UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WA S HINGTON , D .C. 2 0 46 0



### MAY 2 

# a 2011 OFFICE O F A IR A ND R ADIATIO N Th e Hono rable Edwa rd J

. Ma rke y United S tates House of R epre s entatives 2 108 Ray burn Hou s e O ffice B uilding Was hington , DC 205 15 Dear Congress man Ma rkey : Thank yo u for yo ur l etter o f May 1 7, 2011, to A dministrator L isa Ja ckson regarding qu e sti on s in preparation f or a j oint ove rsight hearing o n " Pro t ec tin g L ong-Te rm T ribal E nergy J obs an d Keepi ng A rizona W ater a nd Power Cos ts A ffordable : Th e Curre nt and Fu ture R ole of th e N avajo Ge nerat ing S tation , " s c h e dule d f or M ay 24 , 2 011 

### by t he S ubcommittees o n W ater a nd Powe r a nd In dian a nd A laska Nat ive A ffairs

. T he Ad mini s trator as ked that I re spo nd o n h er b ehalf

. We re produced yo ur q ue s tion s b el ow in italicized text an d provided o ur responses be low eac h qu estion

. Nava jo Ge nerating Stat ion 

### What is the current p ollution emissio ns p rofile of the Na vajo Gen era ting Station (NG S)? H ow do es i t compare to 

### other power p lants in the U nited S tates? H ow m any C lass 1 Fede ral area s ( national parks great er than s ix thousand acre s in s ize and national wilderne ss area s) doe s NGS emissions impact ? • B a se d o n 2 010 e missions , NOS was the third large st e mitter o f ox ides of ni trogen (NO x) i n the n ation (24 ,0 00 tons), w ith a f acility-wide a verage NO x em i ssio n rate 0 £0

. 28 I b

/ MMBtu , w ith two of thr ee uni ts o perating n ew co mbustion con trol s, Low NO x B urner s an d Se parated Ov erfi re Ai r ( LNB f SOFA) , in s talled in 2 0 0 9 and 20 10

. • N OS impacts el even C lass I Fe deral a reas, includi ng Orand Ca n yo n Na tional P ark. 

### H

as E PA made a Best Availab le Retrofit T echn o logy (BART) deter mination/or the Navajo Generati ng Stati on (N GS) yet ? What is the estimat ed timelin e i n which EPA is expe cted to release a draft and fi nal BART de termination? On ce afinal BA RT determinatio n i s made , what is the approximate time that the owners will have to retrofi t th e p lant with the pollution abate ment technolo gy?

l ntemet Addr ess (URl)

. http ://www

. epa . gov R e<:ycledIR e<: ycl able

_ Printed w ith Vegetable Oil Based Inks on 100"10 PostconSllmer. Process Chlori ne Free Recy<: led Paper• E PA ha s n ot ye t propo sed a B ART det ermin ation f or NOS

. W e int end to i ssue a pr opo sal i n 2 011 a nd a fin al B ART de termination in 2 012.

• Th e C lea n Ai r Ac t requir es f acilitie s to co mply w ith a fin al B ART determinati on w ithin 5 yea r s o f th e e ffe c tive d ate o f the fin al rul e. E mi ss ions reducti ons that a re requ ir ed u nder a n a lte rnativ e to th e B ART program mu st be achi eved w ithin the fir s t regi onal h a z e pl anning p eriod , w hich e nds Jul y 3 1, 20 18

. 

### I s E PA a ware o f a s ta keh olde r pr ocess initi a ted b y th e S alt R iver Proj ect (SRP ) , the o perator an d pa rtial owner of NGS , to de velop a BART p ropo s al ? Sho uld a B A RT pr opo s al e mer ge from th e SRP p ro cess . w ill th e E PA a ssess th eir propo sal a s a pa rt of E

P

A's B AR T det ermi natio n pr o cess? W hat other opportu niti es w ill th e pub lic h ave to 

### c o mm e nt on E PA 's B AR T determi nation?

• EPA i s awa re o f the s takeholder p roce s s ini tiated b y S RP. If the s t akeholders d evelop a propo sal a nd s ubmit it t o E PA, E PA w ill tak e th e inf ormatio n int o con s ideration

. W he n E PA p ropos es o ur B ART d etermination in th e Federal Regi ster , EPA w ill requ est pu blic co mment o n o ur prop osal. W e plan to h old op en h ou s e s and publ ic hearin g s i n lo cation s near N av ajo Ge n e rating S tation , b oth o n th e N avajo Nation , a nd in A rizona

. A ll inf ormati on wi ll be a v ailable on www .r e gulat ion s. go v. 

