Nov p.2 30 09 09:34a Colleen McKau~han (5201498-1333 

UNrrED STATES ENVIRONMENTAL PROTECTION AGENCY
 

REGION IX
 

15 Hawthorne Street
 

San Francisco, CA 94105-3901
 

November 25, 2009 

Lorri Gray-Lee 

Regional Director, Lower Colorado River 

u.s. Department ofthe Interior
 

Bureau ofReclamation
 

P.O. Box 61470
 

Boulder City, NV 89006-1470
 

RE:	 Request for Additional Infonnation on CAP Water Pricing Concerning the u.s.
 

Environmental Protection Agency's Future Best Available Retrofit Technology
 

Rulemaking
 

~....;>-.---

DearM~ee:
 

./ 

We would like to thank you and your stafffrom the Bmeau ofReclamation 

("Bureau") for meeting with us on October 27,2009. in Phoenix, Arizona to discuss our 

Advanced Notice ofProposed Rulemaking (ANPR) concerning Best Available Retrofit 

Technology (BART) determinations for the Four Comers Power Plant and Navajo 

Generating Station. The discussion was helpful to us in better understanding how a 

future BART rulemaking may impact the price ofwater being supplied by the Central 

Arizona Project ("CAP"), and specifically how any price change could impact Indian 

tribes that use the CAP water. 

As background, the U. S. Environmental Protection Agency Region 9 ("EPA 

Region 9") is tasked with meeting the requirements ofthe Regional Haze Rule and 

reducing visibility-impairing pollutants from the two power plants located within the 

Navajo Nation. as those plants are affecting multiple national paries and wilderness areas, 

including the Grand Canyon in Arizona. [n making our future BART detennination, we 

must consider five factors: the costs ofcompliance (i.e. cost effectiveness), energy and 

non-air quality environmental impacts ofcompliance, existing pollution control 

equipment, the remaining useful life ofthe source, and the degree ofvisibility 

improvement. The ANPR sought public input on only two ofthe five BART factorscost effectiveness and visibility improvements. 

To more fully develop the administrative record that will support our proposed 

BART rulemaking, and after further reflection following our discussion in Phoenix, we 

have some additional questions pertaining to CAP water pricing. As the Bureau owns the 

CAP and has in-depth knowledge about water pricing issues. we believe that the Bureau 

Printed on Rt!C)-'Cfed Paper 
Nov 30 09 09:34a Colleen McKau~han (520)498-1333 p.3 

is the best source for this infonnation. As such, we would appreciate any additional 

infonnation that you could provide in response to the following questions: 

1.	 What portion ofany BART retrofit costs would the Bureau finance? Are there 

existing funds available (e.g. from the replacement fund gathered from user fees) 

that could finance the Bureau's portion? Ifso, would these costs need to be 

passed on to the water users? 

2.	 Ifthe Bureau ultimately receives more than the $55 million required for the 

annual tribal development fund (e.g. from energy sales), can those excess funds 

be used for BART retrofit purposes or do they need to go elsewhere, such as the 

federal treasury? 

Please provide these responses at your earliest convenience, but we would 

appreciate a response by December 28, 2009 ifpossible. Ifyou would like to discuss this 

further, you can call me at 520-498-0118, or have one of your staffmembers call Kate 

Hoag ofmy staffat 415-972-3970. We appreciate your time and attention to our request. 

Sincerely, 

Colleen McKaughan 

Associate Director 

Air Division 

USEPA, Region 9 

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