MEMORANDUM

TO:  Navajo Generating Station Docket  

FROM:  Colleen McKaughan, Associate Director, Air Division, EPA Region 9

DATE:  March 19, 2013

PARTICIPANTS:  See attached sign‐in sheet

SUMMARY: Colleen McKaughan met with Chairman Ned Norris, Tohono O’odham Nation, and members

of the Water Resources Committee on March 19, 2013.  Colleen went over a presentation on the

proposed Navajo Generating Station BART determination (copy attached), and responded to questions.

                


Region 9

Overview of EPA ProposOverview of EPA Propos

Rulemaking for

Navajo Generating Stati

Meeting with Tohono O’odham Nation

March 19, 2013

Colleen McKaughan

Associate Director, Air Division

US E i l P i A R i 9US Environmental Protection Agency, Region 9
Region 9
Region 9

Overview

• On Febr ar 5 EPA p blished o r propo

On February 5, EPA published our propo

BART determination and an alternative to 

for NGS for NGS

• We proposed two things: 

– an emission limit for oxides of nitrogen (NO an emission limit for oxides of nitrogen (NO )x

achievable with installation of selective catalyreduction (SCR) in 5 years (BART) and 

– a framework to give NGS credit for early NOx

reductions and provide NGS with more flexibthe timing p( 

 of compliance (alternative to BART
Region 9

History of NGS

• NGS is located on Navajo Nation and burns co

NGS is located on Navajo Nation and burns co

is mined on reservation lands of the Navajo Naand Hopi Tribe

• U.S. Bureau of Reclamation owns 24.3% of N

the benefit of the Central Arizona Project

• NGS plays important roles in Arizona:

– Employment – Source of revenue to Navajo Nation and Hopi T

Source of revenue to Navajo Nation and Hopi T

– Source of electricity 

– Electricity pp is also used to pump CAP water and 

terms of several water settlement agreements wtribes located in Arizona 
Region 9

Why Are We Evaluating NG

• Congress required EPA to improve visibility a

National Parks and Wilderness Areas (Class 

– Regional Haze Program Regional Haze Program

• Large, old sources of air pollution that affect 

in Class I areas must be evaluated to determin Class I areas must be evaluated to determ

new air pollution controls should be required Available Retrofit Technology – BART)

• NGS affects visibility at 11 Class I areas, incl

Grand Canyon and Canyonlands and is subj

BART i t f th R i l H PBART requirement of the Regional Haze Pro
Region 9

How Do We Improve Visibi

• Air pollutants (for example, gases like NO

form particulate matter) cause regional ha

• By reducing emissions of air pollutants tha

haze, we can improve visibility 

• The same pollutants that impair visibility a

concern for human health, therefore reduc

haze also improves air quality haze also improves air quality

• EPA or State Agencies evaluate whether 

controls should be required for all facilities controls should be required for all facilities 

are subject to BART requirement 
Region 9

How is BART determined

• BART is determined based on a 5-factor a

– Factor 1 – How much would controls cost the f– Factor 2 – Are there energy, economic, or othe

environmental impacts of the control?

– Factor 3 – What are the existing controls at the – Factor 4 – What is the remaining useful life of 

f ilit ? facility?

– Factor 5 – How will visibility improve by adding 

controls?
Region 9

Brief Overview of 5-Factor Analys

LNB/SOFA SNCR + LNB/SOFA S

actor 1

Emission Limit 0.24 lb/MMBtu 0.18 lb/MMBtu 

Emission Reductions 10,865 tpy 16,608 tpy 

Total Capital Costs $45 million $84 million 

FTotal Capital Costs $45 million $84 million 

Average Cost Effectiveness $486/ton $1,745/ton 

Electricity Rate for SRP 

Customers in 2018 9.26 cents/kWh 9.28 cents/kWh 

2

Energy-only Water Rate for CAP 

Customers $58/acre-foot $61/acre-foot 

3 Existing Controls LNB/SOFA were installed early and volunt

4 Remaining Useful Life Amortization Period of 20 years; Lease e5

Largest Single Class I area 

Visibility Improvement 2.1 deciviews 3.1 deciviews 

Cumulative Visibility Improvement 16 deciviews 22 deciviews 
Region 9

Why Did We Propose New Cont

• Based on our 5-factor analysis, EPA dete

that installation of SCR + LNB/SOFA at N

red NO ucei i x emissions:

