MEMORANDUM

Subject: Tribal Consultation on Navajo Generating Station

From: Colleen McKaughan, Associate Director, Air Division, USEPA Region 9

To: Docket EPA

‐ R09

‐ OAR

‐ 2013

‐ 0009

Date: Consultation Occurred on April 29, 2013

USEPA, Region 9, invited all Arizona Tribes to meet with Janet McCabe, Principal

Deputy Assistant Administrator for the Office of Air and Radiation, and Colleen

McKaughan, Associate Director, Air Division Region 9, for the purpose of

consultation on EPA’s proposed BART determination for NGS. EPA was joined by

Letty Belin, Counselor to the DOI Deputy Secretary, and Kevin Black and Sandra

ETO of Bureau of Reclamation.

We met individually with Robert Palmquist of Strickland and Strickland,

representing Ak

‐ Chin leadership, who were unable to make the consultation. We

went over our presentation (attached) on the NGS BART proposal and responded

to questions. We offered to meet with the Ak

‐ Chin leadership at a later date.

We also met individually with Governor Mendoza and Lieutenant Governor Lewis

of the Gila River Indian Community, several members of the Tribal Council, and

multiple attorneys representing GRIC. (Sign In Sheet attached) The Tribal Leaders

stated their position and EPA responded to questions.

Lastly, we had group consultation open to all tribes in Arizona. The Tribes that

participated included the Gila River Indian Community, the Navajo Nation, the

Tohono O’odham Nation, and ITCA. (Sign In Sheet attached). We went over our
presentation on the NGS BART proposal and answered questions.

Further consultation during the public comment period was offered by EPA.Region 9, Air Permits Office



# Overview of EPA Proposed Rulemaking for Navajo Generating Station

1 

## Janet McCabe
Deputy Assistant Administrator
US Environmental Protection Agency, Office of Air and Radiation 

# Meeting at the InterTribal Council of Arizona
April 29, 2013Region 9, Air Permits Office

2Region 9, Air Permits Office



# Overview

• Notice of Proposed Rulemaking was published February 5

• Three parts:

– BART: an emission limit for oxides of nitrogen ( NO

x 

# ) achievable with installation of selective catalytic reduction (SCR) in 5 years;

– Alternative to BART: framework to give NGS credit for early NO

x 

# reductions and provide NGS with more flexibility on the timing of compliance;

– Discussion of additional alternatives

3Region 9, Air Permits Office 

# History of NGS

• Located on Navajo Nation and burns coal that is mined on Navajo Nation and Hopi Tribe

• U.S. Bureau of Reclamation owns 24.3% of NGS for the benefit of the Central Arizona Project

• NGS plays important roles in Arizona:

– Employment

– Source of revenue to Navajo Nation and Hopi Tribe

– Source of electricity

– Electricity also used to pump CAP water and fulfill terms of several water settlement agreements with tribes

located in Arizona

4Region 9, Air Permits Office 

# Why Are We Evaluating NGS?

5 

# • Congress required EPA to improve visibility at National Parks and Wilderness Areas (Class I areas)

– Regional Haze Program

• Large, old sources of air pollution that affect visibility
in Class I areas must be evaluated to determine if new air pollution controls should be required (Best Available Retrofit Technology

– BART)

• NGS affects visibility at 11 Class I areas, including Grand Canyon and Canyonlands and is subject to the BART requirement of the Regional Haze ProgramRegion 9, Air Permits Office



# • Air pollutants (for example, gases like NO

x 

# that form particulate matter) cause regional haze

• By reducing emissions of air pollutants that cause haze, we can improve visibility

• The same pollutants that impair visibility are a concern for human health, therefore reducing haze also improves air quality

• EPA or State Agencies evaluate whether new controls should be required for all facilities that are subject to BART requirement 

# How Do We Improve Visibility ?

6Region 9, Air Permits Office



# • BART is determined based on a 5

- factor analysis

– Factor 1

– How much would controls cost the facility?

– Factor 2

– Are there energy, economic, or other environmental impacts of the control?

– Factor 3

– What are the existing controls at the facility?

– Factor 4

– What is the remaining useful life of the facility?

– Factor 5

– How will visibility improve by adding

controls? 

