* APS to pay $294 million for SCE stake in plant
* APS to retire old coal units after buying SCE stake
* Old coal units to retire due environmental rules
By Scott DiSavino
April 19 Arizona utility regulators approved
Arizona Public Service's (APS) $294 million plan to buy part of
the Four Corners coal-fired power plant in New Mexico from
Southern California Edison.
A spokesman at APS told Reuters Thursday this is a big step
closer to APS's acquiring the bigger Four Corners stake but a
couple of items still needed to be completed before the deal can
The spokesman said APS still needed approval from the U.S.
Federal Energy Regulatory Commission (FERC) and a coal contract
extension with the mine that provides fuel to the plant.
APS hoped to complete the purchase by the end of the year.
In March, California utility regulators approved Southern
California Edison's (SCE) previously announced sale of its
interest in Four Corners to APS, which would end the California
utility's ownership in coal-fired generation.
The California Public Utilities Commission (CPUC) required
SCE, a unit of California energy company Edison International
, to sell its interest in coal-fired power plants by
SCE owns a 48 percent share in the 770-megawatt Units 4 and
5 at Four Corners, which is operated by APS. APS is a unit of
Arizona energy company Pinnacle West Capital Corp.
SCE agreed to sell its share in Four Corners to APS in
There are five units at Four Corners. Units 1, 2 and 3 are
wholly owned by APS.
Units 4 and 5 are 48 percent owned by SCE, 15 percent by
APS, 13 percent by PNM Resources' Public Service Co of
New Mexico, 10 percent by Salt River Project, 7 percent by El
Paso Electric and 7 percent by UniSource Energy's
APS has said it plans to shut Units 1, 2 and 3 if it
acquires SCE's stake in Units 4 and 5.
APS said it would shut Units 1, 2 and 3 because they are
older and smaller than Units 4 and 5 and are therefore not
economically practical to upgrade to meet the new, more
stringent federal emissions requirements proposed by the
Environmental Protection Agency (EPA) over the past few years.
Energy companies have announced plans to shut more than
30,000 MW of coal-fired generation in the United States,
primarily because of the new EPA regulations, weak power market
conditions and natural gas prices near 10-year lows making
efficient gas plants cheaper than older coal units.
See FACTBOX on coal fired retirements.
Units 1 and 2 at Four Corners are each 170 MW and entered
service in 1963. Unit 3 is 220 MW and entered service in 1964.
Units 4 and 5 are 770 MW each and entered service in 1969 and