MEMORANDUM

TO:  Navajo Generating Station Docket

FROM: Colleen McKaughan, Associate Director, Air Division, EPA Region 9

DATE:  March 21, 2013

PARTICIPANTS: See attached sign‐in sheet

SUMMARY: Deborah Jordan, Air Division Director,  gave the attached presentation on the Navajo

Generating Station proposed BART determination to tribal representatives from Navajo, Hopi, Ak‐Chin,

and Gila River. Representatives from the Bureau of Reclamation attended on behalf of DOI. Deborah and

Colleen McKaughan, who also attended, responded to questions from the audience. The meeting was at

the invitation of ITCA.   

Region 9

Overview of EPA ProposOverview of EPA Propos

Rulemaking for

Navajo Generating Stati

Meeting of the InterTribal Council of Arizon

March 21, 2013

Deborah Jordan

Director, Air Division

US E i l P i A R i 9US Environmental Protection Agency, Region 9
Region 9
Region 9

Overview

• Notice of Proposed R lemaking as p b

Notice of Proposed Rulemaking was pub

February 5

• Three parts: Three parts:

– BART: an emission limit for oxides of nitrogen 

achievable with installation of selective cataly

reduction (SCR) in 5 years;

– Alternative to BART: framework to give NGS 

earl NO yx red ti d id NGS ith ductions and provide NGS with m

flexibility on the timing of compliance;

– Discuss o o add t o a a te at es ion of additional alternatives
Region 9

History of NGS

• Located on Navajo Nation and burns coal that 

Located on Navajo Nation and burns coal that 

mined on Navajo Nation and Hopi Tribe

• U.S. Bureau of Reclamation owns 24.3% of N

U.S. Bureau of Reclamation owns 24.3% of N

the benefit of the Central Arizona Project

• NGS plays important roles in Arizona:

– Employment – Source of revenue to Navajo Nation and Hopi T– S f l t i it Source of electricity 

– Electricity also used to pump CAP water and fu

of several water settlement agreements with tri

located in Arizona
Region 9

Why Are We Evaluating NG

• Congress required EPA to improve visibility a

National Parks and Wilderness Areas (Class 

– Regional Haze Program Regional Haze Program

• Large, old sources of air pollution that affect 

in Class I areas must be evaluated to determin Class I areas must be evaluated to determ

new air pollution controls should be required Available Retrofit Technology – BART)

• NGS affects visibility at 11 Class I areas, incl

Grand Canyon and Canyonlands and is subj

BART i t f th R i l H PBART requirement of the Regional Haze Pro
Region 9

How Do We Improve Visibi

• Air pollutants (for example, gases like NO

form particulate matter) cause regional ha

• By reducing emissions of air pollutants tha

haze, we can improve visibility 

• The same pollutants that impair visibility a

concern for human health, therefore reduc

haze also improves air quality haze also improves air quality

• EPA or State Agencies evaluate whether 

controls should be required for all facilities controls should be required for all facilities 

are subject to BART requirement 
Region 9

How is BART determined

• BART is determined based on a 5-factor a

– Factor 1 – How much would controls cost the f– Factor 2 – Are there energy, economic, or othe

environmental impacts of the control?

– Factor 3 – What are the existing controls at the – Factor 4 – What is the remaining useful life of 

f ilit ? facility?

– Factor 5 – How will visibility improve by adding 

controls?
Region 9

Brief Overview of 5-Factor Analys

LNB/SOFA SNCR + LNB/SOFA S

actor 1

Emission Limit 0.24 lb/MMBtu 0.18 lb/MMBtu 

Emission Reductions 10,865 tpy 16,608 tpy 

Total Capital Costs $45 million $84 million 

FTotal Capital Costs $45 million $84 million 

Average Cost Effectiveness $486/ton $1,745/ton 

Electricity Rate for SRP 

Customers in 2018 9.26 cents/kWh 9.28 cents/kWh 

2

Energy-only Water Rate for CAP 

Customers $58/acre-foot $61/acre-foot 

3 Existing Controls LNB/SOFA were installed early and volunt

4 Remaining Useful Life Amortization Period of 20 years; Lease e5

Largest Single Class I area 

Visibility Improvement 2.1 deciviews 3.1 deciviews 

Cumulative Visibility Improvement 16 deciviews 22 deciviews 
Region 9

Why Did We Propose New Cont

• Based on our 5-factor analysis, EPA dete

that installation of SCR + LNB/SOFA at N

red NO ucei i x emissions:

