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# ~ ~~ ~ ; UNITED STATES ENVIRONMENTAL PROTECTION AGENCY ! o = REGION IX '( PR0` 1 `' 75 Hawthome Street. San Francisco, CA 94105•3901 March 25, 2009 CERTIFIED MAIL: 7000 0520 0021 61081728 RETURN RECEIPT REQUESTED Jack E. Davis President and Chief Executive Officer Arizona Public Service Company 400 North 5 th Street Phoenix, Arizona 85004-3902 RE: Information Request Pursuant to Section 114 of the Clean Air Act Dear Mr. Davis: The United States Environmental Protection Agency, Region 9("EPA") hereby requires Arizona Public Service Company ("APS") to provide certain information as part of an EPAinvestigation to determine the Clean Air Act ("CAA" or the "Act") compliance status of the coalfired power plant known as the Four Corners Power Plant ("FCPP"), which is located on the Navajo Indian Reservation approximately 25 miles west of Farmington, New Mexico. Pursuant to Section 114(a) of the CAA, 42 U.S.C. § 7414(a), the Administrator of EPA is authorized to require any person who owns and/or operates an emission source to establish and maintain records, make reports and provide such other information as he or she may reasonably require for the purposes of determining whether such person is in violation of any provision of the Act: In order for EPA to determine whether a violation has occurred, you are hereby required, pursuant to Section 114(a) of the CAA and this information request, to provide responses to the following requests for information regarding the FCPP. Please see Enclosure 1 for instructions and definitions. 1. For each coal-fired boiler at the FCPP, provide a list of all owners and operators, including all previous owners and operators since January l, 1990, including the percentage ownership for each owner. For this same time period, describe any and all partnershipagreements between these owners and operators concerning the FCPP. Describe the decisionmaking mechanisms in these agreements with regard to capital projects at the FCPP. Provide a copy of each such agreement. 2. For each coal-fired boiler at the FCPP, provide a list of all capital projects of greater than $100,000 for which physical construction commenced after January 1, 1990, to the present which provides:

a. the work order number,

Printed on Recycled PaperJack E. Davis

Arizona Public Service Company Page 2 b. proj ect description,

C. authorized expenditure, d. actual expenditure,

e. date of approval, f. project completion date and g: return to commercial operation date. 3. Provide a copy of all capital appropriation requests for capital projects with actual or authorized total expenditures greater than $250,000 at the FCPP for the period of January l, 1990, to the present. For each project, identify the date the coal-fired boiler returned to commercial operation following completion of the capital project or document that the project was never undertaken. 4. For each capital appropriation request identified in paragraph no. 3, provide:

a. a copy of the request with authorized expenditure, authorizing signatures and approval dates, b. total project cost, including any cost incurred by APS and all other costs shared by other owners and operators of the coal-fired boiler,

C. project completion date, d. the date the coal-fired boiler returned to commercial operation following completion of the capital project,

e. equipment specifications, f. cost/benefit analyses, g. all alternative options analyses, h. all proposals, request for proposals and price quotations submitted by equipment suppliers or contractors, i. a copy of all correspondence between APS and any contractor describing any changes in material type or design from the existing component(s) being replaced,Jack E. Davis

Arizona Public Service Company Page 3 a copy of any emissions calculations performed before and after the capital project

was completed, k. any engineering analysis, performance test, or other related documents showing original as-built performance and performance for the period immediately prior to and immediately following completion of each capital project, 1. any evaluation and associated documentation conducted to verify pre- and postcompletion performance of the capital project under any equipment vendor guarantee,

M. all work order and work request proj ect completion reports,

n. all purchase orders and contracts entered into, and

o. whether the capital improvement was associated with a life extension project, capacity increase, efficiency enhancement 

