Fw: information re: timing and schedule for NGS BART compliance

Colleen McKaughan to: Anita Lee, Ann Lyons 08/20/2012 09:24 AM

More info from DOI and SRP on timing.

Colleen W. McKaughan

Associate Director, Air Division

USEPA, Region 9

(520) 498-0118

----- Forwarded by Colleen McKaughan/R9/USEPA/US on 08/20/2012 09:25 AM -----

From: "Belin, Letty" <Letty

_ Belin@ios.doi.gov>

To: Janet McCabe/DC/USEPA/US@EPA, Colleen McKaughan/R9/USEPA/US@EPA, Deborah

Jordan/R9/USEPA/US@EPA

Cc: "Palumbo, David M" <DPalumbo@usbr.gov>, "Eto, Sandra" <SEto@usbr.gov>, "Hoeft, Cynthia A"

<CHoeft@usbr.gov>

Date: 08/20/2012 08:47 AM

Subject: information re: timing and schedule for NGS BART compliance

Dear EPA Colleagues:

I attach a memo from the Bureau of Reclamation reflecting their most up to date information and

estimates regarding the timeframe for NEPA compliance with respect to the Navajo Generating Station

and the related Kayenta Mine.

The Interior Department believes the issue of a timeline for Navajo Generating Station

compliance with whatever emissions levels EPA proposes for its BART determination is critical

to all NGS stakeholders, most particularly the owners of NGS, the Navajo Nation and Hopi Tribe,

the Central Arizona tribes that depend on Central Arizona Project water, and the United States

(whose most direct interests in this proceeding are held by the National Park Service by virtue

of the impacts of NGS emissions on National Parks and the Bureau of Reclamation, owner of the

largest share of NGS).

The fundamental issue regarding the timeline relates to the NGS owners other than

Reclamation (LADWP is a special case). In March of this year, the four other owners wrote to

EPA:

We would like to be as clear as we can at this time

– if EPA proposes a BART

emission limit for NGS that requires the participants to begin design and

construction for SCR or baghouses before the multi

‐ year NEPA and ESA

compliance process is complete and the Lease and rights

‐ of

‐ way have been

signed by the Secretary of Interior, the continuing viability of the plant is at

substantial risk.

A couple of weeks ago I forwarded to EPA an email from Reclamation discussing the timeline

issue in more detail and noting that completion of the EIS is expected to take approximatelyfive years. The attached document is an updated and more refined timeline and schedule. This

new set of estimates confirms that the Interior Department is not expected to be able to issue a

Record of Decision granting necessary approvals for NGS until mid

‐ 2017. While it is tempting

to look at parts of this schedule and believe they are overly pessimistic, I caution against that.

The extraordinary complexity of this particular combination of undertakings should, if anything,

underscore the possibility that unanticipated problems could arise, causing this schedule to slip.

In addition, based on my work on NGS over the past three years, I believe litigation challenging

federal approvals is a virtual certainty.

I am working closely with Reclamation and other DOI agencies on preparations for carrying out

the NEPA process. Earlier this month, we determined that a single EIS will be prepared for both

the necessary NGS approvals (lease extensions, rights

‐ of

‐ way, etc.) and the associated Kayenta

Mine lease and ROW approvals, and that Reclamation will be the lead agency. In addition to

the Record of Decision following completion of the NEPA process, there are ten major federal

agency approvals needed before NGS can continue to operate in the 2019

‐ 2044 time period,

including leases, ROWs, contracts, agreements, and ESA compliance. Agreements must be

reached with the Navajo Nation, the Hopi Tribe, and Peabody Coal Company, in addition to the

federal approvals needed. Furthermore, the requirement that LADWP divest its interest no

later than 2019 means that for the plant to continue operations, some entity will need to make

the decision before 2019 that purchasing LADWP’s 21.2% interest is a sound economic

investment. Clearly NGS faces a uniquely complex and risky regulatory, political, and business

landscape in planning for future operations.

As EPA is aware, neither DOI nor any federal agency may make any decisions or issue any

approvals until after the ROD is signed.

DOI believes that any BART decision that would require major investments by NGS owners

before an ROD has been issued and approvals granted creates a substantial risk of NGS closure.

At minimum, even if NGS did not close, increased risk could increase the costs of financing and

exacerbate the resulting impacts on the cost of NGS power and the cost of Central Arizona

Project (CAP) water. We believe the proposed BART rule should be based on an

installation/investment schedule that post

‐ dates the signing of the ROD for the facility, and that

provides some cushion for permitting and/or delays due to litigation or any other reason (e.g.,

2019).

Thank you very much for your consideration of this information.

