APS Plans to Convert Retired Cholla Coal Plant to Natural Gas

APS plans to convert two retired coal-fired units at Arizona's Cholla Power Plant to natural gas, adding 380 MW of generation capacity by 2029 while repurposing existing energy infrastructure.

(P&GJ) — Arizona Public Service (APS) plans to convert two retired coal-fired units at its Cholla Power Plant in northeastern Arizona to natural gas, a project expected to add approximately 380 MW of generating capacity by 2029 while repurposing existing energy infrastructure.

The utility said the conversion will allow the Joseph City facility in Navajo County to continue serving Arizona's growing electricity demand after its coal operations were fully retired in March 2025.

The Cholla Power Plant began operating in 1962 and was gradually phased out over the past decade as coal-fired units were retired to comply with federal environmental regulations. APS said reusing the existing site, transmission infrastructure and other facilities will provide a cost-effective way to add dispatchable generation to its portfolio.

Once complete, the repowered plant is expected to generate enough electricity to serve approximately 61,000 homes.

APS said natural gas generation will complement its existing mix of nuclear, renewable energy and battery storage by providing around-the-clock electricity and responding quickly during periods of peak demand.

"Repurposing the Cholla Power Plant for natural gas allows us to build on that legacy, supporting reliable, affordable energy for our customers while continuing to invest in the communities who have long supported this plant," said Johnny Penrod, APS vice president of generation.

Construction is expected to begin in 2028, with commercial operations targeted for 2029. The project remains subject to permitting and regulatory approvals.

APS said the conversion also is expected to provide an economic boost to the region, supporting hundreds of construction jobs and several dozen permanent positions once the plant enters service.

Navajo County Supervisor Jason Whiting welcomed the proposal, saying the project would strengthen the local economy while supporting Arizona's growing energy needs.

"APS's decision to convert Cholla into a natural gas plant will strengthen our local economy, create jobs and support our schools," Whiting said. "Even more importantly, it will help power our state with reliable, affordable energy."

APS serves approximately 1.5 million homes and businesses across Arizona and is a subsidiary of Pinnacle West Capital Corp.