Under terms of the agreement, TEP and UniSource Energy Services (UES) subsidiary UNS Electric have acquired the 550MW Gila River Power Station Power Block 3 from Gila River Power for $219m.
TEP will hold 413MW of its output, while the remaining will be acquired by UNS Electric.
TEP president and chief executive officer David Hutchens said: "This acquisition contributes to an evolving resource portfolio that will continue to provide reliable, affordable and sustainable energy for our customers for many years to come.
The Gila River Power Block 3 includes combined cycle technology to enhance fuel efficiency by capturing waste heat and using it to help generate additional electricity.
Hutchens said: "Our resource plan will result in a 25 percent reduction in carbon dioxide emissions by 2020 without compromising the affordability, safety or reliability of our service.’
The Gila River Power Block 3 acquisition is part of TEP’s aim to replace coal power and diversify its generation portfolio.
TEP intends to expand its renewable solar and wind resources as well as rely on cost-effective energy efficiency programs and evaluate new storage technologies to help manage the intermittent output of renewable resources.
Image: TEP seeks to significantly decrease its coal-fired generation capacity in coming years. Photo: Courtesy of John Kasawa/Freedigitalphotos.net.
