# Navajo Nation Perspective on

Carbon Rule

October 30, 2014

Washington, DC

1

# What is Navajo Nation interested in?

• Ability to develop a NN Carbon Plan

• Cooperative relationship with plants that benefits

all parties under 111(d)

• Ability to trade allowances under a regional

trading program to generate funds for economic

development and a more diverse economic base

• To make it work, need to have adequate CO 2



# emission limits to address plant needs and NN

needs

2

# Why should plants work with NN on

111(d)?

• Power plants can expect the NN to acquire more
environmental regulatory from USEPA

• NN requested from USEPA a mass emission limit
based upon historical generation, rather than
future generation

– Requested limit will allow NN to provide more
flexibility than likely limit from USEPA

– Request is based on NN’s unique situation

– seeking a
thorough analysis from USEPA



# • Power plants overall compliance could improve
under NN direct regulatory oversight

3

# Plants and NN have a history of

working together for mutual benefit

• NNEPA is the CAA Title V Permitting authority

pursuant to USEPA delegation of authority

• NTUA letter in advance of 111(d) proposal

• BART Rulemakings; TWG Agreement (NGS)

• FCPP & Navajo mine NEPA

• NGS & Kayenta Mine NEPA

• AZ Corp. Commission on retail markets

4

# Navajo Nation Proposed

Approach to 111(d)

The following is a proposal for discussion

and is subject to change based upon future

developments

5

# General Approach

• Consideration for planned reductions in overall
emissions, including CO 2 

# ; FCPP in 2014

, NGS in

2019

• NN requested that NN receive a mass emission limit from USEPA under 111(d) program

– Limit would be based upon historical emissions



# • Power plants would receive full allocation of CO 2 

# tons; no need for further emissions reductions

• NN would use surplus tons CO 2 

# to participate in regional trading programs to raise revenue to
promote economic development within NN

6

# Why four building block approach

doesn’t work for Navajo Nation

• Most of generated power is used elsewhere

• There is no existing NGCC to transfer load to

• Much of the Power used in NN comes from no/low carbon

sources

• Demand

- side reductions ineffective at best, unhelpful at

worst

– Per capita energy use in NN is only 15% that of the most

efficient state.

– Actually need to increase energy use to promote economic development.

– At least 15,000 homes on the NN have no access to electricity.
Any carbon trading should benefit the NN’s electrification

program.

7

# Rate and Mass Limit Development

• USEPA proposal indicates that plant limits to be based

upon future generation rather than historical emissions

.



# • NN has proposed alternative for plants within NN The approach

NN has

proposed to

USEPA

The approach

proposed by

USEPA

8 Develop

Rate per 4

Building

Block

equation

Calculate

future cap Hist CO

2 

### Hist

Generation

Future Generation Renewables

Demand side

Future Mass

Emissions Cap Future Mass

Emissions Cap

NGCC

Rate, lb / MWh

# Approach to plant mass limits

- EPA proposal and NN proposal

• EPA proposal will likely result in a low mass
emission limit for the power plants, based on

either:

– If EPA uses 2012 plant historical emission and
generation levels for remaining units, those will result
in low mass emission limits for plants, or

– If EPA uses an emission rate and reduced future
generation to develop limit for plants, that will result

in low mass emission limits



# • NN is proposing to provide higher emission
limits, based upon highest historical emission
levels for remaining generation

9

# Use Highest Previous Mass Emissions

for All Units for NN mass limit

Why? T o maximize potential revenue from CO 2 

# credits.

0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,00019971998199920002001200220032004200520062007200820092010201120122013 

