Lea Márquez Peterson

Chairwoman Lea Márquez Peterson Statement on Clean Hydrogen Production in Arizona

PHOENIX - Arizona is on the cusp of becoming the epicenter of clean hydrogen production.

On October 7, 2021, the U.S. Department of Energy announced $20 million in federal funding to produce clean hydrogen in Arizona from nuclear power. The announcement involves the construction of an electrolyser near Palo Verde Nuclear Generating Station and the generation of approximately 200 MWh of zero-carbon electricity at natural gas plants operated by Arizona Public Service Company (APS) using hydrogen as a cleaner alternative to natural gas. The technical assessment will allow APS to study the feasibility of converting combustion turbines at natural gas power plants to run on hydrogen, which will play a critical role in the transition to clean energy as more variable and intermittent renewable energy resources, such as wind and solar, are added to the grid. (DOE Announcement)

I applaud the DOE’s announcement and recognition that Arizona is primed to be the nation’s leader in clean hydrogen production and innovation.

On January 12, 2021, the Arizona Corporation Commission approved a special rate agreement between APS and Arizona-based hydrogen semi-truck manufacturer Nikola Corporation (Nikola), which pairs the production of clean hydrogen with the supply and demand curves of the grid. The special contract and innovative rate structure will help Nikola accelerate development of hydrogen in Arizona, while the price signals will help APS balance the grid and spur additional economic development in the state. (Nikola Announcement)

By tying the production of clean hydrogen to the economics of the grid, we have the potential to drive down costs for both the utility and transportation sectors.

Arizona cannot become an effective leader in solar energy production and export without having the tools it needs to cost effectively store and transport that energy for later use. It’s not enough that Arizona may have the most sunshine days. It also needs reliable, dependable renewable power during peak hours, which clean hydrogen can provide. If excess solar can be cost-effectively converted into clean, zero-carbon hydrogen during the day, and existing natural gas plants can be cost-effectively converted to run on hydrogen when energy demands are highest--then pursuing clean hydrogen may be the answer to solving Arizona’s complex energy challenges.

I support the development of clean hydrogen in Arizona as a way to transition to a clean energy economy and position Arizona as a national leader.

Arizona Corporation Commission

1200 W. Washington Street

Phoenix, AZ 85007


Corporations Division

1300 W. Washington Street

Phoenix, AZ 85007


Tucson Office (Walk-ins only)

400 W. Congress Street

Tucson, AZ 85701