### p.2 Nov 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 ofwaterbeing 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-impairingpollutants 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, existingpollution control equipment, the remaining useful life ofthe source, andthe degree ofvisibility improvement. The ANPR soughtpublic input on only two ofthe five BART factorscost effectiveness 

### and visibility improvements.

To more fully develop the administrative record that will support ourproposed BART rulemaking, and after further reflection following our discussion 

### in Phoenix, we have some additional questions pertainingto CAP waterpricing. As the Bureau owns the CAP and 

### has in-depthknowledge about water pricing issues. we believe that the Bureau

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



### 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 Bureaufinance? Are 

### there existing funds available 

### (e.g. from the replacement fund 

### gathered from 

### user fees) that could finance the Bureau's portion? 

### If

### so, would these 

### costs need 

### to be 

### passed on 

### to the water users?

2. Ifthe Bureau ultimately receives more than the $55 millionrequired 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, orhave one ofyour staff

### members call Kate Hoag ofmy staff

### at 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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