# CO2 Emissions, tons

Navajo Generating Station

Four Corners Steam Elec Station



### 10

# Use Highest Previous Mass Emissions

to develop NN m ass limit

CO 2 tons year 2000

CO 2 tons 2005

CO 2 tons 2012

CO 2 tons

Navajo Gen. Sta. 20,458,265 2002 16,939,714 16,015,459 14,491,314

Four Corners 17,483,077 1999 20,137,721 19,677,241 16,925,558

total 

## 37,941,342* 37,077,435 35,692,699 31,416,873

4% reduction 36,423,688 35,594,337 34,264,991 Heat rate reductions

already performed 6% reduction 35,664,861 34,852,789 33,551,137

* 

### This is the recommended budget. Because of the special situation of the Navajo, it is recommended that

the Navajo Nation use the proceeds from sale of extra allowances to help finance clean energy projects on

the Navajo Nation or retraining of coal power plant and mine workers.

11

# FCPP4 and FCPP5, history and proposed

limit (based on CEM data)

FCPP4 FCPP5 Total

Year CO2 (short tons) Gross Load (MW

- h) CO2 (short tons) Gross Load

(MW

- h) CO2 (short tons) Gross Load (MW

h)

1997 5,991,228 5,926,184 4,906,453 4,453,743 10,897,681 10,379,927

1998 6,096,299 5,760,992 5,885,706 5,720,457 11,982,004 11,481,449

1999 6,195,231 5,934,388 6,428,132 5,736,104 12,623,363 11,670,491

2000 5,352,503 5,257,791 6,497,203 6,300,747 11,849,706 11,558,538

2001 6,119,688 6,098,810 5,771,812 5,731,027 11,891,500 11,829,836

2002 5,926,809 6,074,687 3,850,894 4,029,650 9,777,703 10,104,338

2003 5,817,306 6,291,672 5,749,732 6,062,412 11,567,038 12,354,084

2004 4,326,123 4,786,316 5,750,042 6,547,973 10,076,165 11,334,289

2005 5,621,337 6,149,229 5,250,989 5,743,703 10,872,326 11,892,933

2006 5,794,840 6,291,678 5,667,745 6,187,222 11,462,585 12,478,900

2007 5,061,996 5,600,113 4,885,573 5,248,589 9,947,569 10,848,702

2008 5,723,138 6,355,736 4,182,497 4,642,489 9,905,635 10,998,224

2009 5,459,418 5,974,906 5,617,604 6,049,611 11,077,022 12,024,518

2010 3,626,956 4,108,940 5,761,354 6,199,661 9,388,310 10,308,601

2011 4,964,919 5,574,795 4,875,727 5,233,279 9,840,646 10,808,075



### 2012 5,012,381 5,414,260 

### 5,102,038 5,426,454 

### 10,114,419 10,840,713

2013 4,487,390 4,900,388 4,377,789 4,618,287 8,865,179 9,518,676

Max 6,195,231 6,355,736 6,497,203 6,547,973 

### 12,623,363 12,478,900

Avg 5,386,915 5,676,523 5,327,135 5,525,377 10,714,050 11,201,900

Median 5,621,337 5,926,184 5,617,604 5,731,027 10,872,326 11,334,289

Min 3,626,956 4,108,940 3,850,894 4,029,650 8,865,179 9,518,676



### 12

# NGS, history and proposed limit (based

on CEM data)

NGS1 NGS2 NGS3 Total 2/3 of Total

Year CO2 (short tons) Gross Load (MW

h) CO2 (short tons) Gross Load (MW

h) CO2 (short tons) Gross Load (MW

h) CO2 (short tons) Gross Load (MW

h) CO2 (short tons) Gross Load (MW

h)

1997 6,109,679 6,014,545 5,758,314 5,307,124 6,020,420 5,028,619 17,888,412 16,350,288 11,925,608 10,900,192

1998 6,392,090 6,363,639 6,622,626 5,470,309 6,786,280 6,084,867 19,800,996 17,918,814 13,200,664 11,945,876

1999 6,109,928 5,579,306 7,004,319 6,857,285 6,384,932 5,883,404 19,499,180 18,319,996 12,999,453 12,213,330

