Chandler commits $14 million to power Intel expansion - SanTan Sun News SanTan Sun News

Chandler commits $14 million to power Intel expansion

July 22nd, 2021 development
Chandler commits $14 million to power Intel expansion

By Kevin Reagan
Staff Writer

Salt River Project and Chandler have entered into a special agreement to ensure Intel will have enough electricity to power the $20-billion expansion of its Ocotillo campus.

The city and SRP agreed last month to share some of the costs for extending a high-voltage transmission line through south Chandler to connect to the sprawling Ocotillo campus.

If approved by the Arizona Corporation Commission, the line will run from the Schrader substation near Ocotillo Road and Exeter Street to the Henshaw substation near Price and Germann roads. The route would run beneath Fulton Elementary School, snake around Snedigar Sports Complex, and cut through a housing subdivision before reaching the Intel.

Chandler will share in some of the costs by committing $14.5 million of the city’s funds for relocating utility lines that may interfere with the new route.

About half of the city’s $14-million share will be reimbursed through funds allotted by the SRP municipal aesthetics program, which annually disperses funds for municipalities’ utility infrastructure improvements.

Chandler plans to obtain grant funding to cover the remaining half of its cost for the transmission line.

“The city will also seek additional funding opportunities to offset the costs associated with the utility work through the state or other programs intended to help support public infrastructure projects required for semiconductor manufacturing,” a city memo states.

The goal of forging a deal with SRP is to facilitate one of Arizona’s biggest economic development projects, while still ensuring surrounding neighborhoods won’t see their streets uprooted with new infrastructure to support Intel’s growth.

Intel in March announced plans to build two new fabrication facilities at its south Chandler campus over the next three years.

The development will create 3,000 permanent high-tech, high-wage jobs; over 3,000 construction jobs; and approximately 15,000 local long-term jobs in support companies, according to the tech giant.

Its investment is part of its “IDM 2.0” Initiative – a major evolution of an “integrated device manufacturing” model that Gelsinger said makes Intel “the only company with the depth and breadth of software, silicon and platforms, packaging, and process with at-scale manufacturing customers can depend on for their next-generation innovations.”

Intel is in a fierce global competition for a bigger share of the semiconductor market at a time when a shortage of chips has impacted an array of industries, from automobile manufacturing to medical device development.

SRP will submit an application to the Corporation Commission for permission to extend its transmission line and hopes to obtain approval by early 2022.

That open hearing before the commission will follow town halls that the utility provider must conduct for south Chandler residents and businesses to weigh in on the plan. No dates have yet been set.

The city and SRP have already promised that residents living around the line’s route should not see too much impact by its construction.

“The parties have agreed to work with each other during the installation of the transmission lines to minimize disruption to the residences, schools, and businesses along the corridor,” the city memo states.

About half of the line will be placed underground, according to Ryan Peters, the city’s government relations manager, and should not be visible to residents living between Dobson Road and Arizona Avenue, noting that “2.65 miles of this entire project will be underground, so as not to give additional overhead utilities in areas that don’t currently have them.”

A portion of the power lines running along Price Road north of the Intel campus likely will be overhead.

“This agreement provides the means to minimize impacts on residents by building infrastructure underground where no transmission lines exist today,” said Mayor Kevin Hartke.

As part of the deal, the city will grant SRP permanent right-of-way easements valued at $4.5 million for building the underground portion.

The Intel expansion is believed to be the largest private investment in Arizona history.

“Intel’s continued expansion of its largest, most advanced manufacturing site in the world exemplifies the presence of innovation in Chandler,” said Chandler Mayor Kevin Hartke after Intel’s announcement.

Liz Shipley, Intel Arizona public affairs director, said, “The two new Fabs planned for Intel’s Ocotillo campus will enable world-changing technology to be manufactured right here in our hometown of Chandler. We thank SRP and the City of Chandler for working together quickly and collaboratively to help us enable such a significant expansion that will benefit the local, state and national economy.”

Over the last 30 years, the country’s share of global semiconductor fabrication has shrunk by about 25 percent, allowing Asian countries like Taiwan to occupy a bigger share of the industry.

One of Intel’s biggest competitors, Taiwan Semiconductor, is building a plant in north Phoenix at a cost of $12 billion, although some say that might only be the first phase of its plans in the Valley.

Intel and other industry leaders have been pushing Congress to strengthen the country’s competitiveness by offering more incentives and tax-breaks that could ignite a boom in chip manufacturing.

Last month, the U.S. Senate passed a bill that would inject $52 billion into the domestic production of semiconductor fabrication.   

As the nation’s chip supply remains in flux, local leaders are hopeful the East Valley’s manufacturing industry will remain competitive with the upcoming expansion of Intel’s facilities.

Maricopa County Supervisor Jack Sellers said he supports Chandler’s partnership with SRP and hopes his district, which encompasses the city, will reap the agreement’s benefits by helping Intel create more tech jobs.

“The proposed resolution would allow SRP to meet the power demands of Intel’s planned plant expansion, demonstrating once again, how your leadership makes Chandler a significant asset in the East Valley,” Sellers wrote the city.