Nikola Corporation has secured an electric rate schedule with Arizona Public Service Company (APS) that will allow the accelerated development of hydrogen-based fueling solutions for the transportation industry.

By facilitating low-cost production of hydrogen, the Arizona Corporation Commission’s (“ACC”) approval of this rate schedule aims to reach for the curtailment of greenhouse gases in the transportation sector, while also providing benefits to key constituents via novel grid-balancing solutions.   

The agreement by the ACC provides Nikola with a competitive electric rate specifically designed for the production, processing, and dispensing of hydrogen. According to Nikola, this will support, among other things, enabling a zero-emission heavy-duty freight corridor along the Interstate-10 freeway between Los Angeles and Phoenix. The company estimates that under the rate structure, it will be able to deliver hydrogen at market leading prices and within the ranges required for Nikola to offer competitive lease rates for its trucks customers.

“Nikola values the joint efforts of APS and the ACC to enable competitive electrolytic hydrogen production,” said Nikola CEO Mark Russell. “The approval of this special rate for hydrogen production is critical for advancing the future of zero-emissions transportation and building a hydrogen economy.” 

The agreement reflects value that results from the curtailment flexibility that Nikola’s hydrogen production facilities are expected to provide to the electrical grid. These facilities will be configured to respond to the needs of the grid, for example by reducing Nikola’s energy consumption from the electric grid during heatwaves. This agreement will encourage Nikola to deploy capital within the state, increase electric load relating to hydrogen production, and further develop and employ a highly skilled and well-educated workforce.

“Through this agreement, Nikola is assured a reliable and competitively priced source of electricity that will allow us to commence the development of hydrogen production facilities to serve the fueling needs of our truck customers,” added Pablo Koziner, Nikola president of energy and commercial. “The agreement sets an important precedent in showcasing that innovative operational solutions can be developed for the economic production of hydrogen that maximize benefits to all stakeholders.”

Moving forward, Nikola will work with APS to finalize site selection and interconnection requirements to establish its first hydrogen production facility in Arizona. 

“For decades, hydrogen has been a promising, but elusive, source of clean energy for both the transportation and power sectors. We simply haven’t done enough to bring hydrogen to the mainstream,” stated Chairwoman Lea Márquez Peterson. “As we begin to enter a new energy economy, however, I want to ensure that we take all steps necessary to promote Arizona’s gradual and innovative move towards decarbonization. By supporting this application, we are doing exactly that.  Let’s make our great state the nation’s epicenter of hydrogen production, processing, and fueling, and let’s have Arizona serve as a model to other states about clean energy innovation.”