Oversight panel approves switching 2 Arizona power plants from coal to natural gas

PHOENIX (AZFamily) — The Arizona Corporation Commission gave its approval for the switch at the Tucson Electric Power (TEP)-owned plant in Springerville and the Salt River Project (SRP)-owned Coronado plant in St. Johns in a unanimous vote.

The plants’ future was in doubt because previous federal rules would have forced them to close in the next six years. Closing them would have meant losing a significant amount of power and many local jobs, officials said.

“These plants are cornerstones of their local communities, and once converted to natural gas, will become a key pillar of long-term grid reliability versus being seasonally operated generating stations,” Commissioner Kevin Thompson said in an email.

TEP owns only two of the four units in Springerville, but the other owners contract with TEP to operate the power plant. TEP said it wants natural gas-fired boilers for units 1 and 2 only.

A natural gas pipeline is required, and that is expected to be completed by 2029, with conversion of the two units to be finished by the first quarter of 2030. TEP said in July that the transformation will reduce carbon emissions by 40%.

The plant’s units 1 and 2 faced retirement dates of 2027 and 2032, respectively, and it would have cost $450 million in upgrades to keep them running past the closure dates and to meet EPA guidelines. Those costs would have been paid by ratepayers.

But the commission said the conversion from coal-fired boilers to natural gas-fired boilers will cost an estimated $170 million.

“The conversion of these plants will result in a dramatic reduction in emissions, an increase in the performance and efficiency of the plants, increase the lifespan of the plants, preserve quality jobs, maintain significant revenues for local communities, and is the most cost-effective way to maintain grid reliability,” Thompson said.

SRP previously approved converting the Coronado plant from coal to natural gas in June 2025. The conversion is expected to be done by late 2029 and to reduce emissions, SRP officials said.

SRP said its Coronado conversion will cost $1.1 billion through 2045, but that’s about $300 million cheaper than building a brand-new natural gas facility. It also costs less than switching to long-lasting lithium-ion batteries, which would have cost roughly $2.3 billion.

The Coronado plant supplies about 10% of SRP’s peak demand, producing enough electricity to power more than 150,000 homes.

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