Fortis Utility Tucson Electric Power Sets Target to Reduce Carbon Emissions by 80 Percent by 2035
June 26 2020 - 9:00AM
Fortis Inc. ("Fortis" or the "Corporation") (TSX/NYSE: FTS) today
announced that its utility Tucson Electric Power ("TEP") in Arizona
has set a target to reduce carbon emissions by 80% by 2035. Details
of the clean energy targets are included in the utility's 2020
Integrated Resource Plan ("IRP" or the "Plan") which will be filed
today with the Arizona Corporation Commission.
Key elements of the Plan
- 2,457 megawatts ("MW") of new wind and solar power systems,
including 457 MW that will be coming online over the next year
- 1,400 MW of new energy storage systems
- A proposal to ramp down and ultimately retire TEP's two units
at the coal fired Springerville Generating Station ("SGS") in 2027
and 2032. The timeline would allow TEP to reduce the plant's
workforce through attrition while providing time for the company to
help the local community minimize the impact of the units'
retirement.
- Eliminating the use of surface water for power generation and a
70% reduction in groundwater use
- Continued support for energy efficiency programs to reduce
usage and peak power demands
These changes will result in TEP avoiding more
than 50 million tons of carbon dioxide (CO2) emissions over the
next 15 years.
"TEP is accelerating its transition to cleaner
energy resources through a cost-effective plan that supports
reliable, affordable service from increasingly sustainable
resources," said David Hutchens, CEO of TEP and Chief Operating
Officer of Fortis. "We'll be reducing carbon emissions at a pace
that places us at the forefront of global efforts to combat climate
change."
Eliminating coal-fired
resourcesThe Plan proposes reducing and ultimately
eliminating its use of coal-fired resources. That transition is
already underway, with the retirement of more than 600 MW of coal
generation by June 2022 through recent and scheduled closures at
the Navajo and San Juan Generating Stations. TEP also receives
power from two coal-fired units at the Four Corners Generating
Station that are scheduled to close in 2031.
Concern about climate change and other
environmental impacts, low natural gas prices and other factors
created an opportunity to evaluate the long-term use of SGS Units 1
and 2. Though reliable, the usage of the coal-fired units will be
reduced and the units eventually retired. Energy from SGS Units 1
and 2 will be replaced with increased energy from wind farms, solar
arrays and energy storage systems.
Clean Energy ExpansionThe Plan
calls for a dramatic expansion of renewable energy resources,
including some systems that are already under development. TEP is
working to complete two large New Mexico wind farms and a local
solar plus storage project that will more than double its
community-scale clean energy resources by next year.
The IRP also calls for enough new wind and solar
generating capacity to provide more than 40% of the company's power
in 2030, more than 60% by 2033 and more than 70% by 2035. The
expansions coincide with the planned addition of energy storage
systems, which are projected to cost significantly less after 2030
than they do today.
Limiting Global WarmingTEP's
CO2 emission reduction goal was developed in partnership with the
University of Arizona's Institute of the Environment with input
from a diverse group of customers, community leaders, local
government representatives and environmental advocates, and is in
line with the 2015 Paris Agreement to limit global warming to below
2 degrees Celsius. The Plan would reduce CO2 by 80% compared to
2005 levels.
Plans for coal reduction at the SGS are subject
to the Arizona Corporation Commission's approval of a modified plan
for timely recovery of the plant's remaining value. TEP has not yet
determined what rate changes it may request or the timing of any
such request.
"The Plan being set by TEP is commendable as it
takes the necessary steps to deliver cleaner energy to its
customers," said Barry Perry, President and CEO, Fortis Inc. "The
ambitious targets are significant and impactful in terms of the
overall Fortis energy mix. Upon retirement of TEP's coal-fired
generation, Fortis will have a coal-free generation mix."
For more details about TEP's 2020 Integrated
Resource Plan, visit tep.com/resource-planning.
About FortisFortis is a
well-diversified leader in the North American regulated electric
and gas utility industry, with 2019 revenue of $8.8 billion and
total assets of $57 billion as at March 31, 2020. The Corporation's
9,000 employees serve utility customers in five Canadian province,
nine U.S. states and three Caribbean countries.
Fortis common shares are listed on the TSX and
NYSE and trade under the symbol FTS. Additional information can be
accessed at www.fortisinc.com, www.sedar.com or www.sec.gov.
A .pdf version of this press release is available
at: http://ml.globenewswire.com/Resource/Download/d1e82a1e-1218-42c6-ab6b-fefa8bb7dd6d
For more information please
contactInvestor Enquiries:Ms. Stephanie AmaimoVice
President, Investor RelationsFortis
Inc.248.946.3572investorrelations@fortisinc.com
Media Enquiries:Ms. Karen McCarthyVice
President, Communications and Corporate AffairsFortis
Inc.709.737.5323media@fortisinc.com
Forward Looking
InformationFortis includes forward-looking information in
this media release within the meaning of applicable Canadian
securities laws and forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995
(collectively referred to as "forward-looking information").
Forward-looking information reflects expectations of Fortis
management regarding future growth, results of operations,
performance and business prospects and opportunities. Wherever
possible, words such as anticipates, believes, budgets, could,
estimates, expects, forecasts, intends, may, might, plans,
projects, schedule, should, target, will, would and the negative of
these terms and other similar terminology or expressions have been
used to identify the forward-looking information, which includes,
without limitation: TEP's 2035 emission reduction target and
details of its Integrated Resource Plan including new planned wind
and solar power systems, scheduled retirements of coal-fired
generation, reduction in groundwater use and associated benefits of
implementing the Plan.
Forward-looking information involves significant
risks, uncertainties and assumptions. Certain material factors or
assumptions have been applied in drawing the conclusions contained
in the forward-looking information. These factors or assumptions
are subject to inherent risks and uncertainties surrounding future
expectations generally, including those identified from time to
time in the forward-looking information. Such factors or
assumptions include, but are not limited to: no material impact
from the COVID-19 pandemic; reasonable outcomes for regulatory
proceedings and the expectation of regulatory stability; the
successful execution of the five-year capital plan; no material
capital project and financing cost overrun; and sufficient human
resources to deliver service and execute the capital plan. Fortis
cautions readers that a number of factors could cause actual
results, performance or achievements to differ materially from the
results discussed or implied in the forward-looking information.
For additional information with respect to certain risk factors,
reference should be made to the continuous disclosure materials
filed from time to time by the Corporation with Canadian securities
regulatory authorities and the Securities and Exchange Commission.
All forward-looking information herein is given as of the date of
this media release. Fortis disclaims any intention or obligation to
update or revise any forward-looking information, whether as a
result of new information, future events or otherwise.
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