Jul 22 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - James Gilbert The Sun, Yuma, Ariz.

Arizona Public Service Company, which provides electricity to the Yuma area, says it intends to build two new generating plants in the Yuma area by the summer of 2008 to meet the area's growing power needs.

"We believe we have the short-term resources that are sufficient enough to meet the area's power needs over the next few years, but we will need to build additional resources soon," said APS spokesman Alan Bunnell, in a phone interview from Phoenix. "It's our responsibility to stay ahead of the growth."

Bunnell said if the new generating plants are not built and operational by then, the company will be operating in Yuma at a power deficit during peak demand hours.

"Our demand will be greater than our resources by then," Bunnell said. "That is why it is so important to get the approval to either build new resources or secure them from a third party."

APS currently has an application before the Arizona Corporation Commission seeking to build two new 48 megawatt electric generating plants in Yuma, which because of its transmission constraints, is one of the company's load pockets.

"These would only typically be used during the hottest part of the day when the demand is the highest," Bunnell said. "The ideal location appears to be adjacent to the Yucca power plant."

Commissioner Bill Mundell called the possibility of not having enough power for peak use hours in two years a fairly urgent situation.

"There is no question we need new electrical generation in Yuma," said Mundell. "What we are looking at is what will be cheapest for the rate-paying customer."

Mundell said APS has asked the commission to issue a decision on their application by October, which will still give the company enough time to have the generators built and made operational.

According to APS, Yuma's demand for electricity is expected to grow on average of 4.7 percent per year from 2006 to 2010, compared to 3.9 percent for the rest of the APS service area.

"It depicts that Yuma is growing faster than the rest of the APS's service area, which is the second-fastest growing area in the country," Bunnell said.

Historically, Yuma's power needs grew 6.3 percent per year from 2000 to 2005, by comparison to 3.9 percent for the rest of the APS service area. Bunnell said as the area continues to grow, Yuma's power demand is expected to increase 70 percent over the current decade.

"Growth is happening very quickly throughout Arizona and it is requiring APS to develop new long-term power supplies and Yuma is one of the prime areas expected to need additional electricity," Bunnell said.

Other rapidly growing areas in Arizona with increasing power demands include Prescott, Buckeye and Casa Grande.

In a trend that Bunnell said he expects will continue well into the future, Yuma's electricity peak is expected to grow at 20 megawatts per year. In the southwest, a megawatt provides enough energy to power 250 homes, according to Bunnell.

Yuma, which has a maximum load serving capability of 518 megawatts, including its reserves, exceeded its forecasted peak of electricity use by four megawatts, reaching 390 megawatts on July 14.

"Exceeding your forecasted peak doesn't mean you're running out of power," said APS Southwest Division Manager Jim Valenzuela. "We have a reserve plan to secure any additional electricity we may need that will meet any requirement past our forecast."