### G iven that t he ele c tricity gener ated by NG S is used f o r bo th po wer a nd wate r deli very in A r izona a nd ot her W estern s tates , what is th e EP A doin g to 

### e valuate th e im p act on elec trici ty an d wa ter p r ices a s par t of th e " fi v e 

### f ac to r" analy sis f or BAR T dete rm inations? • E PA i s ev a luatin g th e p otential imp act o n el ectricit y pri c e s to co n s umer s of NGS p ow er and the po tential impa ct o n wat er pri ce s to c o nsum e rs of wat er from the C e ntr a l A ri zo na Pro jec t ( CAP ). U nde r th e R egional Ha ze Rul e, a BA RT an aly sis mu st include co n s ideration o f fi ve f actor s: (l ) th e c o s t s o f co mpliance , ( 2) the e nergy and n on-air qu ality e nvironmental imp act s o f c ompliance , (3 ) th e exi s ting p ollution co ntrol s a t th e so ur c e, ( 4) the remaining u seful li fe o f th e s o urce a nd (5) th e d egree of vi s ibilit y impro v em ent whi ch m ay reasonabl y b e an ticipated t o re s ult f rom th e u se o f s u c h technology. EP A w ill ev a l ua te th e imp a cts to e lectricity a nd wa ter co nsum e rs und er Factor 2 : E nergy an d N on- A ir Q uality E nv iro nm e ntal Impact s o f C o mpliance. 

### Could you please out line the p ro cess in which that E P

A ha s c on sulted, a nd w ill co ntinu e to 

### c onsul t, with th e t ribes regardin g the NGS BART de termin at i o n? H ow will EPA ta ke into accou nt the p o tential ec o no mic im pact on the tribe s o f a p roposed B AR T de terminatio n ? • D uring E PA 's pr eliminary w ork on it s BAR T d etermination f or th e Fo ur . Co rn e r s Po wer P lant ( F CPP) and N OS, E P A period icall y up dated Nav ajo Na tion EPA o n o ur a nalys es durin g annual m eetin g s o n air i s su es. B ef ore s i gn in g t he A NP RM in 2 0 0 9, o ur Ac tin g R egional Admini s tra tor ca lled Pr e s ident S hirle y to inf orm him o f th e AN PRM and o ff er c onsulta tion. W e und erst and t he imp ortanc e o fF C PP t o th e Nav a j o N ati o n, and th e i mp ortanc e o f NGS t o bo th th e Nav ajo an d th e H opi Tr ibe

.
Pag e 2 o f 7

### • E PA m et w ith representative s of th e Nav ajo Na tion in September 2009 t o in itiate co n s ultation f or b oth powe r plan ts
. In Nove mber 20 09, we se nt l etters to a ll A rizona T ribe s offer ing to co n s ult o n NGS a nd requested fe edback on ho w each Tr ibe wo uld like th e c onsultation pr o cess t o o ccur . In December 2 009, E PA pro vided a briefing a nd pr esentation to th e m ember s o f th e InterTribal Co uncil o f A rizona. We rec eived c on sultat ion re que s ts fro m the G ila Ri ver Indian C ommunity , H opi T ribe, A k-Chin Indi an Co mmunity , and T ohono O 'od ham Na tion and met with th ose Trib e s ind ividuall y. In a ddition to a d irect co nsultation me eting w ith E PA , the H opi T ribe s ubmitted a report it co mmissioned fro m I C F International o n p otential impact s o f s everal p otential regulator y requirement s o n N OS

. We a re r eviewing th at r eport as p art o f o ur e conomic anal ysis f or NOS . E PA ex tended th e tim e p eriod f or T ribe s to review a nd c omment o n th e AN PRM to M arch I , 2 010, o ver 6 month s after Federal Regi st er publi cation o f the 

### AN PRM.

• E PA i s c onsiderin g th e p otential ec onomic imp act to Tri bes in o ur anal y sis o f th e po tential impacts to e lectricity a nd w ater ra te s. We are p roviding th e opp ortunity to T ribe s to s ubmit w ater v olume and cos t inf ormation s o that o ur analy ses ca n s pe cifica lly fo cus on imp act s to in dividual T ribe s, as all T ribe s h ave di fferent water se ttlement a g reements an d s ource s o f wa ter. 