Letty Belin

Counselor to the Deputy Secretary

U.S. Department of the Interior

202

‐ 208

‐ 6291NavajoGeneratingStation(NGS)&KayentaMineComplex(KMC)NEPAPreliminarySchedule(Draft)DraftforDiscussionPurposesOnly(August10,2012)

Apr

‐ 12 May

‐ 12 Jun

‐ 12 Jul

‐ 12 Aug

‐ 12 Sep

‐ 12 Oct

‐ 12 Nov

‐ 12 Dec

‐ 12 Jan

‐ 13 Feb

‐ 13 Mar

‐ 13 Apr

‐ 13 May

‐ 13 Jun

‐ 13 Jul

‐ 13 Aug

‐ 13 Sep

‐ 13 Oct

‐ 13 Nov

‐ 13 Dec

‐ 13 Jan

‐ 14 Feb

‐ 14 Mar

‐ 14 Apr

‐ 14 May

‐ 14 Jun

‐ 14 Jul

‐ 14 Aug

‐ 14 Sep

‐ 14 Oct

‐ 14 Nov

‐ 14 Dec

‐ 14 Jan

‐ 15 Feb

‐ 15 Mar

‐ 15 Apr

‐ 15 May

‐ 15 Jun

‐ 15 Jul

‐ 15 Aug

‐ 15 Sep

‐ 15 Oct

‐ 15 Nov

‐ 15 Dec

‐ 15 Jan

‐ 16 Feb

‐ 16 Mar

‐ 16 Apr

‐ 16 May

‐ 16 Jun

‐ 16 Jul

‐ 16 Aug

‐ 16 Sep

‐ 16 Oct

‐ 16 Nov

‐ 16 Dec

‐ 16 Jan

‐ 17 Feb

‐ 17 Mar

‐ 17 Apr

‐ 17 May

‐ 17 Jun

‐ 17 Jul

‐ 17‐3‐2‐1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60A.1 IdentifyScopeandRoles&Responsibilities1234567A.2 ConsultantSelection1234A.3 DataCollection&Analysis1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20A.4 ProjectInitiation1234A.5 DescriptionofProjectPurpose/Background&Alternatives1234A.6 PublicScopingProcess1 2 3 4 5 6 7 8 9 10A.7 RefinementofActionAlternativeDescriptions1 2A.8 PreparationofDraftEIS1 2 3 4 5 6 7 8 9 10 11 12A.9 ProcessofFederalRegisterNoticeofAvailability/ProductionofDraftEIS1234A.10 PublicReviewandCommentPeriod&PublicHearings1234A.11 PreparationofFinalEIS1 2 3 4 5 6 7 8 9 10 11A.12 ProcessFederalRegisterNoticeofAvailability/ProductionofFinalEIS123A.13 IssueRecordofDecision1234A.X Float/Contingency1Color ResponsibilityBOR/BIA/OSM/OEPCBOR/BIA/OSM/OEPC+OtherCooperators+ProjectProponentsBOR/BIA/OSM/OEPC+OtherCooperators+ProjectProponents+ConsultantPublicParticipationPrimarilyConsultantFederalRegisterNoticeDepartmentalDecisionTaskIdentifierTaskAugust10,2012SeeNarrativeSheetsforTaskandSubtaskInformationColorLegendDraft for Discussion Purposes Only (August 10, 2012)

1 Task/

Subtask NGS-KMC ENVIRONMENTAL COMPLIANCE PRELIMINARY SCHEDULE (DRAFT) Duration

(Months)

A NATIONAL ENVIRONMENTAL POLICY ACT

Some tasks run concurrently; therefore, the sum of the listed durations is greater than 60 months.

A.1 Identify Scope and Roles/Responsibilities 3

A.1.1 Establish roles and responsibilities among OSM, BIA, and Reclamation (lead agencies) (completed)

A.1.2 Define Purpose and Need (P&N), No Action Alter native assumptions (NAA), geographic project area

A.1.3 Prepare and execute a Memorandum of Understanding (MOU ) with Reclamation, BIA, OSM and the project

proponents regarding preparation of an EIS, and compliance wi th all other applicable environmental regulations and

requirements

A.2 Consultant Selection 4

A.2.1 Develop scope of work (SOW) that lead agencies agree upon

A.2.2 Issue request for proposals (RFP)

A.2.3 Review proposals, select EIS consultant, and finalize contract

A.3 Data Collection (runs concurrent with Tasks A.4 through A.8) 18

A.3.1. Conduct research of existing information and identify dat a gaps; propose methodology for dealing with any data gaps

A.3.2 Revise schedule based upon progress of studies/research.

