MEMORANDUM TO FILE 

TO: Docket No. EPA-R09-OAR-2013-0009; Approval of Air Quality 

Implementation Plans; Navajo Nation; Regional Haze Requirements for Navajo 

Generating Station; Proposed Rule 

FROM: Anita Lee 

Date: March 18, 2013 

Subject: Record of Meeting with Central Arizona Water Conservation District during 

Public Comment Period 

1. Participants at Meeting 

 Janet McCabe, EPA 

 Tamara Saltman, EPA 

 Colleen McKaughan, EPA 

 Anita Lee, EPA 

 David Modeer, CAP 

 Marie Pearthree, CAP 

 Tracey Tucker, CAP 

 Phil Lorang, OAQPS 

2. Date and Location of Meeting: 

 March 18, 2013, Washington, DC 

3. General Statement of the Topic of Discussion: 

 CAWCD expressed preference for compliance date to be as late as possible, ideally 2028 

4. Copy of Any Materials Presented or Received (attached): 

Central Arizona Project

Water Delivery Energy Rates

 CAP Historical and Adopted rates (dark blue line) reflect gradual but significant cost increases over time, driven 

operations and maintenance and non‐BART regulatory requirements (e.g., MATS, Ash Rule) – includes cost of L

Separated Overfire Air (LNB/SOFA)- Current rate (2013) is $53 per acre‐foot – paid by all CAP customers, including cities, Indian tribes, agricult

industrial customers

 The NGS owners, the Navajo Nation and Peabody Coal are in the process of renegotiating various contracts (e.

supply) that expire in 2019. Although the negotiations are nearing completion, before a Record of Decision (RO

agreements may be entered by the Secretary of the Interior, the new contracts must undergo a stringent NEPA 

up to five years (2018).- These items may push the CAP rate above $80 (50‐60% higher than 2013) by 2020 (green line)

 Until the NEPA process is completed, significant uncertainty will still exist with respect to the future of NGS. Ev

will be ongoing risk and uncertainty related to potential litigation. Uncertainty will influence the ability to fina

investments such as those required by BART.

 BART Alternative #3 (SCR in 2023‐2026) would require permitting, planning and design expenditures to begin i

time as the ROD is expected. Major procurement and capital expenditures would need to begin in 2021, which 

allow long‐term financing for SCRs (purple line) and, if necessary, baghouses (red line).- CAP rates could exceed $100 –$120 (90‐125% higher than 2013) by 2025

 BART Alternative #1 requires the installation of SCRs (orange line) or SCRs plus baghouses (red line) 2021‐2023

major capital expenditures while significant risk still would exist with respect to NEPA. Under such conditions, impossible and all of those costs would have to be absorbed in current operating period rates.

- CAP rates would exceed $120 –$150 as early as 2020 (125‐200% higher than 2013)

- The NGS utility owners have made it clear that this would cause the cost of NGS to exceed that of other e

alternatives, and that plant closure is almost certain in this scenario

BART = Best Available Retrofit Technology LNB = Low NOx Burners NGS = Navaj

BH = Baghouse (particulate control) MATS = Mercury and Air Toxic Standards SCR = Selecti

CAP = Central Arizona Project NEPA = National Environmental Policy Act SOFA = Sepa
NGS Timing Constraints
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20406080

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Cost ($ per acre‐foot)

Central Arizona Project

Water Delivery Energy Rate

BART Alternative #3

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20406080

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Cost ($ per acre‐foot)

Central Arizona Project

Water Delivery Energy Rate

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