EPA approves haze plan involving shutdown of three Four Corners units

The U.S. Environmental Protection Agency (EPA) on Aug. 24 published a final source-specific Federal Implementation Plan (FIP) requiring the coal-fired Four Corners Power Plant to reduce emissions of NOx, setting the stage for the shutdown of three of the plant’s five units.

The Four Corners Power Plant (FCPP) is located on Navajo Nation land near Farmington, N.M. The FIP was issued under the Clean Air Act’s (CAA) Best Available Retrofit Technology (BART) provision under the regional haze rule.

In this final action, EPA requires FCPP to reduce NOx. For NOx emissions, EPA is requiring FCPP to meet a plant-wide emission limit of 0.11 lb/MMBtu on a rolling 30-day heat input-weighted average. This represents an 80% reduction from the current emission rate. EPA is also finalizing an alternative emission strategy that gives the owners of FCPP the option to close Units 1–3 and install controls on Units 4-5 to each meet an emission limit of 0.098 lb/MMBtu, based on a rolling average of 30 successive boiler operating days.

For PM, EPA is requiring Units 4-5 at to meet an emission limit of 0.015 lb/MMBtu, and retaining the existing 20% opacity limit. These PM limits are achievable through the use of existing baghouses. EPA is also requiring FCPP to comply with a 20% opacity limit on its coal and material handling operations.

FCPP consists of five coal units with a total capacity of 2,060 MW. Units 1-3 are owned entirely by Arizona Public Service (APS) which serves as the facility operator, and are rated to 170 MW (Units 1 and 2) and 220 MW (Unit 3). Units 4 and 5 are each rated to a capacity of 750 MW, and are co-owned by six entities: Southern California Edison (48%), APS (15%), Public Service Co. of New Mexico (13%), Salt River Project (10%), El Paso Electric Co. (7%), and Tucson Electric Power (7%).

APS is in the process of purchasing the interst of SCE, which is an Edison International (NYSE: EIX) subsidiary.

EPA altered original plan based on shutdowns offered by owners

EPA’s proposed BART determination for FCPP was published in October 2010. In February 2011, as a result of additional information provided by stakeholders, EPA issued a supplemental proposal. EPA noted that it has issued a FIP before for this plant, covering SO2 emissions. APS, the operator of FCPP, and Sierra Club each filed petitions seeking judicial review of EPA’s 2007 FIP on separate grounds. The Court of Appeals for the Tenth Circuit rejected both petitions. The court agreed with EPA’s request for a voluntary remand of a single narrow aspect of the 2007 FIP, which was the opacity limit for the fugitive dust.

In October 2010, EPA proposed a second FIP, finding it appropriate to establish BART requirements for NOX and PM emissions, and proposed specific NOX and PM limits as BART.

  • For NOX, EPA proposed a plant-wide emission limit of 0.11 lb/MMBtu, representing an 80% reduction from current NOX emission rates, achievable by installing and operating selective catalytic reduction (SCR) technology on Units 1–5.
  • For PM, EPA proposed an emission limit of 0.012 lb/MMBtu for Units 1–3 and 0.015 lb/MMBtu for Units 4 and 5 achievable by installing and operating any of several equivalent controls on Units 1–3, and through proper operation of the existing baghouses on Units 4 and 5.
  • EPA also proposed a 10% opacity limit from Units 1–5 and a 20% opacity limit to apply to FCPP’s material handling operations to respond to the voluntary remand EPA took on this issue from the 2007 FIP.

In November 2010, APS, acting on behalf of FCPP’s owners, submitted a letter to EPA offering an alternative to reduce visibility-impairing pollution. APS proposed to close Units 1–3 by 2014 and install and operate SCR on Units 4 and 5 to each meet an emission limit of 0.11 lb/MMBtu by the end of 2018. In February 2011, EPA published the supplemental proposal with a technical evaluation of APS’ alternative.

In the supplemental proposal, EPA proposed to allow APS the option to comply with the alternative emission control strategy in lieu of complying with the October 2010 proposed BART determination. EPA’s alternative emission control strategy involved closure of Units 1–3 by 2014 and installation and operation of add-on post combustion controls on Units 4 and 5 to each meet a NOX emission limit of 0.098 lb/MMBtu by July 31, 2018.

EPA said this alternative represents reasonable progress towards the national visibility goal, under CAA Section 169A(b)(2), because it would result in greater visibility improvement in surrounding Class I areas at a lower cost. The proposal to require PM and opacity limits on Units 1–5, as well as 20% opacity limits for controlling dust from coal and ash handling and storage facilities, was unchanged.

APS pursues approvals to buy SCE portion of plant

In its Aug. 2 Form 10-Q, APS parent Pinnacle West Capital (NYSE: PNW) said about related matters: “Southern California Edison Company (‘SCE’), a participant in Four Corners, has indicated that certain California legislation may prohibit it from making emission control expenditures at the plant. On November 8, 2010, APS and SCE entered into an asset purchase agreement (‘APA’), providing for the purchase by APS of SCE’s 48% interest in each of Units 4 and 5 of Four Corners. The purchase price is $294 million, subject to certain adjustments. Completion of the purchase by APS is subject to the receipt of approvals by the [Arizona Corporation Commission], the California Public Utility Commission (‘CPUC’) and the FERC. On March 29, 2012, the CPUC issued an order approving the sale.”

The Form 10-Q added: “On April 18, 2012, the ACC voted to allow APS to move forward with the purchase, with a condition that the transaction may not close prior to December 1, 2012. The APA provides that the purchase price will be reduced by $7.5 million for each month between October 1, 2012 and the closing date. The ACC reserved the right to review the prudence of the transaction for cost recovery purposes in a future proceeding if the purchase closes. The ACC also authorized an accounting deferral of certain costs associated with the purchase until any such cost recovery proceeding concludes. The FERC application seeking authorization for the transaction was filed in May 2012, and a decision is expected before the end of November 2012.” Closing is also conditioned on the negotiation and execution of a new coal supply contract.

Pinnacle West also reported that APS, on behalf of the Four Corners participants, negotiated amendments to an existing facility lease with the Navajo Nation that  extends the Four Corners leasehold interest from 2016 to 2041. The Navajo Nation approved these amendments in March 2011. The effectiveness of the amendments also requires the approval of the U.S. Department of the Interior, as does a related federal rights-of-way grant which the Four Corners participants will pursue.

APS has also announced that, if its purchase of SCE’s interests in Units 4 and 5 at Four Corners is consummated, it will close Units 1-3 at the plant. APS owns 100% of Units 1-3. These events will change the plant’s overall generating capacity from 2,100 MW to 1,540 MW and APS’s entitlement from the plant from 791 MW to 970 MW. When the ACC approved APS moving forward with the purchase of Units 4-5, it also approved the recovery of any unrecovered costs associated with the closure of Units 1-3.

The U.S. Office of Surface Mining said July 18 that it plans to write an environmental impact statement covering the retirement of part of the Four Corners plant and new area for the BHP Billiton coal mine that feeds that plant its only coal. OSM said it will look at BHP Navajo Coal Co.’s proposed Pinabete mine permit area and the Navajo mine permit renewal, both of which are located on the Navajo Reservation in San Juan County, N.M.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.