Correspondence Management System

Control Number: AX-12-000-4621

Printing Date: March 12, 2012 06:52:39

Citizen Information

CMS

CitizenlOriginator: Modeer, David V

Organization: Central Arizona Project

Address: 23636 North Seventh Street, Phoenix, AZ 85024

Constituent: N/A

Committee: N/A Sub-Committee: N/A

Control Information

Control Number: AX-i 2-000-4621 Alternate Number: N/A

Status: Pending Closed Date: N/A

Due Date: Mar 26, 2012 # of Extensions: 0

Letter Date: Mar 8, 2012 Received Date: Mar 12, 2012

Addressee: AD-Administrator Addressee Org: EPA

Contact Type: FAX (Facsimile) Priority Code: Normal

Signature: DX-Direct Reply Signature Date: N/A

File Code: 404-141-02-01_141_b Controlled and Major Corr. Record copy of the offices of Division

Directors and other personnel.

Subject: Daily Reading File- Central Arizona Water Conservation District letter concerning potential

change in focus of on-going NGS analysis

Instructions: DX-Respond directly to this citizens questions, statements, or concerns

Instruction Note: N/A

General Notes: N/A

CC: OAR - Office of Air and Radiation -- Immediate Office

OEAEE - Office of External Affairs and Environmental Education

OITA - Office of International and Tribal Affairs

OW -Office of Water -- Immediate Office

Lead Information

Lead Author: Frances Kwok

Office: R9

Due Date: Mar 26, 2012

Assigned Date: Mar 12, 2012

Complete Date: N/A

Instruction: DX-Respond directly to this citizen’s questions,

statements, or concerns

Lead Assignments:

Assigner Office Assignee Assigned Date Due Date Complete Date

Ken Labbe OEX R9 Mar 12, 2012 Mar26, 2012 N/A

Instruction:

OX-Respond directly to this citizen’s questions, statements, or concerns

Supporting Information

Supporting Author: N/A

‘v;ç

Page 1 of 2

Ct I
Correspondence Management System

Control Number: AX-12-000-4621

Printing Date: March 12, 2012 06:52:39

No Record Found.

History

Actipn By

Ken Labbe

Frances Kwok

Frances Kwok

Office

QEX

R9

R9

Action

Assign R9 as lead office

Accepted the group assignment

j Take task

Date

Mar 12, 2012

Mar 12, 2012

Mar 12, 2012

Comments

Commentator iComment Ite

[ No Record Found.

Supporting Assignments:

CMS

Assignor lOffice Asslgnee Assigned Date

Page 2 of 2
O3O8J2(12 THU d:41 FAX 623 869 2332 Central Arizona Project OCI/OO3

P.O. Box 43020- Phoenix, AZ 85080-3020

‘‘‘ 23636 North Seventh Street • Phoenix, AZ 85024

CENTRAl. ARIZONA PROJECT 623-869-2333 • www.c a p-az. corn

March 8, 2012

Via USPS and Facsimile: 202-501-1450

The Honorable Lisa Perez Jackson

United States Environmental Protection Agency

Arel Rios Federal Building

1200 Pennsylvania, Avenue

Washington, DC 20460

Via USPS and Facsimile: 202-208-5048

The Honorable Kenneth Lee Salazar

United States Department of Interior

1849 C Street, NW, Mail Stop 7329

Washington, DC 20240

Via LISPS and Facsimile: 202-586-4403

The Honorable Steven Chu

United States Department of Energy

Forrestal Building

1000 Independence Avenue, SW

Washington, DC 20585-1000

Dear Administratoriackson, Secretary Salazar, and Secretary Chu:

I am the General Manager of the Central Arizona Water Conservation District (CAWCD). CAWCD

manages the Central Arizona Project (CAP), a critical water delivery system supporting over 80% of

Arizona’s population and economic activity. Because the Navajo Generating Station (NGS) supplies over

90% of the power required to operate the CAP, I read with great concern Administrator Jackson’s letter

of February 16, 2012 to Secretaries Salazar and Chu. I am writing to detail those concerns and point out

important information relevant to the NGS and its future in the context of Administrator Jackson’s

letter.

The CAP and NGS are inexorably linked. The Colorado River Basin Project Act of 1968 authorized both

construction of the CAP and U.S participation in a coal-fired power plant to provide power for pumping

renewable Colorado River water into the state of Arizona through the CAP system. The NGS actually

resulted from an environmental compromise in response to the potential of building additional dams

along the Colorado River near the Grand Canyon. The United States acquired an entitlement to 24.3% of

the output of NGS for CAP purposes. Any power in excess of the power requirements of CAP is sold to

help repay the construction costs of the CAP and to help fund the costs of Indian water rights
THU l4 42 FAX 623 869 2332 Central Arizona Project OO2/OO3

g I

The Honorable Lisa Perez Jackson

The Honorable Kenneth Lee Salazar

The Honorable Steven Chu

March 8, 2012

Page 2

settlements in Arizona. Anything that affects the operation and the cost of NGS has significant and far

reaching effects on CAP, the federal government, and the people of Arizona.

