APS Four Corners Power Plant

PHOENIX - Arizona Public Service (APS) has filed its 2026 Integrated Resource Plan (IRP) with the Arizona Corporation Commission, reflecting the Company’s focus on providing customers with reliable, affordable electricity as business and residential energy demand grows at record levels.

APS evaluated a range of possible scenarios and resource options to develop a strategy to meet demand while keeping customer costs low. The plan also reflects APS's long-standing approach that growth will pay for growth, holding large energy users, including data centers, responsible for the costs and risks associated with serving their energy needs.

The company files an IRP every three years, relying on extensive data modeling and analysis to evaluate how to meet customer demand during the next 15 years.

“Reliability is nonnegotiable,” said Mike Eugenis, APS Director of Resource Planning. “We developed this IRP by evaluating a wide range of scenarios over the next 15 years to ensure APS is prepared to serve customers who count on us for reliable and affordable service throughout Arizona.”

How fast is demand growing?

Growth in electricity demand was a central theme of APS’s previous IRP, and that growth has accelerated. APS forecasts that annual energy use will double by 2041 from 2026 levels and has seen continued expansion even while preparing the latest plan.

The IRP includes projections for demand growth based on weather, population, economic activity and energy consumption. The forecasts account for uncertainty about how these conditions may change.

APS projects a peak demand of more than 14,500 megawatts (MW) in 2041, with a 3.4% annual growth rate. Peak demand is the time when customer energy use is at its highest. The company’s current record peak was set on Aug. 2, 2026, when customers used 9,166 MW from 6-7pm.

Not only is the peak demand increasing, but the amount of energy used throughout the year is rising. Annual retail sales are forecast to double to about 80,600 gigawatt hours (GWh) in 2041, representing a 5% annual growth rate. Annual retail sales were about 34,200 GWh in 2025.

A balanced mix to meet near-term growth

In the next few years, APS will integrate thousands of megawatts of solar, wind and battery energy storage. By 2030, the company expects to have approximately 6,000 megawatts of battery storage on its system, helping balance renewable resources and providing energy during periods of high demand.

Alongside these historic levels of renewable energy and storage, the analysis found on-demand resources, including natural-gas generation, continue to play an important role in supporting a balanced energy mix and meeting customer demand. APS will add natural-gas resources through the new Desert Sun Power Plant, expansion of the Saguaro Power Plant and conversion of the retired Cholla Power Plant from a coal-burning resource. The IRP analysis found that these resources provide value across a wide range of future scenarios.

“A reliable electric system requires a diverse mix of resources that can serve customers under a wide range of conditions and all hours of the day, including periods when solar, wind and battery resources may not be available to meet customers’ needs,” said Eugenis.

The IRP also includes substantial expansion of the transmission system to connect new resources across Arizona. APS will continue evaluating emerging and future technologies, including the potential for new nuclear generation, geothermal energy and additional energy storage. Investments will depend on their ability to provide customer value, reliability and affordability.

The IRP is a guide, not a fixed blueprint. The near-term actions in the plan, particularly those in the next three years, reflect projects and decisions with greater certainty. Recommendations for resources in the years beyond reflect the best information available today about customer energy demand, technology, fuel prices, construction costs, resource availability and other conditions. APS continuously adapts its plans as conditions change. APS issues all-source requests for proposals to identify the best fit, most reliable and affordable resources available.

Four Corners Power Plant extension saves $1 billion

One conclusion in the 2026 plan is that continued operation of Four Corners Power Plant beyond 2031 could save customers close to $1 billion compared with replacing the plant with new resources.

As an existing, around-the-clock generator, Four Corners can continue supporting the grid while new generation, fuel and transmission infrastructure is developed. The plant is on the Navajo Nation in New Mexico and operates under a lease that requires retirement no later than 2038. The company will continue to evaluate the appropriate time to cease operations between 2031 and 2038, with the decision depending on customer needs, economics and other factors evaluated through future planning processes.

Growth pays for growth

APS is planning for increased electricity use from homes, businesses and large customers, including data centers. The company is ensuring large, energy-intensive commercial customers do not shift growth-related costs to residential or smaller business customers.

APS’s approach is consistent with the principles outlined in the APS Pledge for Responsible Growth: safeguarding reliability, protecting customer rates and preserving grid capacity. Large customers will cover the costs and financial risks associated with serving their energy needs. These protections support Arizona’s continued economic growth while helping preserve reliable service and keep costs low.