### Conc erns ha ve b een rai sed about cl osing th e NGS
. Ha s E PA propo s ed clo sing th e NG S? In E

P

A's A dvan c ed Notic e o f Propo s ed Ru l emaking ( AN P R) published in th e F ede ra l R eg ister o n Augu st 2 8, 2009, non e o f the s cenarios that EPA o utlinesfor c om m e nt include s hutting down any o f th e 3 

### boi le r s a t NGS. A s p art of th e BAR T determ in atio n, are y ou con sidering scenario s b ey o nd tho se outlined in the ANPR? 

## If s o, do any o f tho se s ce n arios inv olve s h utti ng do wn a ny o r a ll of the boil ers at NG S?

• E PA h as not proposed to clo se NOS

. EPA 's goa l i s to co nduct a th orough a nalys i s t o de termine o n a c ase-by-ca se ba si s the appropri ate l evel of co ntrol a s BA RT th at i s c o st e ffective , improve s v isi b ili ty, and doe s n ot ha rm T ribes

. E PA did not di s cu ss an y s c enari os in o ur AN PRM that in vol v ed clo sing an y of th e b oiler s at NO S be cause i t is n ot E PA ' s int ention t o require s hutdo wn, dir ectly o r indir ectly, of an y b oiler s at N GS or F CPP. I f th e facility' s o wners pr opo s e to E PA an a lternative to BA RT , E PA w ill co n s ider th e alternative p ropo s al, wh ether o r not it in volv e s cl o sin g o ne o r m ore uni t s. 

### T

he s cena r ios proposed in the Augus t A N PR examine the imp act of installing a v ariety of c ontrol te chnolog ies including Low N Ox Burner s ( LN B), S eparate d Overfire A ir (SOFA) a nd S elec t ive Ca taly ti c Redu ctio n ( SCR). Are the s e technologies in co mmon u s e a t o ther po wer pla nts in the U

ni te d S tates? How m any Us. pla nts have thes e te ch n olog ies insta lled? How many w ill be i n stalling th ese te chn o logies in the nex t 5 year s? Do es EPA factor in th e c onstruc t i o njobs a ssociated with installing the se technologies in the ir e co n omic anal ys es for th e BA RT de termin ation ?

• Th e NO x 

### co ntrol technologies di s cu s sed in the AN PRM, LN B /SO FA and S CR, are c ommon technologies that are u s ed at coa l-fired po wer pl ant s throughout the U nite d S tate s and t he w orld

. L NB and SOFA are c ontrols t hat re duce NO x 

### durin g th e P

age 3 o f7co mbus tion proce ss a nd ar e o ften kn own as "co mbustion control s"

. SCR i s a pos tc ombustion co ntrol techn ology th at removes NO x f orm ed dur ing c ombu stion b y co nverting i t to in ert a tmos pheric nit rogen (N 2 ) . Th e c ombined u se of LNB /SOFA a nd SC R typically represents B e st Ava ilable C ontrol Tec hnology ( BACT), re quired f or th e co nstruction o f an y n ew c oal-fired p ower p lant.

• In th e U nited St ates, b ased o n 2 010 t otal coa l s team c apacity (3 15,900 MW) , LNB was in stalled on 2 40 ,627 M W (76% o f ca pacity) t o r educe e missions o f NO x • As s tated pr eviously, seve ral NO x c ontrol technologies ar e o ften u sed in co mbination w ith eac h ot her. B ecause m any coa l-fired p ower pl ants u sing LNB al so e mploy o ther te chn ologies t o furth er r educe NO x , th e repo rted p erc ent ages w ill e xceed 1 00%. Ove rfire ai r i s u sed o n 80, 339 MW (25% of th e coa l s team capa city), a nd SCR i s u sed on 1 22,947 M W (39% o f ca pacity)