– is cost-effective – would not create a competitive disadvantage – would result in a perceptible improvement in v

th Cl I ff t d b NGS the Class I areas affected by NGS
Region 9

Why is EPA Proposing an Alterna

• Given the importance of NGS to tribes and its loc

tribal land, it is appropriate to provide additional f

• C li ti f f lt ti t BART 

Compliance timeframes for alternatives to BART 

Regional Haze Rule that apply on state land do non tribal land

• Under the Tribal Authority Rule, EPA determines 

when a FIP is necessary and appropriate, includiti li f l i ith th i t timeline for complying with those requirements
Region 9

Th R i l H R l (RHR) i ith BART

Framework for Considering Altern

• The Regional Haze Rule (RHR) requires either BART 

alternative measure that will achieve greater reasonaprogress than BART (Better than BART)

• EPA is proposing to give NGS credit for early and volu

reductions in order to extend the compliance date to 2meeting BART limits meeting BART limits

• This alternative is Better than BART• EPA included a framework for stakeholders to conside

EPA included a framework for stakeholders to conside

beyond 2023 by implementing additional emission redmeet the Better than BART threshold
Region 9

550,000

Better than BART Calculations and Comparisonof Alternat

ComplianceDates

450,000500,000550,000350,000400,000

ver 2009 ‐ 2044 Better than BART Threshold t Emission 

LNB Credit LNB Credit LNB Credit 

250,000300,000

NOx Emissionsov

ng for LNBCredit

ng for LNBCredit

100 000150,000200,000

Total

issionsAccountin

missionsAccountin

0

50,000

100,000

Adjusted Em

Adjusted E

m

If LNB and SCR

InstalledConcurrently

by 2018

BART by 2018 with

LNB asInstalled in

2009‐2011

LNB Credit Alt 1 (21/22/23) Alt 2 (23/24/2

Alternative Complianc
Region 9

• EPA has extended the comment period to August 5 

What Happens Next?

EPA has extended the comment period to August 5

based on requests from Navajo Nation, SRP, and C

• Consultation will be on-gg g p 

oing during the public comm

• EPA will hold public hearings towards the end of the 

period

• EPA anticipates stakeholders will suggest other Bett

BART alternatives for more time to comply with the 

limits

• EPA will evaluate suggested alternatives and may p

supplemental proposal
Region 9

EPA DOI d DOE h itt d t k t th 

Joint Federal Agency Workg

• EPA, DOI, and DOE have committed to work togeth

support stakeholder interests in NGS 

– Create a long-term EPA-DOI-DOE Working p Grou– Work with stakeholders, including the owners of NGS, tribe

CAP water users, and environmental and community group

a roadmap g to achieve long-term g 

oals related to clean ene

sustainable water supplies, and sustainable economic deve

– Complete the Phase 2 report on clean energy options for N

– Support shorter term investments that align with long term 

Support shorter term investments that align with long term 

goals

• The Working Group is a separate process from BAR
Region 9

What Happens After the Comment 

• EPA will review and consider all comments 

making a final decision

• We will respond to all comments in writing a

incorporate any changes to the proposal as of comments in our final decision of comments in our final decision

• Documents will also be posted online and in 

docket for this rulemaking docket for this rulemaking
Region 9

For Further Information

Name Role Phone Em

Colleen 

McKaughan

Associate Director, 

Air Division

520.498.0118 McKaughan.Co

Air Division

Ann Lyons Office of Regional 

Counsel

415.972.3883 Lyons.Ann

Anita Lee Staff Lead, Air 415.972.3958 Lee.Anita

Division