the future of navajo generating station and potential
TRANSCRIPT
The Future of Navajo Generating Station and Potential Implications for Arizona
Water
John F. Sullivan Salt River Project
July 29, 2014 National Water Resources Association – Western Water Seminar
J.F. Sullivan, 07/29/14
NGS Background
¨ 3 coal-fired units, 2,250 megawatts (MW)
¨ Located on Navajo Nation
¨ Operated by SRP on behalf of six participants
¨ Over 520 employees, 85% Navajo
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NGS Participants
J.F. Sullivan, 07/29/14
Importance of NGS
¨ Built as alternative to dams at ends of Grand Canyon
¨ Provides over 90% of power for Central Arizona Project
¤ CAP delivers over 1.5 million acre feet of water to Central Arizona counties
¤ CAP accounts for 32% of the Active Management Area water supply
¨ Provides funds for Indian water rights settlements
¨ Supports local economy
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J.F. Sullivan, 07/29/14
Challenges Facing NGS
¨ Future ownership uncertain
¨ Coal supply agreement must be extended beyond 2019
¨ Lease and rights-of-way must be extended (requires Federal environmental reviews)
¨ May be impacted by potential future EPA carbon rule for tribal sources
¨ Subject to Regional Haze Rule (costly additional emission controls required as Best Available Retrofit Technology; “BART”)
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J.F. Sullivan, 07/29/14
Regional Haze Rule
¨ Goal to achieve natural visibility conditions by 2064
¨ Progress measured over 10-year planning periods
¨ First planning period 2008-2018
¨ First planning period requires analysis of BART for older coal-fired power plants
Low NOx Burners
Selective Non-Catalytic Reduction
Selective Catalytic Reduction
NOx Control Options
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J.F. Sullivan, 07/29/14
EPA’s Initial BART Proposal
¨ BART Determination Requires Selective Catalytic Reduction (SCR) by 2018
¨ BART Alternative EPA also proposed a BART alternative requiring SCR in 2021-2023
¨ Potential Cost = $650 million - $1.5 billion
¨ EPA also invited other “better than BART” alternatives that achieve the same or greater emission reductions
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J.F. Sullivan, 07/29/14
Timing Constraints
Proposed EPA BART Compliance Deadline
Proposed EPA BART Alterative
Compliance Deadline
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J.F. Sullivan, 07/29/14
Technical Work Group (TWG)
¨ Central Arizona Project (CAP)
¨ Environmental Defense Fund (EDF)
¨ Gila River Indian Community (GRIC)
¨ Navajo Nation (NN)
¨ SRP/ NGS Owners
¨ U.S. Department of the Interior (DOI)
¨ Western Resource Advocates (WRA)
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J.F. Sullivan, 07/29/14
TWG BART Proposal
¨ Alternative A (if certain ownership changes occur) ¤ Shut down one unit or reduce generation by 2020 ¤ SCR or equivalent on two units by 2030
¨ Alternative B (all other circumstances) ¤ NOx reductions equivalent to shutdown of one unit
from 2020 to 2030 (virtual unit closure)
¤ Submit annual plans with potential future operating scenarios beginning in 2020
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J.F. Sullivan, 07/29/14
Emission Reductions
Scenario NOx Reduc0ons
3 Units with SCR by 2018 (EPA BART) 735,000 tons
1 Unit Shutdown, 2 Units with SCR by 2030 (TWG Alterna0ve A)
794,000 tons
Virtual Unit Shutdown, Annual Plans
(TWG Alterna0ve B) >735,000 tons
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J.F. Sullivan, 07/29/14
Value of TWG Alternative
¨ Best way to ensure continued operation of NGS
¨ Provides time to resolve outstanding uncertainties
¨ Maintains Arizona utility interests in NGS
¨ Defers significant cost of additional controls
¨ Reflects the interest of a broad spectrum of stakeholders
¨ Achieves greater emission reductions than EPA’s proposal
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J.F. Sullivan, 07/29/14
EPA’s Final Rule
¨ Final rule issued July 28, 2014
¨ Appears to incorporate the TWG Alternative
¨ Further review of the rule is in progress
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J.F. Sullivan, 07/29/14
Potential Water Implications
¨ CAP is single largest source of renewable water in Arizona
¨ Closure of NGS would cause substantial increase in CAP water rates ¤ Could adversely impact agriculture
in Arizona and Indian water rights settlements with central Arizona tribes
¨ Adoption of TWG Alternative will minimize impact on water rates versus initial BART proposal
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J.F. Sullivan, 07/29/14
Next Steps
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K. J. Barr, 07/29/14
Questions?
Additional Information:
www.NGSPower.com www.cap-az.com
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