. In 2014 , E PA e xpect s the to tal coa l s team c apacity eq uipp e d with LNB t o in crease to 263, 834 M W (83 % o f e xpected 2 014 coa l s te a m ca pacity o f3 17,700 MW) , OFA to i ncrea s e t o 100 ,814 M W (32%), and SC R to i ncrea s e t o 147 , 986 MW (47%)

. • EPA d oe s no t f actor the c onstruction jobs ass ociated w ith in stallin g the se technologie s int o th e econo mic an alysis for BAR T. F our C orner s Power Plan t a nd D esert R ock 

### Did E PA require the shutting down of any boile r s at the Four Corners P ower Plant (FC? P) in its propo sed O c tober 2010 B ART determina tion? Did the pr oposal to s hu t boilers 1 -3 a t F CPP origi nate with E PA or the owner s of FCPP? H ow is the EPA evaluating the alternative p ropo sal put forwa rd by the Fepp o wners? What opp ortunities have the public had to 

### co mment o n the two p ropo sals? What c onsultatio n has E PA done with the affec ted tribes ?

• E PA d id n ot r equire th e cl osure o f an y b oiler s at F CPP in th e O ctober 20 10 p roposed B ART determin ation

. T he proposal t o clo se U nit s I

- 3 a t FC PP or iginated w ith th e o wn er s o f FCPP , an d was f acilitated by, and i s co ntingent upon , th e sa le o f Sou thern Ca lifornia E di so n 's 4 8% s h a re o f Unit s 4 & 5 ( 1500 MW to tal) to Ar izona Publi c S ervice , w hich o wn s 100 % of U nits I
- 3 (5 60 MW t otal). E PA e valuated the a lternative p roposal p ut f orth b y t he o wners o f FC PP in o ur Fe bruary 2 5, 2011 S upplementa l Not ice, which p roposed to all ow th e owne rs o f FCPP th e fl e xibility t o e ither co mply w ith o ur Oc tober 2 010 p roposed B ART d ete rmin ation, or t he A lternative to B ART prop osed b y FC PP's o wners. E PA d etermin ed th at the a lternative pro posal put f orth b y th e o wners o f FC PP, i f implemented b y Jul y 3 1 , 2 018 , m e et s th e requir em ents o f a BART A lternative u nder t he Regio nal H aze Rule b ecau s e it wi ll re su lt i n m ore emi s sions red uc tions, n ot o nly of NO x, b ut al so s u lfur d ioxide , p articulate m atter , a nd m ercury , co mpared t o o ur Octo ber 201 0 pr oposed BART d et ermin ation

. • T he co mment p e riod f or th e Oc tober 20 10 propo s al a nd th e Feb ruary 20 11 S uppleme ntal p roposal cl o sed o n May 2, 20 11. T hus, t he publi c ha d o ver 6 month s to rev iew a nd co mment o n th e Oc tober 2 010 BART p ropo sa l an d o ver 3 m onths to review and co mment o n th e F ebruary 2011 S upplemental proposal. E PA h eld f our o pen h ouse an d publi c hearin g eve nt s in M arch 2 01 1 : two even ts w ere held o n th e Navaj o Natio n , in
P

age 4 o f7S h iproc k an d Fruitl and , N ew Me xico , ne ar FC PP , o n e e ve nt w as held i n Farm ingt o n , N ew Me xico, a l so ne ar F ep p , an d the fin al ev ent wa s h eld i n Duran go, Colo rad o, a t the re quest of e nvironmental gr oups due t o it s loca tion d ownw ind of FCP? We p rovided Dine Interpreta ti o n s e rv ic e s at th e Ship rock , Frui tland, and F arm ingt on e vent s
. Thre e of the e vents w ere held in the late a fte rnoo n an d e ve n in g ( e .g., o pen h ou se fro m 3 - 5 PM, pu blic hearin g f rom 6

- 9PM ), and o ne e vent, at th e N e nahn eza d C ha p te r H o use ( F ruitl and, N ew M e x ic o) , was held i n th e m o rn i n g (c ombi ned o pe n h o u s e a nd p ub lic heari ng 