### or reliability improvement. 5. Provide a copy of all engineering analyses, correspondence, memoranda, telephone discussion summaries and any other communication, including but not limited to Board of Directors reports, meeting minutes, annual reports, and reports and/or applications to utility regulatory agencies such as the California Public Utilities Commission, the New Mexico Public Regulation Commission, and the Arizona Corporation Commission, that describe the benefits, provides justification for, or otherwise explains the nature, extent, cost and frequency of each capital project identified in paragraph 3. This request includes all communications both before and after the capital proj ect was undertaken. 6. For the capital projects identified in paragraph 3, provide the Federal Energy Regulatory Commission ("FERC") Property Record Accounts 311, 312, 314 and 316. If your accounting practices differ from those outlined by FERC, provide information analogous to the FERC property records identified above along with any supporting information. 7. Provide the design specifications, as of January 1, 1990, for each coal-fired boiler at the FCPP as follows. Include all documentation and correspondence, including but not limited to engineering calculations and contract specifications used in setting the design values.

a. Steam flow rate, steam temperature and pressure, b. Maximum hourly heat input capacity and an explanation of the assumptions made to determine this maximum heat capacity, which shall include, but not be limited to, the coal heat content (in Btu/lb) and the maximum hourly coal feed rate (in lbs/hr),Jack E. Davis

Arizona Public Service Company Page 4

C. Maximum hourly coal feed rate (in lb/hr), d. Gross hourly capacity (in Mw),

e. Net hourly capacity (in Mw), f. Net heat rate (in Btu/Kw-hr), and g. Design emission rates (in lbs/mmBtu and lbs/hr) for NO, SO Z , CO, PM, and PM, o . 8. Provide the information identified in subparagraphs a. through g. of paragraph 7 at peak and sustained steady state operation, for the one year period preceding and following all capital projects identified in paragraph 3 which were constructed at the FCPP. The information shouldinclude, but is not limited to, actual measurement data and any tests conducted to establish preand post-project coal-fired boiler performance. 9. From January 1990 to the present, provide the following for each coal-fired boiler at the FCPP for each calendar year. To the extent available, please provide in computer readable format such as an Excel spreadsheet or other accessible format:

a. capacity factor on a monthly and annual basis, b, equivalent availability factor on a monthly and annual basis,

C. Operating hours on a monthly and annual basis, d. coal consumption on a monthly and annual basis,

e. maximum hourly average and daily average coal feed rate (in lb/hr) for each month, f. fuel quality (e.g., % sulfur, % ash, and heat content) on a monthly and annual basis, g. total gross and net generation (in Mw-hr) 

## on a monthly and annual basis, h. heat input rate (in mmBtu/hr) on a monthly average and annual average basis, maximum hourly average and daily average heat input rate (in mmBtu/hr) for each month,Jack E. Davis

Arizona Public Service Company Page 5 j. heat rate (in Btu/Kw-hr) on a monthly average and annual average basis, k. identify the top ten annual causes of forced outages and deratings by Mw-hr of lost generation, 1. lost generation during planned outages,

M. Generating Availability Data System ("GADS") reports in both hardcopy and electronic format (e.g. GADS-compatible ASCII format). This information should include for each outage at each coal-fired boiler, the: i. lost generation (inMw-hr) as a result of forced, maintenance, or scheduled outages, ii. duration (in hrs) of all outages, deratings, and curtailments, iii. start date and time of outage, iv. end date and time of outage,

V. North American Electric Reliability Corporation ("NERC") cause code, vi. event type, vii. event number, viii. for the year prior to the outage or derate, the net dependable capacity at the time of the outage or derate, and ix. forced, maintenance or scheduled outages, deratings and curtailments, caused by: (1)" boiler related components, (2) turbine generator components, (3) pollution control performance, (4) balance of Station, and (5) miscellaneousJack E. Davis

Arizona Public Service Company Page 6

n. scheduled or planned boiler unit retirement dates,

o. all historical capability test results of each unit (in Mw), and P. maximum hourly and daily average gross generation (in Mw) for each month. 10. For each outage identified and included in the annual GADS "top 10" report for each coal-fired boiler at the FCPP for the period January 1, 1990, to the present, provide:

a. a copy of the outage report, including the start and end dates and times, the nature or cause of the outage, and b. any remedies taken to restore permanently lost, temporarily derated or curtailed capacity. 11. For each performance test conducted for the purpose of determining the operational rating of each coal-fired boiler at the at the FCPP, provide:

a. the day and hour of the capacity test with any relevant testing protocol specified by the power pool operator, b. the standard operating procedure, or equivalent document, for the performance of the capacity tests. This would include the procedures, specifications, conditions, and other parameters under which the representativeness and accuracy of the tests are determined,

