Coal-to-Gas Conversions Approved for Two Arizona Power Plants

Why It Matters

The conversions lower compliance costs and emissions while securing reliable baseload power, positioning Arizona’s grid for a smoother transition to cleaner energy sources.

Key Takeaways

• ACC approves gas conversions for two Arizona coal plants.
• TEP conversion cost estimated $170‑$200 million, operational by 2030.
• SRP’s Coronado conversion part of $1.1 billion 20‑year plan.
• Conversions avoid $450 million EPA upgrades, saving ratepayers.
• Gas switch cuts emissions, extends plant life, supports grid reliability.

Pulse Analysis

The Arizona Corporation Commission’s recent approvals signal a decisive shift in the state’s energy mix, as two legacy coal facilities move toward natural‑gas retrofits. At Springerville, Tucson Electric Power and its partners are investing roughly $170‑$200 million to replace coal burners with gas turbines, a timeline that aligns with a new pipeline slated for 2029. Meanwhile, Salt River Project’s $1.1 billion Coronado project embeds the conversion within a broader two‑decade strategy, reflecting a regional trend of leveraging existing infrastructure to meet tightening environmental standards without building entirely new plants.

Financially, the gas conversions present a compelling alternative to the $450 million EPA‑mandated upgrades that would have been required to keep the coal units operational. By opting for gas, utilities sidestep hefty capital expenditures and avoid passing those costs onto ratepayers. The projects also generate modest savings compared with constructing fresh natural‑gas stations—SRP estimates a $300 million differential—while preserving hundreds of skilled jobs in rural communities that depend on plant operations for economic stability.

Beyond economics, the switch to natural gas delivers measurable environmental benefits, cutting carbon dioxide, sulfur dioxide, and mercury emissions dramatically. The cleaner fuel mix enhances plant efficiency and extends operational life, bolstering grid reliability amid growing renewable penetration. As Arizona’s utilities integrate more solar and storage, the retrofitted gas units will serve as flexible back‑up resources, smoothing intermittency and supporting the state’s broader clean‑energy objectives. This approach exemplifies how legacy assets can be repurposed to bridge the gap between coal phase‑out and a fully renewable grid.