APS rolls back clean energy commitment

Arizona Public Service (APS) is reversing course on its landmark 2020 pledge to produce electricity with zero carbon emissions and be completely reliant on clean energy by 2050.

Why it matters: This marks a significant retreat from one of the power sector's most ambitious climate commitments — just as the Southwest is grappling with worsening heat, drought and climate-driven strain on the grid.

State of play: CEO Ted Geisler announced on a Wednesday earnings call that APS parent company Pinnacle West Capital Corp. is abandoning its "zero carbon" plan to instead aim to be "carbon neutral" by 2050.

• Under carbon neutrality, APS, the state's largest utility, would still emit carbon, but it would be offset by reducing emissions elsewhere.
• Zero-carbon means the 100% elimination of carbon emissions.
• Jill Freret, APS' director of resource integration and fuels, told 12 News Wednesday that the 2020 plans "were aspirational goals at the time."

Zoom in: In a Wednesday press statement, Pinnacle West said that meeting the energy needs of Arizona's growing population requires "the most reliable and cost-effective resources available to us."

• "Clean energy remains an important consideration for us," Geisler said, "but always with a focus on a balanced energy mix that best serves reliability and affordability."
• The company will seek opportunities to "support reliability" through other resources, including natural gas.
• APS will also scrap other shorter-term goals, including getting 65% of its energy from clean sources by 2030, the Arizona Republic reported.

Driving the news: APS also said Wednesday that the company — along with Salt River Project, Tucson Electric Power, UniSource Energy Services and the city of Mesa — would get natural gas starting in 2029 from a planned 600-mile pipeline that will extend from west Texas to the Valley.

• "It certainly has the potential to help support additional development and investment into Arizona," Court Rich, an attorney with Rose Law Group who specializes in energy and utility issues, told Axios.

What they're saying: Corporation Commissioner Nick Myers praised APS on X for "backing off their Green New Deal style policies."

The other side: Attorney General Kris Mayes and Bill Mundell, both former corporation commissioners, told Axios that increased reliance on natural gas will allow APS to seek rate increases to cover the costs of new plants.

• Mayes called it a "serious setback" to clean energy and a "betrayal of Arizonans by APS."

In response, APS spokesperson Yessica Del Rincon told Axios that the company is still committed to reducing carbon emissions over time, and that its carbon neutrality plan "aligns with other utilities, including our neighboring utilities in Arizona."

• She added that demand for energy grows with Arizona's population, and it would be irresponsible for APS not to plan for the challenges ahead.
• APS won't be paying for additional natural gas transportation until after 2029 when the new pipeline is in service, she said, and any subsequent costs to customers will be evaluated through the Corporation Commission's ratemaking process.

Editor's note: This story has been updated with comments from APS spokesperson