### 9 AM

- 

### IPM )

. A ll ope n h ou s e and p ublic h earing eve n ts we re we ll a tte nded

. The N a va j o Na tion E PA attend ed th e o pen h ou s e and p ublic h earin g eve nt s a t a ll fou r l o c a ti o n s. • E PA co n s ulte d w ith the N a v a j o Na tion E P A o n the f o rmat , lo ca tion s , a nd timeframe s f or the ope n h o u s e a nd pub lic h earing s, and Nava jo N a ti o n E PA part icipated in a ll ev en t s wit h EP A repre s entat i ve s. Th e N ava jo N a tion rece ntly r eque sted f orm a l g overnm ent -t o g ove rnm e n t c o n s ultatio n w ith E PA o n th e Four C o m e rs Power Pl ant, a nd E PA R egion 9 w ill b e m eetin g the Pr e si dent S he ll y a nd o ther re pre s entative s of th e Nav a jo Na tion on 

### M ay 19, 2011. There ha s bee n con troversy s urroun ding the iss uing a nd res cind ing of the a ir p ermi t s for the D esert Rock powe r pl ant tha t was p ropos ed to be b uilt o n N avajo land near F armington. New Mexico
. P lease ou tline th e m aj or m ilestones i n pe rmitting th e p lant

. H as E PA i ndica te d to the developers what additional ac tions are needed to se cure the necessary ai r permits to move fo rwa rd w ith th e de velopment o f the plant? Are th ere ac tions E PA needs to take befo re the develo pers can comple te the re q uireme nts to secur e the n ecessary p ermits ? • EPA wi sh e s t o clari fy th at its a ir p rogr am s ta ff d id n ot re scin d th e Preve ntion o f S ig nificant D eteriorat io n ( P S D ) pe rm i t f or the D e s ert R ock E ne rg y F aci lity

. Rath er , a fter E PA i ss ued the pe rmit o n Ju l y 3 1, 20 08 , s everal e nvironme ntal o rg a ni zat ion s and th e S tate o f New M ex ico ( petitio ners ) appe aled th e de ci si on t o E PA 's E n v iro nmental Appeal s Bo ard ( EA B) , which s ubsequ e ntl y rem a nded th e permit b ack t o E PA 's Re gion 9 office f or further review o n S eptember 2 4 , 2 009

. T he E AB' s re m a nd w a s ba sed o n two s epar a t e gro und s. Fi r s t , th e EAB c oncluded th at i t wa s app ropriate t o g rant a moti on filed b y E PA f o r a vo l untary rem and of th e permit. S econd , b a se d o n th e a dmini s trative record f or the p erm it , t he EA B ind ependen tl y c oncluded th at th e en tire pe rmit s ho u ld 

### be re mand ed b eca u se o f o n e ov erarc hi ng i s s ue rel ated to th e B e st Av a il a b le C ontrol Te chn ology ( BACT) a nal ys is c on d ucte d by th e R egion

. • T he EAB w a s e st abl ished i n 1 992 t o f unct ion as a n adm ini strat i ve appeals co urt wi thin E P A and se rve s a s the final Agenc y d eci s ion make r o n a dmini st rative a ppea ls u nde r a ll m ajor en vi ronm ental s tatutes th at the A genc y a dmin i s ters
. Th e EA B co nsi s ts of fo ur en vironm ental a ppeal s j udges , w hich ge nerally s i t in a three

- judge p anel for a part icular c ase . The EA B i s a n impart ial bod y i ndepende nt o f a ll A ge nc y c om pone nt s o u tside th e immed iate Offic e of th e A dm ini s trator
.

• U po n re view o f the f acts c onta in ed 

### i n th e perm i t re cord for thi s c as e, bri e fs filed b y th e P et iti oner s, an d re ply b r iefs s ubmitted by bo th the p ermit a pplicant ( Sith e G lobal P ower , 

### Pa ge 5 o f 7

### LLC) and co unsel fo r E PA, th e EAB in dependently f ound that the p ermit was de ficient b ecause the applicant a nd th e Region fai led to prop erly c onsider th e u s e of int egrated ga sifica tion co mbined cy cle ( IGCC) technology a s an e mis sio n s co ntrol measure in th e r equired BACT ana ly s is. Be cause o f th e fundam ental n ature o f thi s deficiency , in Se ptember 2009 , the EAB remanded th e p ermit in its e ntirety to the Re gion f or further review