C. all results of capacity tests including the condition (e.g. valve wide open), steam flow and coal used, d. the information requested in subparagraphs a. through c. of paragraph 11 for any other capacity tests not otherwise provided above, irrespective of whether required by rule or conducted for any other purpose including short tests, and

e. a description of any equipment limitations or other limiting factors that restricted capacity. 12. For all add-on SO z control technology utilized at the FCPP, and separately for each coalfired boiler to the extent such information is available, provide the following information:

a. a summary of monthly SO z removal efficiencies from January 1, 1990, to the present, andJack E. Davis

Arizona Public Service Company Page 7 b. the maximum peak and sustained scrubber efficiency on 

### a daily average and

monthly average basis for each unit. 13. From January 2000 to the present, provide summary results of all complete or partial stack tests performed for PM and PM IO for each coal-fired boiler at the FCPP. If such data is available, include separately all test data concerning "back half' or condensible PM and PM, o . 14. If APS seeks to withhold any documents based on a claiin of attorney-client communications privilege or the attorney work product doctrine in its response to this information request, provide a privilege log for each document containing the following information: (i) the date, author(s), every individual to whom the document was originally sent, every individual who subsequently acquired the document, the purpose for which the document was sent to or obtained by those individuals, and the employment titles of the authors and recipients; (ii) the subject matter of the document; (iii) the privilege claimed for the document and all facts supporting the claim of privilege; (iv) the primary purpose(s), including any business purposes, for which the document was made; (v) the question(s) in this information request that the document is responsive to; and (vi) all facts contained in the document that are responsive to a question in this information request. EPA requires APS to fully respond to this information request no later than sixty (60) calendar days after your receipt of this letter. Please submit your response to this information request to: Deborah Jordan U.S. Environmental Protection Agency, Region 9 75 Hawthorne Street San Francisco, California 94105 ATTN: Mark Sims (Air-5) The response to this information request must be certified by a duly authorized officer or agent of APS by signing the enclosed Statement of Certification (see Enclosure 2) and returning it with the response. All information submitted in response to this information request must be certified as true, correct, accurate, and complete by an individual with sufficient knowledge and authority to make such representations on behalf of APS. If you anticipate not being able to respond fully to this information request within the time period specified, you must submit a sworn declaration by a responsible corporate official within ten (10) calendar days after your receipt of this letter specifying what information will be provided within the time specified, describing what efforts have been/are being made to obtain other responsive information and providing a detailed schedule of when such other responsive information can be provided. Upon receipt and based upon such declaration, EPA may extend the time in which responsive information must be provided. Based upon such notification, EPAJack E. Davis

Arizona Public Service Company Page 8 may modify the scope of documents required to be produced. Please be advised that under Section 113(a) of the Act, failure to provide the informatiori required by this letter may result in an Order requiring compliance, an Order assessing an administrative penalty, or a civil action for appropriate relief. In addition, Section 113(c) of the Act provides criminal penalties for knowingly making any false statements or omission in any response required under the Act. EPA may also seek criminal penalties from any person who knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of EPA or in relation to or contemplation of any such matter or case. See 18 U.S.C. § 1519 (2004). The information provided by you may be used by the United States in administrative, civil, or criminal proceedings. You may, if you desire, assert a business confidentiality claim on behalf of APS covering part or all of the information provided to EPA in response to this letter. Any such claim to confidentiality must conform to the requirements set forth in 40 C.F.R. part 2, especially 40 C.F.R. § 2.203. You are advised that certain information may be made available to the public pursuant to 42 U.S.C. § 7414(c) and 40 C.F.R. § 2.301, notwithstanding a claim that such information is entitled to confidential treatment. If no claim of confidentiality is received with your reply, the information may be made available to the public without notice to APS. The requirements of this letter are not subject to the Paperwork Reduction Act of 1980, 44 U.S.C. § 3501 et seq. If you have any questions regarding this information request, please contact Mark Sims (415-972-3965) of my staff, or have your attorney contact Allan Zabel (415-972-3902) of our Office of Regional Counsel. Sincerely,

Deborah Jordan Director, Air Division Enclosures: Instructions and Definitions

Statement of Certification

cc: Mr. Stephen B. Etsitty, Executive Director, Navajo EPA Mr. David Saliba, Plant Manager, FCPPENCLOSURE 1

