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- Arizona’s largest electric utilities, APS and SRP, set new energy demand records during extreme heat on July 9.
- These records exceed previous highs set in 2024 and mark the third consecutive year of record energy use.
- Utilities are planning for increased future demand through a mix of renewable and traditional energy sources.
The state’s largest electric utilities broke energy demand records this week amid soaring temperatures in Phoenix.
Arizona Public Service Co., which serves 1.4 million people statewide, reported that it hit a new peak between 5 p.m. and 6 p.m. on July 9. Its customers used an all-time high of 8,527 megawatts as daily temperatures hit 118 degrees at Sky Harbor International Airport — the hottest day of the summer so far.
One megawatt of energy is enough for the utility to serve about 160 average homes simultaneously.
Salt River Project hit its own new record just hours beforehand, between 3 p.m. and 4 p.m. It delivered 8,324 megawatts of energy to its 1.1 million customers. The nonprofit utility can serve an average of 225 homes with a megawatt of power.
The figures represent notable increases — about 4% and 1%, respectively — over the previous highs set by both utilities on Aug. 4, 2024. Neither saw an abnormal number of power outages at peak, according to data from Find Energy.
It marks the third consecutive year that the state’s two largest utilities have recorded all-time energy usage highs, a trend that reflects the state’s rapidly increasing energy needs. Power demand is projected to spike in coming decades amid continued population growth, hotter summers, the arrival of power-hungry data centers and the rise of advanced manufacturing.
The latest peak was even higher than APS officials had forecasted. In April, the utility told state regulators that it would need at least 8,491 megawatts to meet demand — slightly lower than the record-breaking figure. It had planned to hold an additional 1,620 megawatts in reserve.
SRP had estimated a summer peak of 8,426 megawatts — just over its recent high.
Most utilities had anticipated another year of record-high electric demand. They told regulators that they were prepared to produce a combined total of 24,000 megawatts during any given peak period.
How will utilities meet the demand?
Deals were flying at APS’ headquarters as energy usage built to its record-breaking peak.
A team of three energy traders were juggling the demand, ordering power generating stations to turn on and off as they bought and sold power across the western United States.
The group is tasked with trading energy in real time, seeking deals that ensure grid reliability and cheapen the cost of serving electric to the utility’s customers. They work alongside other traders focused on longer-term deals and forecasts to keep customers’ lights on.
They are at the heart of how the utility will meet future demand — and how it navigated its new record peak on July 9.
“If I were trying to describe it to somebody who wasn’t here, I would say it was slow and methodical,” said David Stark, who manages long-term and day-ahead trading for APS. “Each action they took, every decision they made was being orated. When one person received a phone call, they were putting that on speaker so that everybody could hear, because the way that power was trading, and the speed at which it was trading, and the reaction of the grid to the usage of the customers, was such that we needed a collaborative approach.”
The state’s largest utilities forecast energy needs decades out and create plans to meet that demand. APS predicts it will need more than 13,000 megawatts of energy to serve peak demand by 2038. SRP anticipates needing 14,000 megawatts of capacity to serve summer peaks by 2035.
The utilities’ current plans focus on leaning into a mix of fossil fuel and zero-carbon power sources. APS’ blueprint calls for dramatically upping solar and wind generation, as well as its battery storage capabilities. The utility aims to transition its power mix to be entirely clean and carbon-free by 2050.
SRP wants to cut carbon emissions by 82% from 2005 levels over the next decade, and it hopes to reach net-zero by 2050. Its roadmap called for investments in renewable power sources, as well as bringing about 2,000 megawatts of new natural gas online.
The two utilities — alongside Tucson Electric Power Co., the third-largest electric provider in the state — are also exploring ways to provide more power through the expanded use of nuclear energy.
Key details of the proposal remain unclear, and any new nuclear facility appears years down the road. The utilities said they would look at small, advanced nuclear reactors, as well as large ones.
It’s unclear how recent federal changes might impact the power providers’ overall sustainability goals. President Donald Trump recently pushed a massive tax and spending bill through U.S. Congress that could cripple the clean energy industry by sharply rolling back tax credits for some renewable forms of power.
Still, Stark said sustainability is increasingly on traders’ minds. Teams like his are likely to be influential as power providers continue working to meet the state’s energy needs.
“Safe, reliable, economical and clean,” he said, listing the order of factors that traders consider while making power deals. “We can prioritize what types of resources to buy.”
Sasha Hupka covers utilities and technology for The Arizona Republic. Reach her at sasha.hupka@arizonarepublic.com or 480-271-6387. Follow her on X: @SashaHupka. Connect with her on LinkedIn: Sasha Hupka. Follow her on Instagram or Threads: @sashahupkasnaps. Follow her on Bluesky: @sashahupka.bsky.social.