective, showing a savings of $355 million on a net present value basis compared to portfolios that exclude natural gas.
Many residential customers utilizing natural gas for heating, cooking, and drying report annual savings exceeding $1,100 on energy bills. Moreover, nationwide, commercial and industrial users have saved over $500 billion in the past decade thanks to the use of natural gas.
Arizona currently depends entirely on out-of-state natural gas supply, primarily delivered through the Transwestern and El Paso Natural Gas pipelines. The coalition supports the development of new interstate pipelines and underground gas storage facilities in Arizona, including the proposed Arizona Energy Storage project by El Paso Natural Gas Company. Expanding underground storage would not only enhance resilience but also help stabilize seasonal price fluctuations and safeguard against supply disruptions.
The effectiveness of temporary storage measures was clearly demonstrated during Winter Storm Uri in 2021, when Southwest Gas customers benefited from savings of $1.5 million within just two days.
The coalition commends the Arizona Corporation Commission for its recent approval of new gas-fired generation projects, including expansions at SRP’s Coolidge Generating Station and upgrades at APS’ Sundance and Redhawk plants, as well as the new Bella Power Plant in Pinal County. Such decisions are seen as pivotal for Arizona to meet its future energy needs and maintain competitiveness with rapidly growing states like Texas.
The letter calling for expanded natural gas infrastructure has garnered support from various regional chambers of commerce, signaling a broad consensus on the importance of strategic energy planning in Arizona’s future.
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