INSTRUCTIONS l. Provide a separate narrative response to each numbered paragraph and subpart of a numbered paragraph set forth 

### in this information request. To the extent that APS has no responsive information or documents for any particular request, this must be explicitly stated in the response. 2. Precede each answer with the number of the paragraph to which it corresponds and at the end of each answer identify the person(s) that provided information that was used or considered in responding to that paragraph, as well as each person that was consulted in the preparation of that response. 3. Indicate on each document produced in response to this information request, or in some other reasonable manner, the number of the paragraph to which it corresponds. To the extent that a document is responsive to more than one request, this must be so indicated and only one copy of the document need be provided. All documents produced shall be Bates stamped. 4. When a response is provided in the form of a number, specify the units of ineasure of the number in a precise manner. 5. Where documents or information necessary for a response are neither in your possession nor available to you, indicate in your response why such documents or information is not available or in your possession and identify any source that either possesses or is likely to possess such information. DEFINITIONS All terms used in this information request will have their ordinary meaning unless such terms are defined 

### in the Act, 42 U.S.C. § 7401, C.F.R. Part 52, or other Clean Air Act implementing regulations. 1. The terms "document" and "documents" shall mean any object that records, stores, or presents information, and includes writings, memoranda, records, or information of any kind, formal or informal, whether wholly or partially handwritten or typed, whether in computer format, memory, or storage device, or in hardcopy, including any form or format of these. If in computer format or memory, each such document shall be provided in translation to a form useable and readable by EPA, with all necessary documentation and support. All documents in hard copy should also include attachments to or enclosures with any document. 2. The term "capital appropriation requests" shall mean the documents used by station personnel that serve the purpose of describing capital projects for equipment and process changes when seeking management approval for a planned expenditure at the station. These documents are also known as capital improvement requests, authorizations for expenditure, work orderrecords, or other similar names.

3. The term "coal-fired boiler" shall mean all equipment used for the purpose of generating electricity including but not limited to coal handling facilities, boilers, ductwork, stacks, turbines, generators, and all ancillary equipment. 4. The term "hr" shall mean one hour. 5. The term "lb" shall mean one pound in weight. 6. The term "Mw" shall mean a megawatt of electrical energy. 7. The term "Mw-hr" shall mean megawatt hours of electrical energy. The term "Kw-hr" shall mean kilowatt hours of electrical energy. 9. The term "Btu" shall mean the British Thermal Unit of heat. 10. The term "mmBtu" shall mean one million British Thermal Units of heat. 11. The terms "you" or "APS" shall mean the addressee of this information request, the addressee's officers, partners, managers, employees, contractors, trustees, successors, predecessors, assigns, and agents. 12. The term "information request" shall mean this letter and all enclosures. 13. The term "capacity factor" shall mean the percentage of total gross megawatts hours produced by the coal-fired boiler compared to the total amount of inegawatts hours that could have been produced at 100% equivalent availability factor for a given time period. Specify the maximum gross megawatt value used in calculating capacity factor. 14. The term "equivalent availability factor" shall mean the percentage of gross megawatt hours the coal-fired boiler was actually mechanically available to generate electricity in any amount compared to the maximum amount of inegawatt hours the unit would theoretically be able to produce for a given time period without any mechanical restrictions (forced outage or deratings) to the existing coal-fired boiler. Specify the maximum gross megawatt value used in calculating equivalent availability factor: 15. The term "net dependable capacity" shall mean the maximum capacity a coal-fired boilercan sustain over a specified period of time, adjusted for seasonal limitations and less the coalfired boiler capacity utilized for that coal-fired boiler's station service and/or auxiliaries.ENCLOSURE2

STATEMENT OF CERTIFICATION I certify under penalty of law that I have personally examined and am familiar with the statements and information submitted in the enclosed documents, including all attachments. Based on my inquiry of those individuals with primary responsibility for obtaining the information, I certify that the statements and information are to the best of my knowledge and belief true, correct, accurate, and complete. I am aware that there are significant penalties for submitting false statements and information, or omitting required statements and information, including the possibility of fine or imprisonment.

Date: Signature: Name (printed or typed):

Title: