APS Expands Its AZ Sun Program - Analyst Blog

Arizona Public Service Co. (APS), a unit of Pinnacle West Capital Corporation (PNW), has made ties with SunEdison, a subsidiary of MEMC Electronic Materials (WFR), for the construction of two photovoltaic (PV) power plants under its AZ Sun program.

Under the contract, SunEdison will develop two PV plants at Hyder and Chino Valley, which are located 40 miles east of Yuma and 15 miles north of Prescott, respectively. Combined capacity at these plants is expected to be 37 megawatts, with 17-megawatt at the Hyder solar plant and 20-megawatt at the Chino Valley solar plant. APS will take over ownership of the two plants after completion.

Construction work at the Hyder plant is expected to begin in June 2011, while construction at the Chino Valley project is scheduled for the first quarter of 2012. The Hyder and Chino Valley projects are expected to come online by year-end 2011 and year-end 2012, respectively. Both facilities will use polycrystalline photovoltaic panels mounted on single-axis tracking systems.

These solar plants, along with other existing and under-construction projects, will increase APS' renewable energy portfolio to nearly 682 megawatts by 2013.

Under APS' AZ Sun program, the company develops utility-owned photovoltaic power plants using the procurement model. In this model, the company contracts with third parties to build the solar plant and takes ownership of the plant when it goes into commercial operation. The company estimates developing 100 megawatts of utility-owned photovoltaic power plants through this project. Including the above 37 megawatt plants, APS currently has 70 megawatts under development for its AZ Sun program.

APS' AZ Sun program received approval of the Arizona Corporation Commission in 2010. APS' other two AZ Sun projects, a 15-megawatt installation at Luke Air Force Base and an 18-megawatt project in Gila Bend, are both scheduled to come online in 2011.

SunEdison, a MEMC Electronic Materials subsidiary, is a leading worldwide solar energy services provider. SunEdison makes large-scale solar generation a reality for utilities worldwide.

Phoenix, Arizona-based Pinnacle West Capital Corporation provides electricity services in the state of Arizona, through its subsidiaries. The company is involved in the generation, transmission, and distribution of electricity from coal, nuclear, gas and oil, and renewable resources.

Pinnacle West's subsidiary, APS, is Arizona's largest and longest-serving electric utility. It serves more than 1.1 million customers in 11 of the state's 15 counties.

Pinnacle West currently has a short term Zacks #3 Rank, which supports our long term Neutral recommendation.

 
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