# How is BART determined?

7Region 9, Air Permits Office



# Brief Overview of 5

- Factor Analysis

8 

### LNB/SOFA SNCR + LNB/SOFA SCR + LNB/SOFAFactor1 

### Emission Limit 0.24 lb/MMBtu 0.18 lb/MMBtu 0.055 lb/MMBtu

Emission Reductions 10,865 tpy 16,608 tpy 28,573 tpy

Total Capital Costs $45 million $84 million $541 million

Average Cost Effectiveness $486/ton $1,745/ton $2,240/ton

2 Electricity Rate for SRP

Customers in 2018 9.26 cents/kWh 9.28 cents/kWh 9.32 cents/kWh

Energy

- only Water Rate for CAP

Customers $58/acre

- foot $61/acre

- foot $66/acre

- foot

3 Existing Controls LNB/SOFA were installed early and voluntarily in 2009

- 2011

4 Remaining Useful Life Amortization Period of 20 years; Lease extended to 2044

5 Largest Single Class I area Visibility Improvement 2.1 deciviews 3.1 deciviews 5.4 deciviews

Cumulative Visibility Improvement 16 deciviews 22 deciviews 35 deciviewsRegion 9, Air Permits Office



# • Based on our 5

- factor analysis, EPA determined
that installation of SCR + LNB/SOFA at NGS to

reduce NO

x 

# emissions:

– is cost

- effective

– would not create a competitive disadvantage for NGS

– would result in a perceptible improvement in visibility at the Class I areas affected by NGS 

# Why Did We Propose New Controls?

9Region 9, Air Permits Office



# • Given the importance of NGS to tribes and its location on tribal land, it is appropriate to provide additional flexibility

• Compliance timeframes for alternatives to BART under the Regional Haze Rule that apply on state land do not apply

on tribal land

• Under the Tribal Authority Rule, EPA determines if and when a FIP is necessary and appropriate, including the timeline for complying with those requirements 

# Why is EPA Proposing an Alternative?

10Region 9, Air Permits Office



# • The Regional Haze Rule (RHR) requires either BART or an alternative measure that will achieve greater reasonable progress than BART (Better than BART)

• EPA is proposing to give NGS credit for early and voluntary NO

x 

# reductions in order to extend the compliance date to 2023 for meeting BART limits

• This alternative is Better than BART

• EPA included a framework for stakeholders to consider dates beyond 2023 by implementing additional emission reductions to

meet the Better than BART threshold 

# Framework for Considering Alternatives

11Region 9, Air Permits Office

0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000

If LNB and SCR Installed Concurrently
by 2018 BART by 2018 with

LNB as Installed in

2009

- 2011 LNB Credit Alt 1 (21/22/23) Alt 2 (23/24/25) Alt 3 (24/25/26)Total NOx Emissions over 2009-2044

Alternative Compliance Year Scenarios 

## Better than BART Calculations and Comparison of Alternative Compliance Dates

Better than BART ThresholdAdjustedEmissions Accounting for LNB CreditAdjustedEmissions Accounting for LNB CreditAdjustedEmissions Accounting for LNB Credit Emission Reduction Bridge LNB Credit LNB Credit LNB Credit LNB Credit

12Region 9, Air Permits Office

13 

# • EPA has extended the comment period to August 5, 2013 based on requests from Navajo Nation, GRIC, SRP, and

CAWCD

• Consultation will be on

- going during the public comment period

• EPA will hold public hearings towards the end of the comment period

• EPA anticipates stakeholders will suggest other Better than BART alternatives for more time to comply with the BART

limits

• EPA will evaluate suggested alternatives and may put forth a supplemental proposal 

# What Happens Next?Region 9, Air Permits Office

14 

# • EPA, DOI, and DOE have committed to work together to support stakeholder interests in NGS

– Create a long

- term EPA

- DOI

- DOE Working Group

– Work with stakeholders, including the owners of NGS, tribes and other CAP water users, and environmental and community groups, to develop a roadmap to achieve long

- term goals related to clean energy, sustainable water supplies, and sustainable economic development

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

– Support shorter term investments that align with long term clean energy goals



# • The Working Group is a separate process from BART 

# Joint Federal Agency WorkgroupRegion 9, Air Permits Office

15 

# • EPA will review and consider all comments before making a final decision

• We will respond to all comments in writing and incorporate any changes to the proposal as a result

of comments in our final decision

• Documents will also be posted online and in our docket for this rulemaking 

# What Happens After the Comment Period?Region 9, Air Permits Office

16 

# For Further Information

Name Role Phone Email

Colleen McKaughan Associate Director,

Air Division 520.498.0118 McKaughan.Colleen@epa.gov

Ann Lyons Office of Regional

Counsel 415.972.3883 Lyons.Ann@epa.gov

Anita Lee Staff Lead, Air

Division 415.972.3958 Lee.Anita@epa.gov