UNITED STATES ENVIRONMENTAL PROTECTION AGENCY REGION IX 75 Hawthorne Street San Francisco, CA 94105-3901

OFFICE OFTHE REGIONAL ADMINISTRATOR 

## JUN 3 0 2011
The Honorable Ben Shelly President oftheNavajo Nation P. O. Box 7440 Window Rock, Arizona 86515
DearPresident Shelly:
Thank you for the letter ofMarch 1, 2010 providing comments and information on the potential economic impact to the Navajo Nation ofnewairpollution controls at the Navajo Oenerating Station in response to the U.S. Environmental Protection Agency's Advanced Notice ofProposed Rulemaking to implementthe BestAvailable RetrofitTechnology requirement ofthe Regional Haze Rule on the Four Corners Power Plant and NOS. By letter dated October 26, 2009, the Acting Regional Administrator of Region IX invited President Shirley to engage in consultation on NOS. From the resulting discussions in 2009 and 2010, I understand that in additionto the directpotential economic impacts to the Navajo Nation and the HopiTribe, manyTribes in Arizona are concerned about the potential effects ofour rulemaking on Tribal water settlement agreements.
EPA is currently conducting an economic analysis to inform our determination ofthe appropriate control technology as BART for NOS. Because ofthe potential impactofour rulemaking on the NavajoNation, in accordance with the Federal trust obligation to Indian Tribes and EPA's May 4,2011 consultation policy, I invite the Navajo Nation to engage in further government-to-government consultation priorto our proposed rulemaking for NOS. Consultation between the leaders ofthe Navajo Nation and senior management at the EPA is critical for the EPA to fully understand the unique impact this rulemaking may have on Tribes. Because the EPA Region IX office is developing the Federal Implementation Plan (FIP) to implementthe BARTrequirement for NOS, Administrator Jackson has determined that consultation should occur within the region.
Ifyou wish to engage in government-to-government consultation onNOS, please have your staffcontact Ms. Laura Mayo at (415) 947-3561. Ms. Mayo will work with your officeto schedule a meeting for me with you and your advisors to initiate consultation. The EPA has received requests for consultation from otherTribes in Arizona, and my goal is for initial consultation meetings with Tribes to occur during my visit to Phoenix in August. Atyour request, my staffwill also invite representatives from the DepartmentofInteriorto participate in any orall ofour consultation meetings.
I understand the critical role the KayentaMine and NOS play in the economy ofthe Navajo Nationand I look forward to further discussions with you on the potential direct impacts ofour rulemaking options to the Nation. I am also aware ofthe important role NOS serves to the Central ArizonaProject, and my staffis working to more fully understand the relationship between CAP and the water settlement agreements that are unique to each Tribe inArizona. IftheNavajo Nation currently or in the future will receive water from CAP, I am enclosing a spreadsheet that requests information on the NavajoNation's water sources, as well as projected volume and cost estimates from 2009

- 2035 for each water source.

Printedon Recycled PaperParticipation is entirely voluntary and this information will help us document and assess the potential additional impacts ofour rulemaking options on all Tribesreceiving water from CAP. Ifyou choose to engage in consultation with the EPA and elect to provide this information, I respectfully request to receive this information early in the consultation process. I am committed to consulting with all affected Tribes that request government-to-government consultationpriorto ourproposed rulemaking.
I look forward to meeting with you again to consult onNOS. In the meantime, please do not hesitate to contact me at (415) 947-8702, or have your staffcontact Ms. Colleen McKaughan, Associate Director for the AirDivision, at (520) 498-0118, or Mr. Nate Lau, Associate Director for the Communities and Ecosystems Division, at (415) 972-3839. Sincerely,

Enclosure