APS Announces New Solar Power Plant, Among World’s Largest

Power Station Will Provide Renewable Electricity to About 70,000 APS Customers

PHOENIX--(BUSINESS WIRE)--Arizona Public Service Co. (APS) today announced plans for one of the world’s largest solar facilities – a 280-megawatt (MW) concentrating solar power (CSP) plant to be built 70 miles southwest of Phoenix, near Gila Bend, Ariz.

“This is a major milestone for Arizona in our efforts to increase the amount of renewable energy available in the United States”

The Solana Generating Station will produce enough energy to serve 70,000 APS customers when operating at full capacity. The plant will be built by Abengoa Solar Inc., and is scheduled to provide renewable energy beginning in 2011. Spanish for “sunny place,” Solana will not emit greenhouse gases and will provide APS with more solar electricity per customer than any utility in the U.S. The facility also would be the largest solar power plant in the world if in operation today.

“APS is committed to making Arizona the solar capital of the world and bringing affordable renewable energy to all our customers,” said APS President Don Brandt. “The Arizona Corporation Commission has challenged Arizona utilities to be leaders in renewable energy, and we are responding aggressively.”

Arizona Gov. Janet Napolitano praised APS today at an event announcing plans for the project. “This is a major milestone for Arizona in our efforts to increase the amount of renewable energy available in the United States,” the Governor said. “Arizona is leading the way in protecting our world for future generations through combating climate change, fighting for air quality and much more. This plant will offer Arizonans a clean and efficient source of energy.”

Brandt said APS chose Abengoa Solar because of its extensive experience constructing, owning and operating solar power plants. Abengoa Solar deploys CSP technologies across the world, including large-scale facilities under construction or development in the U.S., Spain, Algeria and Morocco.

Solana will employ proven, state-of-the-art technology that can both produce and store energy during the day, and then provide that energy for use by APS customers across periods of peak demand. APS will purchase 100 percent of the plant’s energy output, pending approval from the Arizona Corporation Commission. The value of the produced energy will be about $4 billion over 30 years.

Unlike traditional solar-photovoltaic plants, which use direct sunlight to produce electricity, concentrating solar power uses the sun’s heat. Parabolic mirrors track the sun and focus solar energy on a heat transfer fluid. Once heated, the liquid converts water into steam, which turns the plant’s turbines to create electricity. This technology allows the plant to produce more energy for customers than a traditional solar power plant which only produces electricity when exposed to direct sunlight.

Solana Generating Station will create about 1,500 construction jobs and, when completed, will employ about 85 highly-skilled technicians. APS and Abengoa Solar estimate the project will bring more than $1 billion in economic benefits to the state of Arizona.

“We are pleased to locate this facility in Arizona and to work with APS. Our partnership is based on a bold commitment to power the future with clean, affordable solar energy,” said Abengoa Solar CEO Santiago Seage. “In addition to possessing 300 sunny days a year, Arizona provides a business climate that encourages collaboration and the types of technology and innovation required to build a project of this scale.”

Within the last 90 days, APS has announced two major solar projects. The Company recently announced that it has joined a multi-state consortium of southwestern utilities that have an interest in contracting for a separate 250-MW solar power plant. Should that project proceed to completion, APS customers will receive a portion of the energy from the joint development project, as well as all of the energy from the Solana facility.

The new solar plants, along with other renewable energy facilities, provide APS with an increasingly diverse array of energy resources. In total, these will help APS meet the Renewable Energy Standard set by the ACC in November 2006. One of the most progressive in the nation, the Standard calls for Arizona’s regulated utilities to obtain at least 15 percent of their total electricity sold from renewable energy sources by 2025.

APS currently provides its customers with 131.5 MW of renewable energy, enough to power more than 37,000 homes. With the addition of Solana, APS will provide enough renewable energy to serve 100,000 homes. As APS’ largest source of renewable energy, Solana will more than triple the Company’s renewable energy resources. APS’ green energy portfolio includes wind, geothermal and solar energy.

About Abengoa Solar

Abengoa Solar (www.abengoasolar.com) develops and applies technologies to generate clean electricity from the sun. Abengoa Solar is part of Abengoa, a technology company that applies innovative solutions to ensure sustainability. It is quoted in Spain, and with over 20,000 employees, is present in more than seventy countries through its five business units: Solar, Bioenergy, Environmental Services, Information Technologies and Industrial Engineering and Construction (www.abengoa.com).

About APS

APS, Arizona’s largest and longest-serving electricity utility, serves about 1.1 million customers in 11 of the state’s 15 counties. With headquarters in Phoenix, APS is the largest subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).