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Pinnacle West (PNW) Arm to Cut Emission, Aims Carbon Neutrality

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Pinnacle West Capital (PNW - Free Report) has announced that its unit Arizona Public Service Company (“APS”) will provide electricity to its customers generated from clean sources. APS has entered into a 20-year power purchase agreement with Leeward Renewable Energy (Leeward) to purchase 200 megawatts (MW) of wind energy output from their two New Mexican Aragonne Wind facilities. By the end of 2021, APS will be able to channelize the clean power generated from Leeward wind farms to its customers.

Long-Term Goals

APS aims to add more renewable and clean energy sources in its electricity generation portfolio over the long term and aims for carbon neutrality by 2050. It is currently working toward its target of having 45% of electricity generation portfolio in renewable energy by 2030 and achieve 100% clean energy target by 2050.

Pinnacle West’s unit aims to achieve this renewable target through focusing on clean sources like natural gas, energy storage solutions that support development and usage of more renewable sources, as well as modernization of the electric grid that supports more renewables and lowers the possibility of outages.

Focus on Renewable Energy Sources

Per a recent report from The U.S. Energy Information Administration (“EIA”) a transition of the utility operators toward clean energy sources is quite evident. Per EIA, electricity generation from renewable energy sources will jump from 18% in 2019 to 20% in 2020 and to 22% in 2021. The increase in renewables’ share is total generation is the result of planned additions to wind and solar generating capacity.

The increase in the usage of renewable source to generate electricity is due to rise in awareness about pollution and usage of new technology, making power generation from renewable sources cheaper and reliable. The large battery storage projects being developed ensure that the power generated from renewable sources is available to customers 24x7.

Other utilities like Xcel Energy (XEL - Free Report) , Duke Energy (DUK - Free Report) and DTE Energy (DTE - Free Report) , among others, have chalked out plans to achieve net-zero emissions within 2050.

Zacks Rank

Pinnacle West currently carries a Zacks Rank # (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Price Performance

In the past 12 months, shares of the company have gained 7.1% compared with the industry’s 2.3% growth.

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