CAWCD’s principal concern with the letter is that it suggests a potential change in focus of the on-going,

and as yet incomplete, NGS analysis. As you are aware, CAWCD and other affected parties are actively

participating in the Best Available Retrofit Technology (BART) rulemaking process initiated by the EPA in

August 2009. Indeed, the letter refers to implementation of the Regional Haze Program, BART, and its

focus on visibility improvements in national parks and wilderness areas. However, the letter quickly

leaves this issue behind, focusing instead on “human health” and “advancing our nation’s renewable

energy future.” While these are always important goals, the issue currently before the EPA is the BART

rulemaking process. With so much at stake for CAP and the people of Arizona, including Tribal

communities, completion of this rulemaking process is critical so that the NGS owners can make an

informed decision regarding the future of the plant.

In recent congressional testimony, Administrator Jackson indicated that a decision on BART for NGS

would be issued by late summer. With the publication of the portion of the National Renewable Energy

Laboratory’s NGS study relating to the five statutory BART factors, there would appear to be sufficient

information available now upon which to base a decision. That study is inconclusive as to whether

additional NO,, emissions control technology at NGS would produce any visibility impacts detectible by

the human eye in the Class I areas proximate to the plant. Consequently, the existing pollution control

system at NGS, which is the best available for reducing SO2 coupled with Low NO,, Burners with

Separated Over Fire Air (LNBISOFA), ought to be considered as the best available control technology at

this time. Should such retrofit technology as Selective Catalytic Reduction (SCR) or SCR plus baghouses

be required at a cost of about $500 million to $1.13 billion, substantial negative impacts to Tribal,

agricultural, and municipal and industrial users of CAP water will occur. In addition, should such retrofit

also be required before key uncertainties are resolved (such as the plant site lease, transmission and

transportation easements and rights of way, water supply arid coal agreements, etc.), this decision

would likely trigger the permanent shutdown of NGS by its owners. That result is untenable for CAWCD

and operation of the CAP. In any event, we respectfully request that the EPA make a determination on

the BART question as quickly as possible.

CAWCD is also concerned that the letter appears to be leading toward a near-term renewable energy

option for NGS. The National Renewable Energy Laboratory is prepared to look at renewable energy and

transition issues in greater detail through a more inclusive second phase of the alternatives and impact

study on NGS Air Visibility Regulations. It is most appropriate that such a review be conducted by NREL

in a manner that is consistent with the first phase and includes participation of all of the affected

parties. As it stands, renewable energy sources cannot replace the CAP’s needs now or in the near (and

perhaps distant) future. CAP requires a base load supply that renewable energy alternatives currently

cannot provide. Therefore, the EPA’s focus must remain on issuing a BART determination as soon as

possible.
U/Ui5/.U1I THU 14:42 FAX 623 869 2332 Central Arizona Project - OO3/OO3

The Honorable Lisa Perez Jackson

The Honorable Kenneth Lee Salazar

The Honorable Steven Chu

March 8, 2012

Page 3

Finally, the Administrators letter makes several references to the “tribes, t’including protecting their

economic interests and “mitigating the impacts” upon them. With regard to the ultimate outcome on

NGS, different tribes will be affected in different ways. As discussed in the NREL study and CAWCD’s

comments thereto (both the initial two-page comments and the subsequent letter sent to EPA Region 9

Administrator Jared lumenfeld and Interior Deputy Secretary David Hayes), the effects that changes to

NGS, including attempts to incorporate renewable energy alternatives, would have on tribes will vary

depending on whether the tribe is the Navajo Nation, the Hopi Tribe, tribes that have settled water

rights claims such as the Gila River Indian Community, or tribes that have yet to settle their claims.

Nonetheless, there is no disputing the overall negative effect of shutting down NGS or requiring

expensive retrofits. Moreover, if renewable energy eventually becomes a technically and economically

feasible alternative to power the CAP, it is uncertain if the plant owners would participate in

development of one or more renewable energy alternatives specifically for NGS rather than

participating in other projects that may meet their individual needs,

At CAWCD, we are focused on providing water to Arizona in the most efficient and economical manner,

while preserving our other great natural resources. This service requires balancing many considerations.

From a visibility perspective, we believe that balance is achieved by the current LNB/SOFA system at

NGS. We encourage a prompt resolution to the BART process.

Thank ou for your consid ration,

4L22

David V. Modeer

General Manager