11/04/2026
APS wants coal plant open until 2038. Other owners want out
Arizona Public Service Co. may extend the life of its Four Corners coal plant due to increased energy demand.
Several minority owners of the plant, including Tucson Electric Power, plan to exit their shares by 2031 as scheduled.
The potential closure of the plant raises concerns about significant job losses and negative economic impacts on the local community.
Facing increased energy demand, Arizona Public Service Co. is considering whether to keep its last coal plant running longer than planned. But some of the minority owners of the plant aren't on the same page.
Arizona Public Service Co. owns 63% of the energy generated by Four Corners Generating Station. The Salt River Project, Public Service Co. of New Mexico, Tucson Electric Power Co., and Navajo Transitional Energy Co. own the remaining power generated by coal-fired plant in northwestern New Mexico.
APS announced earlier this year that it had reached a new fuel agreement with Navajo Mine operator Navajo Transitional Energy Co. that would allow operations until 2038, seven years longer than planned. An APS official declined to provide specific contract details but said the agreement reduces fuel prices and allows for operational "flexibility."
Some of the owners are still committed to exiting the plant in 2031, regardless of plans to extend its lifespan. At least 20% of the plant's shares belong to utilities planning to divest their remaining coal resources in the next five years.
For the owners still planning to exit in 2031, Energy and Policy Institute research and communications manager Stephanie Chase said they may have other resources under development or different renewable energy commitments.
“I would wager that the other owners have made a calculation for their planning processes and what they’re projecting for demand, that it’s a safer bet for their customers to exit the facility,” Chase said.
What would divestment look like?
It's unclear who might pick up unwanted shares, and at what cost. But it's not the first time an owner has wanted out.
In 2013, APS bought Southern California Edison's 48% share of two Four Corners units for $182 million. Utility officials argued then, as APS does now, that buying the California utility's shares would be cheaper than investing in new energy sources. A 2013 press release estimated that the average residential bill would increase by roughly $2 per month under APS' proposal to recoup the purchase costs.
Years later, Public Service Co. of New Mexico sought to abandon its shares early, after investing millions in the plant. The utility proposed selling the shares to Navajo Transitional Energy Co. for $1, and paying $75 million to release the utility from fuel purchase obligations.
But the move to transfer its ownership to the Navajo Transitional Energy Co. and have stakeholders absorb the $75 million cost was ultimately blocked by state regulators.
Stephen Fischmann, a former New Mexico Public Regulation Commission member, said the proposed transfer was controversial among environmental groups, which feared it could prolong the plant's operations. He said a new deal to offload the shares could take several different forms, "as long as there's somebody willing to pick up the generation."
Mike Eugenis, APS' resource planning director, said he couldn’t speak for the other utilities that own the plant.
“They have an obligation under the contract,” Eugenis said. “What they choose to do with that obligation is yet to be seen.”
What do other owners plan to do?
Joseph Barrios, spokesperson for Tucson Electric Power, said the southern Arizona utility still plans to exit the plant in 2031, but it is “unknown” how TEP would dispose of its 7% share of the active units. The utility plans to phase out all coal generation by 2031. It is converting two units at Springerville Generating Station from coal to natural gas by 2030.
Four Corners Power Plant is also the last remaining coal resource for Public Service Co. of New Mexico. PNM owns 13% of the plant, or 200 megawatts.
Like TEP, New Mexico’s largest electric utility plans to shed its shares in 2031. The state has aggressive clean energy targets for its utilities.
“If operations are extended beyond that time, we would have the ability to negotiate the sale or transfer of our minority ownership interest with a third party on behalf of customers,” wrote spokesperson Kai Porter in an email to The Arizona Republic.
The Salt River Project owns 10% of Four Corners. SRP spokesperson Jennifer Schuricht wrote in an email to The Arizona Republic that the utility is uncertain whether it will keep its ownership past 2031. The utility had planned to retire all its coal ownership by 2031 and planned for the plant's retirement in its most recent resource forecast.
"SRP is evaluating several factors, including load growth, 2035 Corporate Goals, and the cost and availability of replacement capacity before determining whether we will continue our participating in the plant past 2031," Schuricht wrote.
The utility is converting Coronado Generating Station and its unit at Springerville Generating Station to natural gas by 2029. SRP also has a contract with the Tri-State Generation and Transmission Association, which owns another Springerville unit, for 100 megawatts of capacity through 2036.
SRP also has some coal resources in Colorado, including half the output of the Hayden Generating Station's Unit 2, scheduled to retire in 2027, and 29% of two units at Craig Generating Station. One of those units was retired in 2025, but required to stay operational by a March emergency order issued by the U.S. Department of Energy. The second unit is expected to retire in 2028.
The Navajo Transitional Energy Co., which owns a 7% share of the plant, has expressed support for continued operations but declined to state whether it would consider buying additional ownership in 2031.
Taxes and royalties paid by the mine and generating station make up about a third of the tribal nation’s general fund.
A spokesperson for the company, whose sole shareholder is the Navajo Nation, wrote that the company remained “committed” to the plant and the Navajo Mine. The company would not provide a named spokesperson.
"We welcome this step by APS," said Tim McLaughlin, Navajo Transitional Energy board chairman in a statement at the time. "It helps extend the FCPP, in turn bringing more reliability to the electric grid in our region. Moreover, the decision will help continue NTEC's strategy to provide the Navajo Nation with economic sovereignty, including jobs and vital revenue to the Navajo Nation and its people."
Longtime energy professional and consultant Amanda Ormond, executive director of ASU’s Just Energy Transition Center, said coal communities experience financial and social impacts when a plant like Four Corners closes.
The closure of Navajo Generating Station caused “huge harm” to the Navajo Nation and the Hopi Tribe, she said. Utility spending can fall, school districts can lose funding and some families may leave the area, sending a ripple effect through the community.
While renewable energy or repowering a plant with natural gas can make up some tax revenue and jobs, Ormond said, it’s not necessarily equal. She sees the need to better address closures.
"There's loss of a job, obviously, but that impacts the whole family, not just the worker," Ormond said. "And then the spending of that wage doesn't roll around the community."
APS is planning to keep the Four Corners coal plant open until 2038, rather than 2031. But some part owners plan exit.
