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 CO2

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 CO2; 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 CO2

tons; no need for further emissions reductions

• NN would use surplus tons CO2 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 CO2

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? To maximize potential revenue from CO2 credits.

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

19971998199920002001200220032004200520062007200820092010201120122013

CO2 Emissions, tons

Navajo Generating Station

Four Corners Steam Elec Station

10
Use Highest Previous Mass Emissions 

to develop NN mass limit

CO2 tons year

2000

CO2 tons

2005 

CO2 tons

2012

CO2 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 

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

* 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 (MWh)

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 (MWh) CO2 (short tons)Gross Load (MWh) CO2 (short tons)Gross Load (MWh) CO2 (short tons)Gross Load (MWh) CO2 (short tons)Gross Load (MWh)

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
CO2 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 CO2 allocation to cover the 

direct compliance needs of each plant

• Excess CO2 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 CO2 tons; revenue 

generated would support economic 

development & transition toward renewable 

energy and more diverse economic base

* Assuming NN receives the CO2 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