Arizona’s coal future: winding down or full steam ahead?

Key Points:

• Arizona coal plants are facing pressure to stay open despite plans to transition to natural gas

• Clean energy debate is now central to the upcoming Arizona Corporation Commission race

• Utility rate increase requests threaten to put affordability and environmental goals at odds

Sitting in the Oval Office on June 4, President Donald Trump announced a new round of federal funding for U.S. coal power plants looking to modernize. 

An Arizona generating station was on the list, despite previous assurances from the plant’s owner that it would be coal-free by 2027.

Apache Generating Station, owned by the Arizona Electric Power Cooperative, is set to receive more than $53 million in federal and non-federal dollars to modernize the plant’s lone coal-fired turbine. In 2025, the administration also granted the plant an exemption from Environmental Protection Agency rules related to toxic pollutant emissions. 

AEPCO did not respond to repeated requests for comment about whether the new federal funding will change its September 2024 commitment to transition the Apache station to natural gas by next year. 

Still, the Cochise County coal plant funding is the latest talking point in the larger story of Arizona’s clean energy transition. It follows state regulators’ repeal of renewable energy requirements, legislative opposition to solar and wind developments and diminished emission reduction commitments from some utility companies.

Coal has become a defining issue in this year’s Arizona Corporation Commission election, where two seats on the all-Republican board are up for grabs. The incumbent commissioners Kevin Thompson and Nick Myers are facing challenges from both sides, with a Republican opponent driven by their rebuke of Trump’s coal priorities and two Democrats propelled by their support for clean energy policies.

And as utility companies seek double-digit rate increases despite complaints from residential customers struggling to afford high utility bills, energy could become a headache for candidates running in top-of-the-ticket races. 

Coal has fallen out of favor in the U.S. over the past several decades, due to increasing environmental regulations and aging infrastructure. Utility companies and their regulators began favoring cheaper and more environmentally friendly options like solar and wind, leading the U.S. to stop constructing new coal plants in 2013. 

Aside from the Apache Generating Station, Arizona is home to two other coal power plants: Coronado Generating Station, which is jointly owned and operated by Salt River Project and Tucson Electric Power, and Springerville Generating Station, which is owned and operated by SRP. Both plants are expected to be fully transitioned to natural gas by 2031. 

Both companies are also expected to exit ownership of Four Corners Generating Station, a coal plant operated by Arizona Public Service on Navajo Nation land in Fruitland, New Mexico. However, APS has since backed out of its commitment to decommission the plant by 2031.

APS’ Chief Executive Officer Ted Geisler testified in the company’s ongoing rate case that it still does not have answers regarding the future of Four Corners over a year after it announced the 2031 exit could be delayed to 2038. 

“We are trying to be transparent that, given growth on the grid and the need to ensure reliable service, we can no longer commit to an exit in 2031,” Geisler testified on May 19. “But we are continuously assessing what, if any, extension of Four Corners (there) needs to be.”

Geisler said APS is in talks with the Navajo Nation about selling the plant to its commercial energy company or potentially transitioning the plant to natural gas to preserve jobs for the community surrounding Four Corners. 

APS closure of its coal-fired Cholla Power Plant in 2025 sparked backlash from Arizona Republicans who demanded the plant stay open to avoid job losses and further the Trump administration’s coal energy agenda — and it even spurred a primary challenge in the Arizona Corporation Commission race.

Thompson and Myers defended the APS decision to close Cholla during an April 2025 ACC meeting, noting that coal generation has become prohibitively expensive for the state’s utility companies. A few months later, Republican Reps. Ralph Heap and David Marshall announced their bid to unseat the two commissioners.

Heap lost his running mate to another elected position this spring, but he told the Arizona Capitol Times that he is still in the fight to support the president’s coal agenda in the Grand Canyon State.

“I would consider encouraging the utilities to expand the coal plants, not close the coal plants,” Heap said. 

The Arizona Free Enterprise Club, a group widely believed to have recruited Heap and Marshall for their primary bid, is also pushing APS to keep Four Corners online as a coal plant. The group did not respond to a request for comment, but it recently published a report arguing APS could save ratepayers $21.9 billion dollars through 2038 by keeping the coal plant online and ramping up natural gas production instead of prioritizing renewable resources.

For their part, Myers and Thompson are more focused on natural gas and an “all-of-the-above” approach to Arizona’s energy portfolio. They also note that the commission has a relatively passive role in the integrated resource planning process by which the state’s utilities determine which sources of energy will help them affordably meet customer demand.

“They’re bringing (the plan) to us to show us what it is,” Myers said. “We don’t get to approve that planning, but we can acknowledge that they did their homework.”

Some observers would argue that the state Corporation Commission is signalling its preference for certain types of energy resources by repealing its Renewable Energy Standard and Tariff Rules. The rules required Arizona’s largest electric utility companies to get 15% of their energy from renewable sources, a goal APS, TEP and UNS Electric met or exceeded and will now not be expected to maintain. 

Clara Pratte, the executive chair of the renewable energy development company Navajo Power, is one of two Democrats running to unseat Myers and Thompson this year. She and her running mate, Arizona State University scientist Jonathon Hill, are focused on affordability and environmental impact, two issues she says are incompatible with coal generation. 

“There’s something to be said about just trying to get the lowest rate possible,” Pratte said. “And in terms of coal, my hope is that people just realize not only is it economically not as feasible and sustainable, but environmentally and air quality-wise, it’s also not the best source of energy any longer for our communities.”

In late May, the two frontrunners in Arizona’s gubernatorial race traded barbs over the state of energy affordability for residential utility customers. While Gov. Katie Hobbs touted state programs she created aimed at providing bill-paying assistance and energy efficient upgrades to low-income households, her potential Republican challenger Congressman Andy Biggs cited APS’ 14% rate increase request as proof of costs increasing under her leadership.

The two candidates have decidedly different views on the future of energy in Arizona. Hobbs’ 2026 executive budget proposal suggested building a solar farm on land owned by the state government, and her Office of Resiliency released a State Energy Report focused on reducing barriers for solar and wind projects while imagining nuclear and geothermal energy as the baseload resources of the future.

Hobbs told reporters that she, like Myers and Thompson, prefers an “all-of-the-above” energy approach, arguing that Arizona cannot afford to eliminate both coal and natural gas in favor of renewables yet. 

Biggs celebrated the Trump administration’s announcement of new funds for Apache Generating Station’s coal turbine. 

“This administration continues to prove its commitment to an energy policy that utilizes all forms of energy, protects our country’s security, grows our national and states’ economies, and creates jobs for hard-working Americans,” Biggs wrote in a Facebook post. 

His campaign did not respond to questions about whether he would support APS’ decision to decommission Four Corners or whether he would advocate for new coal plants to be constructed in Arizona. 

Energy experts say that Democrats will face an uphill battle against coal even if they claim two seats on the currently all-Republican Corporation Commission and retain control of the Ninth Floor. But Pratte still insists now is the time for Arizona to make the clean energy leap.

“To say we’re going to use natural gas as a bridge, we’ve been saying that for what, 40, 50 years?” Pratte said. “At some point you have to incentivize the move, or being stuck in the inertia, it just becomes status quo.”