Nikola plans to buy cheap power in Arizona

ARIZONA – Nikola Corp., a troubled electric-truck startup, plans to enter into an agreement with an Arizona utility to supply cheap electricity it needs to produce hydrogen for a planned fueling network.

The proposed contract between Nikola and Arizona Public Service Co., a unit of Pinnacle West Capital Corp., was disclosed in a Dec. 11 filing requesting approval from Arizona utility regulators.

The deal would mark a significant step for a startup that’s faced a series of setbacks since going public in June and whose business plan rests on being able to produce hydrogen fuel cheaply.

In an April filing, Nikola outlined an estimated cost of producing hydrogen at around US$2.50 per kilogram, which it based on securing wholesale electricity at a rate of 3.5 cents per kilowatt hour. The rate APS proposes is around 2.7 cents per kilowatt hour.

Source: Bloomberg