– is cost-effective – would not create a competitive disadvantage – would result in a perceptible improvement in v

th Cl I ff t d b NGS the Class I areas affected by NGS
Region 9

Why is EPA Proposing an Alterna

• Given the importance of NGS to tribes located in 

and its location on tribal land, it is appropriate to padditional flexibility to the owners additional flexibility to the owners

• Compliance timeframes for alternatives to BART 

Reg pp y 

ional Haze Rule that apply on state land do n

on tribal land

• Under the Tribal Authority Rule, EPA has discreti

d t i if d h FIP i d determine if and when a FIP is necessary and ap

including the timeline for complying with those requirements
Region 9

Th R i l H R l (RHR) i ith BART

Framework for Considering Altern

• The Regional Haze Rule (RHR) requires either BART 

alternative measure that will achieve greater reasonaprogress than BART (more emission reductions)

• EPA is proposing to give NGS credit for early and volu

reductions in order to extend the compliance date to 2meeting BART limits meeting BART limits

• This alternative achieves greater reasonable progress 

BART

• EPA included a framework for stakeholders to conside

beyond 2023 by implementing additional emission red

that would ensure greater reasonable progress than Bthat would ensure greater reasonable progress than B
Region 9

550,000

Better than BART Calculations and Comparisonof Alternat

ComplianceDates

450,000500,000

LNB Credit LNB C dit

350,000400,000

ver 2009 ‐ 2044 Better than BART Threshold

t

t

Emissions Reduct

LNB Credit

LNB Credit

LNB Credit

250,000300,000

l NOx Emissions ov

ng for LNBCredit

ng for LNBCredit

100 000150,000200,000

Total

issions Accountin

missions Accounti

0

50,000

100,000

Adjusted Em

Adjusted E

m

IFLNB and SCR

InstalledConcurrently

by 2018

BART by 2018 with

LNB asInstalled in

2009‐2011

LNB Credit Alt 1 (21/22/23) Alt 2 (23/24/25

Alternative Complianc
Region 9

• EPA has extended the comment period to August 5 

What Happens Next?

EPA has extended the comment period to August 5

based on requests from Navajo Nation and other sta

• Consultation will be ongg g p 

oing during the public comm

• EPA will hold public hearings towards the end of the 

period

• EPA anticipates stakeholders will suggest other alte

BART that ensure greater reasonable progress in ex

more time to comply with the BART limits more time to comply with the BART limits

• EPA will evaluate suggested alternatives and may p

supplemental proposal if those alternatives achieve 

bl th BART

reasonable progress than BART
Region 9

EPA DOI d DOE h itt d t k t th 

Joint Federal Agency Workg

• EPA, DOI, and DOE have committed to work togeth

support stakeholder interests in NGS 

– Create a long-term EPA-DOI-DOI Working p Grou– Work with stakeholders, including the owners of NGS, tribe

CAP water users, and environmental and community group

a roadmap g to achieve long-term g 

oals related to clean ene

sustainable water supplies, and sustainable economic deve

– Complete the Phase 2 report on clean energy options for N

– Support shorter term investments that align with long term 

Support shorter term investments that align with long term 

goals

• The Working Group is a separate process from BAR
Region 9

What Happens After the Comment 

• EPA will review and consider all comments 

making a final decision

• We will respond to all comments in writing a

incorporate any changes to the proposal as of comments in our final decision of comments in our final decision

• Documents will also be posted online and in 

docket for this rulemaking docket for this rulemaking
Region 9

For Further Information

Name Role Phone Em

Colleen 

McKaughan

Associate Director, 

Air Division

520.498.0118 McKaughan.Co

Air Division

Ann Lyons Office of Regional 

Counsel

415.972.3883 Lyons.Ann

Anita Lee Staff Lead, Air 415.972.3958 Lee.Anita

Division