The Arizona Power Authority (Authority), a body corporate and politic of Arizona, was formed as a result of federal legislation (Boulder Canyon Project Act of 1928) that allocated a portion of power produced from the Boulder Canyon Project (Hoover Dam and Power Plant). Hoover power first became available in 1936, and at that time, the State had not developed an infrastructure and methodology to receive and distribute this allocated power. Subsequently, in 1944, the state of Arizona’s Legislature created the Authority (as set forth in Title 30, Arizona Revised Statutes) charging the Authority with the responsibility of acquiring and marketing Arizona’s share of Hoover power.
In 1945, the Authority entered a federal contract with the Bureau of Reclamation (Reclamation) for Arizona’s share of the Hoover resource and received its first delivery of power in 1951. In 1949, the Authority entered a contract with the Reclamation for an allocation of federal power from Davis Dam. The Davis contract was terminated in 1962, at which time Reclamation entered agreements directly with Arizona preference customers, rather than through the Authority. During the late 1940s, the Authority entered into agreements with Reclamation for transmission of its power allocations over the federal transmission system. In anticipation of load growth and increased power requirements, the Authority also entered into agreements with Arizona Public Service to purchase thermal power from their Saguaro plant and with Reclamation for increased transmission capacity over the federal transmission system. In August of 1977, Western Area Power Administration (Western) became the federal agency responsible for the transmission of federal power and the administration of federal power contracts.
In the late 1970s, Western began developing a new marketing plan for Hoover power to be effective upon expiration of the original 50-year contract (May 1987). The Hoover Power Plant Act of 1984 (1) authorized the Hoover Uprating Program, the development of visitor facilities, and fixed the amount of contributions to the Lower Colorado River Basin Development Fund for financial assistance of the Central Arizona Project (CAP) and other projects, (2) renewed the Authority’s original Hoover allocation (Schedule A contingent capacity and associated firm energy), (3) allocated the long-term Hoover capacity and associated firm energy resulting from the Uprating Program (Schedule B contingent capacity and associated firm energy), and (4) allocated excess energy (Schedule C energy).
The CAP is a major irrigation project for central and southern Arizona. To aid in the repayment of the CAP, the 1984 Hoover Power Plant Act also provides for the assessment of .0045 cents per kilowatt-hour on energy generated at Hoover (effective June 1, 1987) and Parker-Davis Project (effective June 1, 2005) sold in Arizona. Title II of this Act also directed Western to implement a Conservation and Renewable Energy program.
The Authority presently has an Electric Service Contract dated June 1987 with Western to receive Arizona’s allocation of Schedule A and B power and C energy from Hoover Dam. The Authority markets and schedules this entitlement to 39 power customers in the state of Arizona consisting of cities and towns, irrigation and electrical districts, and the Central Arizona Water Conservation District.
The Authority has worked effectively with both publicly-owned and privately-owned utilities in making Hoover Power Plant hydro power available to all major load centers throughout Arizona at the lowest possible cost. It has also provided leadership in meeting the many challenges brought about by the constant changes in the electric utility industry.