Arizona Utilities Work to Lock in Critical Natural Gas Delivery to Power Growth

Energy providers leverage new desert southwest pipeline project to support reliability and clean energy efforts

Today, Arizona Public Service (APS), City of Mesa, Salt River Project (SRP), Tucson Electric Power (TEP) and UniSource Energy Services announced commitment plans for Transwestern Pipeline's Desert Southwest expansion project. This new natural gas pipeline will help maintain year-round regional energy reliability by transporting natural gas from the Permian Basin in West Texas to Arizona by late 2029 once construction is completed.

APS and SRP each reviewed multiple proposals and have independently executed agreements with Transwestern to provide customers with the best combination of reliability and affordability to meet future energy demand. The agreements give the utilities priority delivery of low-cost natural gas to support Arizona's rapid growth and the integration of clean energy technologies to the electric grid. The City of Mesa, TEP and UniSource are finalizing negotiations with Transwestern. TEP and UniSource expect to move forward with an agreement prior to the open season solicitation process later this year.

Strengthening Arizona's Energy Future

"Arizona's energy needs are growing drastically, which is why it is so important for the state's utilities to anticipate and prepare for the future," said Kevin Thompson, Chairman of the Arizona Corporation Commission. "For years, Arizona residents and the state's economy have benefitted from one of the most reliable energy grids in the country. I applaud APS, City of Mesa, SRP, TEP and UniSource for their commitment to maintaining this reliability and helping to secure Arizona's energy dominance."

Why does the state need more natural gas pipeline capacity?

With more people and businesses moving to Arizona, energy demand is rising at an unprecedented rate, and utilities are investing in infrastructure to serve this growth. Today, all existing interstate pipelines serving Arizona are fully subscribed. There is sufficient natural gas supply in the Permian Basin, but additional pipelines are needed to serve Arizona power plants and maintain reliability in all seasons.

How will customers benefit from this project?

On hot summer and cold winter days, the pipeline would fuel critical natural gas facilities that boost the energy grid to help keep customers safe and comfortable, and businesses operating. Each utility conducted its own thorough evaluation and negotiation process before identifying Transwestern Pipeline's Desert Southwest expansion project as the top option for its customers. As the utilities continue to add cost-effective clean energy to their portfolios, natural gas is needed to maintain strong reliability across the region including when solar and wind resources aren't producing and battery energy storage isn't available.

Serving Communities with Resilient Resources

"As Arizona continues to grow, so must the energy infrastructure that powers it. This new pipeline represents a long-term commitment to reliability, resilience and affordability," said Ted Geisler, APS President and CEO. "By securing additional access to natural gas, we're ensuring our grid has the flexibility and strength to meet customer needs – even on the hottest summer days – while supporting the economic momentum that makes Arizona such a great place to live and do business."

"This pipeline marks a pivotal advancement in long-term infrastructure planning, reinforcing the foundation for a resilient and prosperous future for Mesa and the State of Arizona," said City of Mesa Mayor Mark Freeman.

"SRP is working to at least double the number of generating resources on its power system in the next 10 years to meet increasing energy demand in the Phoenix metropolitan area," said Jim Pratt, SRP General Manager and CEO. "Natural gas resources play a key role in maintaining reliable and affordable power as we pursue an all-of-the-above approach that also includes adding wind, solar and storage to our energy mix."

"Natural gas resources will play a crucial role in providing customers with safe, reliable energy as Arizona's economy grows," said Susan Gray, President and CEO of TEP and UniSource. "New natural gas resources will support stable, affordable service for our communities as emerging technologies create new ways to reduce the carbon intensity of Arizona's energy supply."

Arizona Public Service: APS serves 1.4 million homes and businesses in 11 of Arizona's 15 counties, safely delivering reliable, affordable electricity. APS maintains a diverse range of energy resources, including nuclear from Palo Verde Generating Station, natural gas, coal, solar, wind and energy storage – a mix that's about 54% clean. With 140 years of experience serving Arizona, APS is the main subsidiary of Pinnacle West Capital Corp. (NYSE:PNW).

Salt River Project: SRP is a community-based, not-for-profit public power utility and the largest electricity provider in the greater Phoenix metropolitan area, serving approximately 1.1 million customers. SRP provides water to about half of the Valley's residents, delivering more than 244 billion gallons of water (750,000 acre-feet) each year, and manages a 13,000-square-mile watershed that includes an extensive system of reservoirs, wells, canals and irrigation laterals.

Tucson Electric Power: TEP serves more than 450,000 electric customers in Southern Arizona. TEP and its Tucson, Arizona-based parent company, UNS Energy Corporation, are subsidiaries of Fortis, Inc., a leader in the North American regulated electric and gas utility industry.

UniSource Energy Services: UniSource delivers natural gas service to about 170,000 customers in Coconino, Mohave, Navajo, Santa Cruz and Yavapai Counties and electric service to about 105,000 customers in Mohave and Santa Cruz Counties. UniSource and its Tucson, Arizona-based parent company, UNS Energy Corporation, are subsidiaries of Fortis, Inc.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250806147342/en/

Media Contacts:

APS: Yessica del Rincon, [email protected], 480-209-8513

City of Mesa: Ana Pereira, [email protected], 617-501-8287

SRP: Jennifer Schuricht, [email protected], 480-625-5070

TEP and UniSource: Joseph Barrios, [email protected], 520-884-3725