A.4 Project Initiation 5

A.4.1 Prep for and conduct kick-off meeting w/ lead agencies; conduct site trip; Draft schedule and work plan, solidify P&N

A.4.2 Develop public participation plan; communication protoc ols and meeting schedules (periodic newsletters will be

distributed throughout the process and are not identified in th is schedule as work will be done concurrently with other

tasks)

A.4.3 Initiate formal Kick-Off meeting with all Cooperating Agenc ies (CAs) (over 10 agencies/offices identified thus far);

Identify and initiate studies/investigations which are needed to gather information for EIS

A.4.4 Prepare and execute an MOU with all cooperating agencies r egarding participation on the preparation of an EIS, and

compliance with all other applicable environmental regulations and requirements

A.5 Description of Project Purpose/Background & Alternatives (for Scoping) 4

A.5.1 Prepare initial description of proposed action and alternatives (if any) for use in scoping

A.5.2 Make initial cut on resources to be included/issues to be addressed

A.5.3 Develop list of past, present, and reasonably foreseeable futu re actions that need to be considered in evaluating

cumulative impacts; describe trends anticipated to continue into or occur in the future

A.6 Public Scoping Process (The extended schedule takes into account the number of public meetings anticipated (>

15), anticipated extension of the comment period, and volume of comments anticipated to be received) 10

A.6.1 Develop website for project; establish guidelines and requirements

A.6.2 Prepare and publish FR NOI; make arrangements for public meetings; prepare and mail out newsletter

A.6.3 Prepare graphics and displays for meetings

A.6.4 Attend & carry out meeting responsibilities (assume > 15 public meetings over the course of 2 weeks)

A.6.5 Assume initial 60-day scoping period, followed by one extension ( of 60 days)

A.6.6 Prepare & finalize sc oping summary report

A.6.7 Identify any new issues that need to be addressed in the EIS & propose strategyDraft for Discussion Purposes Only (August 10, 2012)

2 Task/

Subtask NGS-KMC ENVIRONMENTAL COMPLIANCE PRELIMINARY SCHEDULE (DRAFT) Duration

(Months)

A.7 Refinement of Action Alternative Descriptions 2

A.7.1 Further develop conceptual alternatives identified during scopi ng and/or identify new alts to be evaluated as a result of

the scoping process

A.7.2 Hold a team meeting of all disciplines (agency and Consul tant) to ensure everyone is using the same project area,

understands the assumptions to be used in determini ng impacts, and knows what past, present and reasonably

foreseeable future actions need to be considered in discussion of cumulative impacts

A.7.3 Revise and distribute finalized description of action alternatives

A.8 Preparation of Draft EIS (This durati on takes into account additional time need ed to coordinate with multiple

agencies, and revise the document to accommodate incorporation of multiple agencies’ comments) 12

A.8.1 Complete description of existing conditions and anticipated environmental consequences for each resource area; also

describe cumulative impacts

A.8.2 Review by lead agencies; revise document

A.8.3 Revise and format document; reproduce document for coop agency/OEPC review

A.8.4 Review by all agencies; meeting to discuss outstanding issues, if appropriate

A.8.5 Revise document, as appropriate; final re finements to achieve print-ready copy

4.9 Process Federal Register Notice of Availability/Production of Draft EIS 4

A.9.1 Draft/review FR NOA

A.9.2 Once permission to print has been issued, print hard copies and make disks

A.9.3 Make arrangements for public hearing and add information to NOA

A.9.4 Make distribution of DEIS, file DEIS with EPA, and issue NOA/PH

A.10 Public Review and Comment Period & Public Hearings 4

A.10.1 Finalize arrangements for public hearings

A.10.2 Attend & carry out meeting responsibil ities (15 meetings in 2 weeks)

A.10.3 Assume initial 60-day review and comment period, followed by one extension ( 60 days)

A.11 Preparation of Final EIS (This takes into account the extensive number of comments likely to be received which will

require responses, additional research ti me anticipated to be needed to satisfactorily address all relevant comments,

and additional effort needed to coordinate review and issue resolution among all the numerous cooperating agencies.

) 11

A.11.1 Distribute all comments to lead agencies, cooperating agencies, proponents (with comments delineated?)

A.11.2 Review and categorize public comments; prepare draft res ponses, and identify areas of the EIS requiring revisions

(have team meeting to discuss comments/responses requiring resolution?)

A.11.3 Identify any new issues that need to be addressed in the EIS and propose strategy

A.11.4 Revise draft EIS as appropriate; internal review of responses and preliminary final EIS by lead agencies

A.11.5 Review and revise preliminary final EIS

A.11.6 Format document; reproduce document for coop agency and OEPC review

A.11.7 Meeting w/ project proponents to discuss outstanding issues

A.11.8 Revise document, if appropriate

A.11.9 Final refinements to achieve print-ready copy

A.11.10 Obtain permission to print from OEPCDraft for Discussion Purposes Only (August 10, 2012)

3 Task/

Subtask NGS-KMC ENVIRONMENTAL COMPLIANCE PRELIMINARY SCHEDULE (DRAFT) Duration

(Months)

A.12 Process Federal Register Notice of Availability/Production of Final EIS 3

A.12.1 Draft/review FR NOA; file FEIS with EPA

A.12.2 Print hard copies/press disks and make distribution

A.13 Issue Record of Decision 4

A.X Float/Contingency 1