Guest ContributorA coalition of more than three dozen business, industry, and trade organizations led by the Arizona Chamber of Commerce & Industry submitted a joint letter to the Arizona Corporation Commission urging support for expanded natural gas infrastructure across the state.
The letter, whose signers include local chambers of commerce and associations representing industries as varied as hospitality, real estate, manufacturing, and agriculture, stresses that a balanced energy portfolio that includes natural gas is essential to protecting ratepayers and maintaining the state’s economic competitiveness.
“Reliable, affordable energy is critical to Arizona’s economic success,” said Courtney Coolidge, executive vice president of the Arizona Chamber. “Natural gas has long played a critical role in supporting our economic growth and quality of life. Our business community is united in the belief that if we’re going to meet the increasing demand for energy while avoiding the instability we’ve seen in other states, then we’ll need expanded pipeline and storage infrastructure.”
A growing state with growing energy demand
The coalition’s letter outlines the importance of natural gas to Arizona’s energy system, citing the resource’s role in preventing outages, ensuring grid reliability, and supporting diverse industries ranging from aerospace and data centers to hospitality and agriculture.
In 2013, natural gas accounted for 27% of Arizona’s electricity generation, but today it’s 46%. The state’s use is projected to grow sharply over the next decade.
Utilities like APS, SRP, and TEP each forecast major increases in electricity demand, with peak load expected to rise between 17% and 40%. The state’s largest natural gas utility, Southwest Gas, anticipates a 9% increase in throughput by 2030.
Natural gas: Reliable, affordable, dispatchable
Natural gas’ always-on capability makes it an ideal complement to the growing deployment of renewable energy sources. It also offers a cost advantage for ratepayers.
According to TEP, its 2023 Integrated Resource Plan found that portfolios including new natural gas generation were more cost-effective—by $355 million on a net present value basis—compared to portfolios that excluded it.
Residential customers also benefit. Homes using natural gas for heating, cooking, and clothes drying save more than $1,100 annually on energy bills, while commercial and industrial users nationwide have saved more than $500 billion over the past decade thanks to natural gas.
New infrastructure needed to keep pace
Arizona does not extract natural gas, so the state is entirely dependent on out-of-state supply and is currently served by Transwestern and El Paso Natural Gas pipelines. The letter to the commission from the business community coalition supports the development of a new interstate pipeline to keep pace with growing demand and ensure long-term reliability.
The groups also back the development of underground gas storage in the state, including El Paso Natural Gas Company’s proposed Arizona Energy Storage project, arguing it would add resiliency, help moderate seasonal price fluctuations, and safeguard against supply disruptions. During Winter Storm Uri in 2021, temporary storage measures saved Southwest Gas customers $1.5 million over just two days.
The letter also praises the ACC for its recent approval of new gas-fired generation projects, including SRP’s Coolidge Generating Station expansion, APS’ Sundance and Redhawk plant upgrades, and the new Bella Power Plant in Pinal County. The signers agree these decisions are essential to Arizona’s ability to meet future demand and to remain competitive with high-growth states like Texas.
“We’re proud to stand with partners across the state to support sound energy policy,” Coolidge said. “This is about protecting our economy, our communities, and our ability to welcome new investment and job creators to Arizona.”
In addition to the Arizona Chamber, the letter was signed by:
- Arizona Lodging & Tourism Association
- Arizona Manufacturers Council
- Arizona Restaurant Association
- Greater Phoenix Chamber
- Homebuilders Association of Central Arizona
- National Federation of Independent Business (NFIB)
- United Dairymen Association
Several regional chambers of commerce from across the state also signed, including from Buckeye, Mesa, Prescott Valley, Coolidge, Scottsdale, Tempe, and Tucson.
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