APS Plans Coal-to-Gas Conversion at Cholla Plant, Eyes 2029 Start
Arizona Public Service will convert two units at its retired Cholla Power Plant to natural gas generation, adding up to 380 MW of capacity, Utility Dive reports.
Market Impact
The Cholla Power Plant in Navajo County, Arizona, once supplied around 1 GW of power at peak generation before its coal units were phased out over the last decade under federal environmental mandates, with final retirement completed in March 2025. APS said earlier evaluations of a gas conversion did not pencil out economically, but rising demand has changed the calculus.
“Given Arizona’s increasing demand for around-the-clock energy and the long timelines for adding new generation, the conversion has proven to be a viable option to deliver reliable, affordable energy to APS customers,” the utility said. APS projects electric sales growth of 4% to 6% annually through 2027, driven largely by large load additions, and the Arizona Corporation Commission said in April that APS expects peak demand from large customers to hit roughly 13.1 GW this year. Johnny Penrod, APS vice president of generation, said the conversion lets the utility build on Cholla’s decades-long role serving Joseph City, Holbrook, Navajo County and northeastern Arizona while “leveraging existing transmission lines and infrastructure.” Construction is expected to start in 2028 with a target in-service date of 2029, pending formal permitting and public comment through open houses, phone and email.
What It Means for Subcontractors
- Mechanical and electrical contractors should track APS’s permitting filings over the next 18 to 24 months, since the utility said the project must clear formal permitting before construction begins in 2028.
- Firms with experience in brownfield power plant retrofits have an edge here: APS is reusing existing transmission infrastructure at Cholla rather than building greenfield, which favors subs who can work within legacy plant footprints and interconnection points.
- Piping, welding and combustion turbine specialists should watch for EPC or subcontract packages tied to the 2028 construction start, given the compressed timeline from permitting to a 2029 in-service target.
- Local trades in Navajo County, Joseph City and Holbrook should engage now through APS’s public comment process (open houses, phone, email) to position for site labor and staging needs once the project scope firms up.
- Subs serving other Arizona utilities should note this as a signal: with large-load growth pushing peak demand toward 13.1 GW, conversions of retired coal assets may beat new-build gas plants to market, meaning conversion RFPs could arrive faster than traditional greenfield generation bids.
