The Navajo Generating Station:Opportunity for Transition

Rob Smith, Sierra ClubRoger Clark, Grand Canyon Trust

SRP stakeholder meetingPage, AZ

February 4, 2011

NavajoGeneratingStation

August 2010

“It’s the pollution and what the impacts are going to be from the pollution to all the people that live there.”

Elouise Brown, Dooda Desert Rock

Photo: New York Times

1955 Air Pollution Control Act•research on air pollution sources

1963 Clean Air Act•national program on air pollution

1967 Air Quality Act•control of interstate pollution

1970 Clean Air Act•health standards, control of auto and industry pollution

1977 Clean Air Act amendments•prevent and remedy regional haze with Best Available Retrofit Technology (BART)

1990 Clean Air Act amendments•control acid rain and toxics, protect ozone layer

2007 Supreme Court (Massachusetts v. EPA)•CO2 is air pollutant

A national commitment to clean air

SCR is the new NOx standard

Blue = installed Red = planned Purple = recommended Green = ??

Source: Sierra Club 2/2011

Cost of Pollution Controlsfor

Navajo Generating StationUsing Salt River Project high estimate for SCR

(compared to National Park Service)

Power

SRP est. Total Annual Cost w/SCR/LNB/SOFA @ 20 years $94.8 MM ($38.5 MM – NPS)

SRP share of Navajo plant 21.7%SRP share of TAC $20,571,600SRP retail sales FY 2009 MWh 26,747,000SRP pollution control cost/MWh $0.77Divide by 1000 for kWh $0.00077Average monthly SRP residential use (kWh) 1208

Monthly increase in SRP power rates/resident $0.93 ($0.38/NPS)

Calculation: Sierra Club

Water

BuRec share of NGS 24.3%BuRec share of SRP est. TAC ($/yr.) $23,036,000CAP M&I and Indian water contracts (af/yr.) 1,288,402Cost of NGS controls/af for M&I and Indian water $17.88/af ($7.15/NPS)CAP M&I and Federal subcontract rate 2010 $118.00/af Water rate with NGS controls $135.88/afAmount of increase for CAP water 15% (6%/NPS)CAP component of Phoenix water 43%Rate of increase to Phoenix water rates (.43 x .15) 6.5%Amount increase/af for Phoenix water user $7.67Average Phoenix water use (4-people, 135 gal/cap) 197,100 gallons = .6 afAverage Phoenix household annual water cost increase $4.60

Monthly water increase/average Phoenix household $0.38 ($0.16/NPS)

Calculation: Sierra Club

Cost of Pollution Controlsfor

Navajo Generating StationUsing Salt River Project high estimate for SCR

(compared to National Park Service)

2006-2011 = +43%

2006-2016 = +72%

A drier West

Source: University of Arizona

Palmer DroughtSeverity Index

“…the EPA reported thatthe build-up of carbon dioxide in the atmosphere would cause a warming of the earth in the 1990’s.

“The burning of fossil fuels such as petroleum products and coal is the main cause of the build-up.”

The World Book Year Book - 1984

BART at NGS

Install within 3 years:

•Selective Catalytic Reduction

•Baghouses

•Improved pollution controls for sulfur and ammonia

NGS uncertainties

•LADWP plans to divest 21.2% share of NGS by 2014

•Renew 40-year water contract for 34,100 af of Arizona’s Upper Basin water by 2013 (Navajo and Hopi may have claims on Arizona’s 50,000 af of Upper Basin Water)

•Renewal of site leases with Navajo Nation for power plant, waste disposal, railroad, transmission lines, etc by 2019

•Pending standards for:•toxics (incl. mercury, a neurotoxin) -- NGS

emits more than 300 lbs/year of mercury•CO2 (a planetary threat). NGS releases

nearly 20 million tons/year, about 1/4th of AZ’s GHG•ozone •coal combustion waste

Coal supply uncertainties•Kayenta mine lease expiration in 2026

•New EIS required for Kayenta mine

•Relocation of people, new environmental and cultural clearances may be needed for continued mining after 2030

•Renegotiation of coal and water agreements with Navajo and Hopi governments

•Community concerns with:--Wastewater discharges from mines and ponds --Dewatering Moenkopi Wash--Groundwater depletion and contamination --Livestock deaths and human illness

U.S. Department of Interior Leadership Concept

Commitment to begin planning the orderly transition to cleaner energy alternatives that will:

•improve the health and well-being of people and ecosystems

•reduce air pollution that impairs visibility at Grand Canyon

•increase opportunities for community economic growth, diversification, and sustainability

•ensure Hopi and Navajo communities access to clean water, restored aquifers and springs, and other human rights

•provide affordable water delivery through the Central Arizona Project for agricultural, municipal, industrial, and tribal interests

•fulfill the federal government’s trust responsibilities to Navajo and Hopi people

Critical DOI choices:

1) Reduce DOI’s 24.3% share of NGS air pollution to meet BART within 3 years

2) DOI commits to “eliminating coal use” and “implementing on-site renewable energy projects” at the NGS site by 2020 in compliance with:

• Department of the Interior strategic plan to reduce its greenhouse gas emissions by 20% by 2020 http://fedcenter.gov/_kd/Items/actions.cfm?action=Show&item_id=16146&destination=ShowItem

• Presidential Executive Order 13514http://www.whitehouse.gov/administration/eop/ceq/initiatives/sustainability

Suggestions for DOI transition plan:Redesign existing generation and transmission facilities for renewable energy projects (incl. converting Black Mesa strip mined areas to solar generation, locating solar and wind projects near transmission lines across tribal land, using the CAP canal ROW for solar projects)

Create opportunities for Hopi and Navajo ownership of renewable energy projects

Create revenue sources for Hopi and Navajo economic development through the sale of pollution credits and carbon not burned

Help finance capital costs by modifying CAP repayment terms

“Operating on the assumption that energy would be both cheap and superabundant, I led my generation to makemisjudgments that have come back andnow haunt and perplex your generation…

Now, the paramount task of your generationwill be to correct those mistakes with anefficient infrastructure that respects thelimitations of our environment to keep upwith the damages we are causing.”

Stewart Udall, “A Letter to My Grandchildren”, 2009