. In a ddition, th e EAB gran ted a m otion filed b y Region 9 at t he re quest o f s tafT in t he A dministrator' s o ffice in A pril 20 09 th at th e EA B remand th e p ermit to Re gion 9 so EPA co uld v oluntarily reconsider i ts approach t o seve ral i s sue s r aised in the appeal o f the p ermit ; t he co n s ideration o f IGCC technology i n th e B ACT analysis wa s a lso amo ng th e i ssues c ited in Region 9's vo luntary re mand requ e s t. Be for e g ranting th e Re gion ' s re mand re quest , the EA B co n s idered arguments about fairness an d d ue p rocess tha t h ad b een m ade by th e permit applicant i n a wri tten motion in o pposition to th e Apri l 20 09 reque s t. Th e EAB co ncluded th at th e A pril 20 09 request was no t m ade in b ad f aith and t hat g ranting th e r equest wo uld n ot v iolate th e d ue process requirem ents o f the U n ite d S tates C onstitution

. • Fo llowing issuanc e o f th e remand o rder f rom the EA B i n September 2009, E PA m ade seve ral attempts to wo rk w ith t he permit ap plicant t o d i s cuss h ow i t cou ld ame nd its permi t appl ication to a ddress t he d eficiencies id entified b y th e E AB, t he m atters th at EP A had s o u g ht to reconsider , and o ther r equirement s that had ar isen si nce the p ermit w as in itially prop o sed. T he a pplicant has n o t amended it s p e rmit ap plication to p rovide the inf ormation th at E PA m ust have in o rder to proceed. We note th at no furth er ac tion on E PA's p art i s nec essary b efore th e applicant c an s ubmit it s amended ap plication

. N eve rt he less, E PA remain s w illing to w ork with th e a pplicant to a ddress th ese iss ues at any time. U pon receipt o f an ame nded pe nni t application, E PA wo uld h ave to review th at application , revi s e its ana ly ses and th e permit to addr ess th e i ssues id entified in th e EAB 's re mand ord er and applicable C lean Air Ac t requirement s, p rovide th e pub lic w ith n otice o f th e revi s ed p ermit an d an o pportunity for c omment , and m ake a fin al p ermit dec i s ion

. In ad dition , prior to m aking a fin al deci si on to i s su e th e p ermit, EPA w ould a lso h ave to e n s ur e that it s ob ligations u nder S ection 7 of th e En dangered S pecies Act (ESA ) w ere me t. T hroughout o ur p ermittin g pr ocess f or this faci lity , th e B ureau o f Indian Affa irs h a s b een th e lead f ederal ag ency w ith respect to the S ection 7 ESA co n su ltation w ith the F ish and Wildlife Serv ice. It 

### i s o ur und erstanding th at co n su ltation has no t b een co mpleted. 

### C

ould you p le ase o utline the process in w hich that EPA has co ns ulted , and will c ontinue to c onsult, with the t ribes regarding the development of the Deser t Rockpower plant ?

• L eading up to i s suance of th e p ermit o n Jul y 3 1 , 2 008 , EP A co nducted an ex ten s ive publi c involvement pr oce ss, du ring w hich we co ntacted 41 N at ive A merica n Indian T ribes to ofT er tri bal co n s ultation. Seve n trib es re sp onded to o ur cons ultation letter and/o r s ubmitted co mments o n th e p roposed p ermit. I n a ddition, represe ntatives o f t he Navajo Na tion 's D ine Po wer Au thority r egularly p articipated in meetings and c onference ca lls b etween EPA s taff and the p ermit app licant , and EPA A dministrator J acks on h ad a numb er of co nf e rence c alls w ith ( then) President S hirley of th e Nava jo N ation. In th e eve nt the p ermit applicant s ubmit s an am ended applic ation fo r th e Dese rt Ro ck f acility , Pag e 6 o f7

### E PA wi ll c ontinue to w ork clo sely wi th the N ative A merican Tribe s i n the area as we have in the p ast.
We tru st th at thi s i nformatio n w ill be r e sp on si ve to your qu e st ion s. If yo u need f urther in formati on, p lea se c ontact me, o r h ave you r s t aff con tact Che ry l Mac kay in the Office of Co ngressional an d Intergovernmental Relation s at ( 202) 5 64· 20 2 3.
S incerely,

ina M cCarthy A s sistant Admi nis trator

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