EPA officially offers Navajo coal plant alternative to the public

The U.S. Environmental Protection Agency on Sept. 25 announced a supplemental proposal to reduce emissions from the coal-fired Navajo Generating Station (NGS), one of the largest sources of NOx emissions in the country.

The 2,250-MW plant is located on the Navajo Nation, less than 20 miles from the Grand Canyon, near Page, Ariz., and the Utah state line. It gets its coal from Peabody Energy‘s (NYSE: BTU) Kayenta strip mine in Arizona.

On Feb. 5, EPA issued a regional haze proposal to reduce by 73% the visibility impacts of NGS on eleven National Parks and Wilderness Areas. As part of that proposal, EPA asked the public to submit alternative scenarios that would achieve greater visibility benefits through different mechanisms. In response, a coalition of stakeholders from various sectors developed and recently submitted to EPA an alternative that establishes a lifetime cap in NOx emissions, accommodates different future plant ownership scenarios, and ensures greater emission reductions than EPA’s initial proposal.

The coalition, known as the Technical Work Group (TWG), is composed of the Central Arizona Water Conservation District, the Environmental Defense Fund, the Gila River Indian Community, Navajo Nation, the Salt River Project, the Department of the Interior and Western Resources Advocates. The supplemental proposal adds TWG’s alternative as a third option now available for public comment prior to final agency action.

“These creative alternatives achieve greater emissions reductions at NGS while giving tribes and owners more flexibility,” said Jared Blumenfeld, EPA’s Regional Administrator for the Pacific Southwest.

NGS is co-owned by the U.S. Bureau of Reclamation, Salt River Project, Los Angeles Department of Water and Power (LADWP), Arizona Public Service, Nevada Power and Tucson Electric Power. LADWP and Nevada Power want to exit their stakes in the plant for greenhouse-gas reduction purposes. LADWP owns approximately 477 MW of NGS, while NV Energy owns about 254 MW. In total that is 731 MW, which is 19 MW short of one 750 MW unit at NGS. The Navajo Nation also recently acquired the option to purchase up to a 170 MW interest in NGS.

Although not formally part of the Sept. 25 action, the TWG plan also includes commitments by the Interior Dept. to achieve 80% clean energy for the federal share in NGS by 2035, and to complete a study on renewable energy options for the plant by the National Renewable Energy Laboratory. The TWG plan also includes a guarantee that the environmental review for NGS will consider clean energy generation options.

EPA is requesting comment by Jan. 6, 2014, on the supplemental proposal and the initial February proposal. The public will have five opportunities to attend open houses and public hearings in Arizona during the week of Nov. 12.

Most scenarios involve the shutdown of one Navajo unit

The TWG Alternative establishes a lifetime NOx cap over the 2009-2044 period that is equivalent to the cumulative NOX emissions over 2009-2044 that NGS would emit under EPA’s proposed best available retrofit technology (BART) determination of 0.055 lb/MMBtu achieved within five years of the final rule. Due to on-going lease and ownership uncertainties, the operators of NGS can’t commit right now to a single course of action for maintaining emissions below the 2009-2044 NOX Cap. The TWG Alternative therefore includes several operating scenarios for meeting the 2009-2044 NOX Cap.

The TWG Alternative provides different operating scenarios because of current uncertainty over the ownership interests in NGS following the expiration of the initial NGS lease term at the end of 2019. Two owners, LADWP and NV Energy, have announced plans to divest from any continuing ownership interest in NGS after 2019. These owners may retire or sell their interest in NGS. In addition, a recent Lease Amendment with the Navajo Nation that extends the NGS lease to 2044 includes an option for the Navajo Nation to purchase up to a 170 MW ownership share in NGS.

Each of the three scenarios under TWG Alternative A (A1, A2, or A3) requires two significant emission reductions, one to occur by Dec. 31, 2019, and the other by Dec. 31, 2030.

  • The emission reductions in the first step, by Dec. 31, 2019, under alternative A1 would be achieved through closure of one unit. Alternative A2 would entail closure of one unit with an increase in capacity, not to exceed 189 MW, at the remaining two units. Alternative A3 would entail the curtailment of energy production across all three units such that the emission reductions are equivalent to the closure of about one unit.
  • The emission reductions to occur in the second step, under Alternatives A1-3, would occur by Dec. 31, 2030, and would be achieved by compliance of two units at NGS with an emission limit of 0.07 lb/MMBtu, achievable with the installation of selective catalytic reduction (SCR). Under the TWG Alternative, although the 2009-2044 NOX Cap is calculated based on EPA’s proposed best available retrofit technology (BART) emission limit of 0.055 lb/MMBtu, the owners of NGS commit to meeting a limit of 0.07 lb/MMBtu from the installation of SCR. The operator states that a limit of 0.055 lb/MMBtu is not achievable for a retrofit application when startup, shutdown, and load following emissions are included.

The alternatives have different trigger events:

  • Alternative A1 would be triggered if LADWP and NV Energy retire their ownership shares of NGS without selling, or if they sell their ownership shares to an existing NGS participant and the Navajo Nation does not elect to purchase an interest in NGS.
  • Alternative A2 is triggered if LADWP or NV Energy sell their ownership shares to an existing NGS participant, the Navajo Nation elects to purchase an interest in NGS, and the NGS participants can increase the capacity of NGS by no more than 189 MW without triggering major source preconstruction permitting requirements.
  • Alternative A3 is triggered if LADWP or NV Energy sell their ownership shares to an existing NGS Participant, the Navajo Nation elects to purchase an interest in NGS, and the NGS Participants cannot increase the capacity of NGS without triggering major source pre-construction permitting requirements.

TWG Alternative B would be triggered if LADWP and/or NV Energy sell their ownership interest to a third party (i.e., a party that is not an existing NGS participant). Alternative B establishes similar emission reductions to Alternative A by setting a second NOX emission cap over the 2009-2029 period, i.e., the 2009-2029 NOX Cap (calculated to be equivalent to the closure of one unit in 2020), in addition to the 2009-2044 NOXCap. Alternative B specifies that NOX emissions must be maintained below the cap during each applicable period (2009-2029 and 2009-2044), but does not specify how the NGS owners must operate NGS to meet each cap.

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.