Arizona Public Service (APS), City of Mesa, Salt River Project (SRP), Tucson Electric Power (TEP) and UniSource Energy Services announced commitment plans for the Transwestern Pipeline 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.
The project is expected to cost approximately $5.3 billion, including $600 million of Allowance for Funds Used During Construction (AFUDC), and is supported by significant long-term commitments from investment-grade customers. Energy Transfer will launch an open season later this quarter and expects the remaining capacity to be fully subscribed upon completion of the open season. Depending on the final results of the open season, the project could be efficiently expanded to accommodate additional demand.
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.
