October 7, 2026 - Less than two years ago, Arizona Electric Power Cooperative received millions of dollars from the federal government to fund renewable energy and phase out the use of coal.

The co-op is now receiving additional federal funding, and the coal turbine will remain in operation.

The Department of Energy awarded $21 million in funding to the Apache Generating Station to modernize the plant’s remaining coal turbine.

The plant is located in Cochise County, south of Wilcox and east of Benson.

Plant was set for retirement

The Apache Generating Station is the last remaining coal plant in southern Arizona and one of three left in the state.

It was set to be retired by the end of next year, but after the investment by the Trump administration, the turbine will continue operating.

Curt Coccodrilli, the Acting Assistant Secretary for the U.S. Department of Energy’s Hydrocarbons and Geothermal Energy Office, said the funding is part of the Trump administration’s efforts to modernize the American coal industry.

“Everything that we do demands power. If we want to remain competitive, we need more power. The best way to do it is to keep that which can still work, working,” Coccodrilli said.

Grant to fund reliability upgrades

Coccodrilli said the $21 million grant will be used to increase energy reliability and capacity for AEPCO’s half a million customers.

The co-op previously said it was phasing out coal production at the Apache Generating Station by 2027. The co-op is now set to restore and upgrade the 195 milliwatt unit.

“Our job with that turbine is to stabilize that plant, optimize it, grow it, and make it more efficient so we can get out that electricity where it’s needed most,” Coccodrilli said.

The co-op also said it planned to reduce emissions 70% by 2031. AEPCO’s CEO, Patrick Ledger, declined to speak on camera but said the co-op is committed to that goal, adding that the investment will allow it to generate more energy at a lower cost.

Coal share of Arizona’s energy supply

According to the Energy Information Administration, coal production accounts for only 8% of Arizona’s energy supply. Power from gas and renewables together make up nearly 65%.

Even as coal production declines across the U.S., Coccodrilli said it remains a valuable energy source.

“I don’t see it being phased out whatsoever. It keeps the miners mining, it keeps families sustaining jobs, and economic development in all those mining communities around the Southwest,” Coccodrilli said.

Coccodrilli expects the project to create several hundred jobs during construction. It is unclear how the project will impact utility rates, but AEPCO’s CEO expects that keeping the turbine running will mean lower prices for customers in the future.

The EPA announced last month it was rolling back greenhouse gas emission limits on power plants. Coccodrilli said any regulations put in place as the turbine is upgraded would be up to the EPA.