2000 6,515,439 6,684,090 6,438,040 6,302,335 7,184,242 6,607,485 20,137,721 19,593,910 13,425,147 13,062,607

2001 5,878,709 5,949,957 7,043,405 6,785,027 6,740,012 6,126,377 19,662,126 18,861,361 13,108,084 12,574,240

2002 6,684,087 6,495,462 6,828,040 6,303,305 6,946,138 6,560,136 20,458,265 19,358,902 13,638,843 12,905,935

2003 6,197,593 5,800,418 7,170,757 6,418,381 5,456,420 5,524,530 18,824,771 17,743,330 12,549,847 11,828,887

2004 7,117,833 6,572,757 6,083,548 5,763,493 7,036,164 6,919,663 20,237,545 19,255,913 13,491,697 12,837,275

2005 6,091,527 5,627,713 6,943,991 6,465,578 6,641,723 6,410,153 19,677,241 18,503,444 13,118,161 12,335,629

2006 7,256,846 6,628,619 6,406,110 6,173,428 6,408,624 6,249,195 20,071,581 19,051,242 13,381,054 12,700,828

2007 7,127,351 6,564,139 6,423,284 6,117,213 6,628,357 6,446,777 20,178,992 19,128,129 13,452,661 12,752,086

2008 6,594,965 6,090,473 6,836,510 6,536,481 6,999,915 6,418,869 20,431,389 19,045,823 13,620,926 12,697,215

2009 7,224,612 6,549,116 6,945,198 6,378,340 4,740,968 4,632,562 18,910,778 17,560,017 12,607,185 11,706,678

2010 6,639,514 6,468,160 4,841,216 5,059,107 6,317,654 6,340,964 17,798,384 17,868,231 11,865,589 11,912,154

2011 5,384,525 5,276,076 6,416,610 6,464,176 6,717,208 6,693,100 18,518,343 18,433,353 12,345,562 12,288,902

2012 6,184,134 5,798,167 5,306,560 5,807,408 5,434,864 5,758,602 16,925,558 17,364,177 11,283,706 11,576,118

2013 6,288,854 6,348,225 5,344,162 5,741,290 6,185,771 6,580,535 17,818,788 18,670,050 11,879,192 12,446,700

Max 7,256,846 6,684,090 7,170,757 6,857,285 7,184,242 6,919,663 20,458,265 19,593,910 13,638,843 13,062,607

Avg 6,458,687 6,165,345 6,377,217 6,114,722 6,389,982 6,133,285 19,225,886 18,413,352 12,817,258 12,275,568

Median 6,392,090 6,348,225 6,438,040 6,302,335 6,628,357 6,340,964 19,662,126 18,503,444 13,108,084 12,335,629

Min 5,384,525 5,276,076 4,841,216 5,059,107 4,740,968 4,632,562 16,925,558 16,350,288 11,283,706 10,900,192



### 13

# CO 2 

# tons under NN plan

Tons

NN Mass Cap Requested from USEPA 37,941,342

Four Corners tons under this plan 12,623,363

Navajo tons under this plan 13,638,843

Total for plants 26,262,207

Total Surplus Reserved for NN 11,679,135

14

# Example of a Mutually Beneficial

Arrangement

• Plants receive CO 2 

# allocation to cover the

direct compliance needs of each plant

• Excess CO 2 

# tons made available because of

NN request for special accommodation from

USEPA will be assigned to the NN as Surplus

tons

• NN could trade any unused CO 2 

# tons; revenue

generated would support economic

development & transition toward renewable

energy and more diverse economic base

* Assuming NN receives the CO 2 

# tons at no cost to NN

15

# Closing Points

• NN can provide better environmental

regulatory oversight at the plants pursuant to

a NN Carbon Plan

• NN needs additional resources for economical

development and for transition to a more

diverse economic base

• NNEPA implements regulatory requirements

that provide meaningful input and fair

treatment for all who live on the NN

16