Arizona Public Service expects peak demand to rise 60% by 2041, plans coal use extension

Arizona Public Service (APS) forecasts its peak electricity demand will increase by about 3.4% annually over the next 15 years, reaching more than 14.5 gigawatts (GW) by 2041, according to Utility Dive.

This projected peak is nearly 60% higher than the current record peak of approximately 9.2 GW set in August. APS attributes this growth primarily to expanding industry and data center activity.

Annual retail electricity sales are expected to more than double, rising from about 34,200 gigawatt-hours (GWh) in 2025 to approximately 80,600 GWh in 2041, driven by population growth and increased economic activity.

To manage risks from high demand and large customer loads, APS has implemented measures including minimum demand contracts, collateral requirements, and early exit fees, as detailed in its integrated resource plan filed with regulators.

The utility plans to add up to 29,000 residential customers annually in the near term, with overall customer growth anticipated between 1.5% and 2.5% per year through 2030.

APS intends to continue operating the Four Corners coal plant beyond its initially planned 2031 retirement, potentially extending operations to 2038 to save customers nearly $1 billion, while emphasizing that reliability remains a priority.