The U.S. Environmental Protection Agency met a deadline Thursday on a plan to control emissions from three Arizona power plants that it contends have impaired visibility at places like the Grand Canyon.
The Associated Press reports that the EPA had proposed approving Arizona's air-quality plan to reduce sulfur dioxide and soot at the Apache coal-fired plant in Cochise, along with the Cholla and Coronado plants. But when it came to nitrogen oxide emissions, the EPA suggested the state's plan didn't go far enough and came up with one of its own.
The conflict highlights the tension between the EPA and businesses after an election season in which the notion of heavy-handed environmental regulations became a popular argument for Republican candidates. Arizona and the administration of Republican Gov. Jan Brewer contend the EPA's proposals would cost hundreds of millions of dollars, causing utility rates to sharply increase for residents.
Instead of low nitrogen-oxide burners, the EPA hinted it might require that some of plants' older units be equipped with selective catalytic reduction technology to keep 17,000 tons nitrogen oxide from being released into the air and causing visibility issues at 18 national parks and wilderness areas.
Environmental groups contend the regulations are long overdue and the benefits would extend not only to places like the Grand Canyon but to public health. They say the EPA's proposal is a step in the right direction, but it will be utility customers who will bear the brunt of costs needed for requirement implementation.
“Both the short- and long-term impact to operations will have to be re-analyzed,” said Geoff Oldfather, Manager of Communications and Public Relations for Arizona’s G&T Cooperatives (G&Ts), which includes Arizona Electric Power Cooperative (AEPCO), the company in Benson that owns the Apache Generating Station.
“This literally sends us back to the drawing board, because we based most of our studies and financial impact models on the possibility the EPA would specifically mandate the use of selective catalytic reduction (SCR) to achieve the new standard,” Oldfather said in a prepared statement.
He said AEPCO had proposed a plan for reducing nitrogen oxide emissions and its contribution to regional haze by installing upgraded combustion controls to the Arizona Department of Environmental Quality (ADEQ) that would cost an estimated $21 million to install, as opposed to $171 million for SCR. ADEQ adopted AEPCO’s plan as part of Arizona’s implementation plan. The EPA stepped in and rejected that plan.
“Regardless of what technology we use to meet the new standard, it’s going to have hugely negative financial impact on plant operations and the mostly-rural an economically disadvantaged rural customers who use its power – and even the ADEQ’s studies show it won’t make any difference to hikers or anyone else who is looking for improved visibility,” Oldfather said.
“We’ll look at the viability of various pollution control technologies combined with operational options to achieve the reductions called for in this ruling,” Oldfather said. “Regardless of how we do it, it’s going to be expensive and will ultimately affect a disproportionate number of our customers who live at or below the federal poverty level,” Oldfather said. He said between 25 and 30 percent of rural users of electricity are at that level, which, for a family of four in the areas served by AEPCO, is less than $24,363 a year. SCR technology, combined with combustion controls may still be necessary to achieve the new level and that would result in a minimum wholesale rate increase of 17.5 percent and a retail rate increase to member/customers of 12 percent to 20 percent.
Oldfather said that Apache Generating Station and the G&Ts would continue normal operations.
“We’re going to do what we’ve always done and that is to act in a pro-active manner to meet or exceed regulatory standards while providing safe, reliable and affordable electric power to the rural members who rely on us,” Oldfather said.
The EPA has said it proposed rejecting Arizona's plan for nitrogen oxide emissions because it didn't fully address the issues raised by the agency and federal land managers when it came to cost analyses, the best available technology for controlling emissions, and visibility benefits.
The operators of the power plants are waiting to see whether they would have to invest hundreds of millions of dollars for the upgrades for what they say would be negligible improvement to air quality. Those costs would be passed on to ratepayers.
``We're in favor of making sure our plant has state-of-the-art equipment,'' said Damon Gross, a spokesman for Arizona Public Service, which operates the 1,027-megawatt Cholla Power Plant near St. Johns. ``The question becomes, what is the benefit you're getting versus the cost of what customers are going to assume because of that.''
EPA's proposal would mean a $436 million investment among Cholla's owners, which Gross said would be passed on to ratepayers. The bill for residential users would go up nearly $19 a year, while small business customers would pay almost $32 more annually, he said.
The Salt River Project, which owns and operates the Coronado Generating Station near Holbrook, said it would be on the hook for another $119 million under the EPA's proposal. Kelly Barr, the senior director of environmental management policy and compliance for SRP, said that's on top of a $500 million investment that partly came out of a previous consent decree with the EPA for upgrades.
``We felt like we had met a very high standard of compliance,'' she said. ``We felt like we would be done at that facility for a while.''
Arizona Electric Power Cooperative wrote to the EPA earlier this year to say the company estimated it could be forced to spend up to $219 million.