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Powering Arizona’s Remarkable Growth
As Arizona’s population and economy continue to grow, so does the state’s appetite for electricity.
APS’s customer base, which for decades leaned heavily residential, is now more diversified than ever before. A robust increase in commercial and industrial customers in our service territory – including new chip manufacturing and expanding data center operations – is leading to incredible economic growth and triggering a historic wave of demand for electricity in our state.
From our inception in 1886, it has taken APS nearly 140 years for our system to exceed 8,000 megawatts (MW) in peak customer demand. (Peak demand refers to the time of day when electricity consumption is highest, typically in the evening or during peak summer heat.) We expect that number to grow to more than 13,000 MW over the next 14 years – an increase of 60%.
This demand for energy is being led, in large part, by extra-large energy users who need consistently high levels of reliable energy 24 hours a day, 365 days a year. In particular, the data center industry is growing exponentially, driven by an increase in cloud computing services, artificial intelligence and the Internet of Things (IoT). These technologies require massive amounts of data to be processed and stored, leading to a surge in demand for data centers – and the energy to power them!
Here at APS, we are working to meet the electrical resource and infrastructure needs of these prospective users by identifying and developing innovative solutions, including a “growth pays for growth” strategy. That’s why we’re proposing to the Arizona Corporation Commission new rates specifically for extra-large energy users. We have a responsibility to ensure reliability for the families and businesses that currently count on us for energy before expanding service to new data center projects.
In short, we will only commit to providing service to these prospective data centers – and other extra-large energy users – when we can ensure it will not compromise reliability or affordability for our existing customers.
As we navigate these unprecedented requests for energy, APS remains fully committed to supporting growth in our state in a responsible and sustainable manner. To clarify, however, it is not growth for the sake of growth we are seeking.
We are pursuing smart growth that can help us develop a cleaner and more efficient energy supply while ensuring reliability and keeping bills as low as possible for customers. The result will be a stronger Arizona for the long term.
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