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Pinnacle West puts storage plans on hold after battery project explosion

Pinnacle West Capital Corp. Chairman, President and CEO Donald Brandt said Aug. 8 the company has put on hold planned investments in battery projects following an explosion at an Arizona Public Service Co. storage site in April.

"Discharge of the batteries has been completed and we have now begun a forensic analysis," said Brandt, who is also chairman and CEO of Arizona Public Service, or APS. "The review is progressing but will take time to complete."

The accident has led to a self-imposed temporary freeze on storage development at the Pinnacle West subsidiary.

"Because safety is our top priority, we will temporarily be delaying our investments in new battery storage resources to incorporate our warnings for this incident," said Brandt. "Accordingly, the request for proposals issued in April for 60 MW of storage on our existing solar facilities and a new 100-MW solar facility paired with 100 MW of battery storage have been put on hold."

Brandt reiterated the company's commitment to renewable energy and battery storage, saying that the company's post-accident policy is a "thoughtful and responsible pause to ensure we move forward in a safe and informed manner."

APS will still issue two requests for proposals to add up to 250 MW of wind generation to its portfolio no later than 2022 and 150 MW of solar power to its portfolio by 2021.

Pinnacle West has previously said it plans to add 950 MW of battery storage and solar assets by 2025.

At present, the company gets 4,929 MW of its 10,609 MW capacity from gas-fired generation and another 1,672 MW from coal-fired generation. That number will be reduced by 315 MW once the 2,250-MW Navajo plant, in which it has a 14% share, goes offline in December.

Brandt noted successes in the second quarter, including the completion of the planned refueling at Unit 1 of its Palo Verde project, and the completion of a modernization project at all five units of its Ocotillo power plant on time and on budget. He also addressed ongoing proceedings at the Arizona Corporation Commission.

Mild temperatures in the second quarter of 2019 contributed to lower earnings figures than the company saw for the same period in 2018, a change from the first quarter, when net income improved year over year.

In June, the Arizona Corporation Commission issued an order directing the company to file a base rate case with the commission by Oct. 31. The commission also recently "ordered APS to implement additional customer education and outreach programs," said Brandt.

The state regulatory body has been looking into several aspects of Pinnacle West's and APS's recent actions, investigating the subsidiary's past earnings and probing recent customer deaths that followed the suspension of service for unpaid bills.

"We temporarily stopped residential power disconnects following nonpayment," said Brandt. "Subsequently, the Arizona Corporation Commission issued a temporary rule imposing a statewide moratorium on disconnects through the warmest months into October."