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PacifiCorp tells Arizona Public Service it will retire Cholla unit 4 by year-end

PacifiCorp is firming up plans to shutter its share of the Cholla coal-fired power plant near Joseph City, Ariz., by the end of 2020.

PacifiCorp notified Arizona Public Service Co., or APS, on Dec. 27, 2019, that it will retire the 380-MW Cholla unit 4 because operating it beyond 2020 is no longer economical when compared to other energy resources, PacifiCorp spokesman Spencer Hall said in an email.

APS is the operator for the Cholla plant and owns units 1, 2 and 3 of the facility, although unit 2 was retired in 2015.

The Cholla plant was built in 1981, and PacifiCorp bought unit 4 from APS in 1990. The unit accounts for nearly half of the 767-MW Cholla plant's entire existing capacity. In addition to economic pressure from cheaper generation sources, Hall said PacifiCorp's decision to retire the unit was prompted by increased customer demand for energy from low-emission generating sources.

The U.S. Environmental Protection Agency's decisions on regional haze compliance also may have weighed against Cholla unit 4's continued operation. Initially, the agency required the installation of expensive emissions controls on the unit, and it later approved alternatives for PacifiCorp to convert it to burn natural gas instead of coal or retire the unit by April 2025, according to PacifiCorp's integrated resource plans, or IRPs, from 2017 and 2019.

In its 2019 IRP, the Berkshire Hathaway Energy subsidiary PacifiCorp said it planned to retire the unit between the end of 2020 and the start of 2023.

However, Hall said PacifiCorp is coordinating with APS to minimize impacts to the Pinnacle West Capital Corp. subsidiary's employees as the transition begins to safely remove the unit from service by the end of this year.

PacifiCorp's latest IRP action plan called for finalizing decommissioning plans, confirming joint Cholla ownership obligations, completing required regulatory notices and filings, amending or closing out existing permits, contracts and other agreements, including those for transmission interconnection and services, and coordinating with state and local stakeholders, Hall said.