APS Plans to Repower Cholla Power Plant with Natural Gas to Support Arizona’s Growing Energy Demand
Arizona Public Service (APS) has unveiled plans to transform its retired Cholla Power Plant in Joseph City, Navajo County, Arizona, into a modern natural gas-fired generating facility, marking a significant new chapter for one of the state’s most recognizable energy assets. The project is designed to help meet Arizona’s rapidly increasing electricity demand while preserving existing infrastructure, supporting local communities, and maintaining reliable, affordable power for customers across the state.
If approved and completed as planned, the repowered facility is expected to begin commercial operations in 2029. The project involves converting two former coal-fired generating units into natural gas-fired units, allowing APS to extend the productive life of the Cholla site after the retirement of its coal operations earlier this year.
The announcement reflects APS’s broader strategy of maintaining a balanced and diversified energy portfolio capable of supporting Arizona’s economic expansion while ensuring electric system reliability during periods of high demand.
A New Future for a Historic Power Plant
The Cholla Power Plant has served Arizona’s electric grid for more than six decades. Originally commissioned in 1962, the facility became a cornerstone of electricity generation for northern Arizona, supplying dependable power to homes, businesses, schools, hospitals, and industries throughout the region.
For decades, the plant operated as one of the state’s major coal-fired generating stations, contributing significantly to Arizona’s growing economy and supporting thousands of residents through reliable electricity generation.
However, changing environmental regulations and evolving energy policies led to the gradual retirement of the facility’s coal-fired units over the past decade. Federal environmental requirements accelerated the transition away from coal generation, with the final coal unit officially ceasing operations in March 2025.
Rather than allowing the site to remain idle, APS has chosen to invest in its future by converting part of the facility to operate on natural gas. The decision allows the utility to preserve valuable infrastructure already in place, including transmission lines, electrical connections, and other critical equipment that would otherwise require significant investment if a new facility were built elsewhere.
Meeting Arizona’s Rising Electricity Demand
Arizona continues to rank among the fastest-growing states in the United States, with strong population growth, expanding commercial development, manufacturing investments, and increasing electrification driving higher electricity consumption.
Utilities across the state are preparing for significant increases in energy demand over the coming decades, particularly during Arizona’s extreme summer months when air conditioning use reaches its highest levels.
APS believes repowering the Cholla facility will provide an efficient and cost-effective solution to help address these future energy requirements.
Once operational, the converted plant is expected to contribute approximately 380 megawatts (MW) of generating capacity to Arizona’s electric grid.
That level of generation would be sufficient to supply electricity to approximately 61,000 Arizona homes, providing additional capacity during periods of peak demand while enhancing overall grid reliability.
Unlike renewable energy sources that depend on weather conditions, natural gas generation can operate continuously and can rapidly adjust output as electricity demand changes throughout the day.
Building on an Established Legacy
APS officials emphasized that the Cholla Power Plant has long represented more than simply an electricity generating facility.
According to Johnny Penrod, APS Vice President of Generation, the plant has played an essential role in supporting the communities of Joseph City, Holbrook, Navajo County, and northeastern Arizona for decades while serving as an important part of Arizona’s statewide electric infrastructure.
Penrod explained that converting the existing facility to natural gas allows APS to preserve the site’s long-standing contribution to Arizona’s energy system while adapting it to meet today’s changing energy landscape.
The project also demonstrates the company’s continued investment in communities that have supported the facility throughout its operational history.
Rather than abandoning the site following the retirement of coal operations, APS intends to continue utilizing the location as a major energy resource for many years to come.
Leveraging Existing Infrastructure
One of the primary advantages of the proposed conversion is the ability to utilize much of the infrastructure already available at the Cholla site.
Developing an entirely new power generation facility often requires years of permitting, land acquisition, transmission construction, and major infrastructure investments.
By repurposing the existing power plant, APS can take advantage of established transmission corridors, electrical substations, water infrastructure, and transportation access already serving the location.
This approach reduces project costs, shortens development timelines, and minimizes the environmental footprint associated with constructing a completely new generating station.
Existing grid connections also make it easier to integrate the new natural gas units into Arizona’s electric system without requiring extensive transmission expansion.
The Role of Natural Gas in APS’s Energy Portfolio
APS views natural gas as an important component of a diversified electricity generation strategy.
While renewable energy sources such as solar and wind continue to expand across Arizona, utility officials note that dispatchable generation remains essential for maintaining electric reliability.
Natural gas plants can operate around the clock, providing dependable electricity regardless of weather conditions or time of day.
They are also capable of rapidly increasing or decreasing power output in response to fluctuations in customer demand.
This operational flexibility makes natural gas particularly valuable when renewable generation declines because of cloud cover, nighttime conditions, or reduced wind speeds.
The technology also complements battery energy storage systems, which help balance renewable energy production but have finite storage durations.
APS expects the repowered Cholla facility to strengthen overall grid stability while supporting continued renewable energy growth.
Supporting a Diverse Energy Mix
The proposed conversion aligns with APS’s broader strategy of maintaining a balanced energy portfolio rather than relying on a single generation source.
Today, the utility generates electricity from multiple resources, including nuclear power from the Palo Verde Generating Station, natural gas, coal, solar energy, wind generation, and battery energy storage systems.
Maintaining this diversified portfolio allows APS to respond to changing customer demand, fuel market conditions, weather events, and seasonal variations while ensuring reliable electric service.
The addition of repowered natural gas generation at Cholla is expected to further strengthen this balanced approach as Arizona’s energy requirements continue to expand.
Economic Benefits for Northern Arizona
Beyond its contribution to electricity generation, the Cholla conversion project is expected to provide substantial economic benefits for communities across northeastern Arizona.
Construction activities associated with repowering the facility are anticipated to create hundreds of temporary jobs, supporting contractors, skilled trades, suppliers, and local businesses during the development phase.
Once commercial operations begin, the plant is expected to provide several dozen permanent positions responsible for operating and maintaining the generating facility.
These long-term employment opportunities will contribute to economic stability in Joseph City, Holbrook, and surrounding communities.
The project is also expected to generate continued tax revenues that support schools, public services, and local government operations throughout Navajo County.
Additional economic activity generated through ongoing plant operations may further benefit restaurants, retail businesses, service providers, and regional suppliers.
Local Leaders Welcome the Announcement
The proposal has received strong support from local officials who have long advocated for preserving economic activity at the Cholla site following the retirement of its coal-fired operations.
Navajo County Supervisor Jason Whiting praised APS’s decision, describing the conversion as an important opportunity for both the local economy and Arizona’s broader energy future.
Whiting noted that converting Cholla into a natural gas facility is expected to strengthen the regional economy, create new employment opportunities, support local schools through tax revenues, and continue supplying reliable and affordable electricity to customers across Arizona.
His comments reflect the importance of the project for communities that have historically depended on the power plant as both a major employer and an economic driver.
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