 EPA developed the Regional Haze Program in response to a requ

Congress to restore visibility at National Parks and Wilderness A

areas) to natural visibility conditions

 The Best Available Retrofit Technology (BART) provision of the R

Program requires large old sources of air pollution that affect visClass I areas to be evaluated against five factors to determine if 

pollution controls should be required

 NGS is subject to BART because it is a large, old source of air po

affects visibility at 11 Class I areas, including Grand Canyon and N ti l P k National Parks

 Ai r poll t t llutants (i l di (including, parti l d ticles and gases F t 1 C t f C li

like NOx that form particles) cause haze

 Reducing emissions of pollutants that cause 

haze should reduce visibility impairment

 Factor 1 – Cost of Complian

 Factor 2 – Energy and Non-

Impacts of Compliance

 Factor 3 – Existing Controls 

 The same pollutants that impair visibility are 

a concern for human health

 NOx is reduced using combustion controls 

(low NOx burners - LNB) or post-combustion 

t l ( l ti t l ti d ti 

 Factor 4 – Remaining Usefu

Source

 Factor 5 –Degree of Anticip

Improvement controls (selective noncatalytic reduction -

SNCR or selective catalytic reduction - SCR)

p

1
LNB/SOFA SNCR+LNB/SOFA 

Emission Limit (pounds per million British

Thermal Units or lb/MMBtu) 0.24 0.18 

Facto

Total Capital Cost $45 million – already spent $84 million 

Annualized Capital Cost $5.2 million $29 million 

Annual Operation

& Maintenance Cost $0 $19 million 

o

Total Annual Cost ($/year) $5.2 million $23.5 million 

r 1Emissions Reductions (tons per year) 10,865 16,608 

Average Cost Effectiveness $486

/ ton $1,745

/ ton 

Incremental Cost Effectiveness ($/ton) n/a $4,110

/ ton (vs. LNB) 

Will SCR force NGS to close? No: Increase in Net Present Value from SCR

= $648 mill

Factor 2*

Will SCR force NGS to close?

(compliance by 2018)

No: Increase in Net Present Value from SCR $648 mill

Market Case

= $673 million

Electricity Rate in 2018 for SRP Customers

(compliance by 2018)

9.26 ¢/kWh

(Baseline) 9.28 ¢/kWh (0.2%) 

CAP Water Rates (Energy only) in 2018

(compliance by 2018)

$58 per acre foot (AF)

(Baseline)

$61/AF

(5% increase to Tribes)

(compliance by 2018) (Baseline) (5% increase to Tribes) (

3Existing Controls at NGS LNB/SOFA was installed on all

3 units at NGS ove

Hot‐side ESPs for PM and Wet FGD for 

4Remaining Useful Life of NGS EPA used a default amortization period of 20 years. Exte

Navajo Nation goes to 2044 (over 30 ye

2 1 dv 3 1 dv 

5

Largest Single Class I Area Visibility Improvement

2.1 dv

(35% change in dv)

3.1 dv

(40% change in dv)

Cumulative Visibility Improvement

(11 Class I areas)

16 dv

(33% change in dv)

22 dv

(45% change in dv)

* EPA’s Proposed BART determination (February 5, 2013) includes additional analysis and discussion of poTribes located in Arizona and other CAP water users

2
Based on our five-factor analysis, EPA proposed a BART emission limit of 0.055 lb/

rolling average of 30 boiler operating days), achievable with the installation of SCR

the existing LNB/SOFA at NGS, with a compliance date 5 years following the final r

 Circumstances related to NGS create unusual and 

i ifi t h ll f 5 li 

 The Regional Haze Rule requ

sig

nificant c

h

allen

ges for

a 5-year compliance Alt ti t BART th t hi 

schedule

 Continued operation of NGS and Kayenta Mine is 

important to Navajo Nation and Hopi Tribe

 NGS powers pumps that supply water to much of 

Alternative t

o BART th

at achi

reasonable progress than BA

 In addition, because NGS is l

Land, EPA is also using our adiscretion to propose an exte

 NGS powers pumps that supply water to much of 

Arizona, including many Tribes (Congressionally approved water settlement agreements)

for an Alternative to BART

 Proposed to credit NGS with the early and voluntary installation of LNB/SOFA o

year in 2009-2011 (LNB Credit) 

‒ Early installation of LNB/SOFA resulted in more emission reductions over 2009-20

have been achieved if LNB/SOFA and SCR were installed concurrently for BART

 EPA proposed to require NGS to comply with the BART emission limit of 0.055 l

unit per year in 2021, 2022, and 2023 (Alternative 1)

 With LNB Credit, total NO

x emissions from 2009-2044 under Alternative 1 are le

emissions under BART therefore Alternative 1 emissions under BART, therefore Alternative 1 achieves greater reasonable prog

achieves greater reasonable prog

 EPA invited interested stakeholders to submit other Alternatives that meet our 

3
 NGS is owned by six entities:

‒ US Bureau of Reclamation (24.3%)‒ Salt River Project (SRP) (21.7%)

 A group of seven stakeholder

Technical Work Group (TWG) Alternatives to BART

‒ Los Angeles Department of Water & Power (21.2%)‒ Arizona Public Service (14%)‒ NV Energy (11.3%)‒ Tucson Electric Power (7.5%)

 The State of Nevada passed a 

that prohibits NV Energy’s conNGS beyond 2019

 Therefore, two entities that ow

intend to divest from NGS by 

 State Law in California prohibits LADWP’s 

continued ownership in NGS beyond 2019

* SRP, US Department of the Interior, NavajCommunity, Environmental Defense Fund, CConservation District, and Western Resource 

 On July 26, 2013, TWG submitted to EPA an Agreement that includes, among o

recommended Alternative to BART (TWG Alternative)

The TWG Alternative:

 Establishes a lifetime cap in NOx Emissions over 2009-2044 based on EPA’s propos

determination for NGS (2009-2044 NOx Cap)

 Due to on-going lease and ownership uncertainties, includes several alternative op

(TWG Alternatives A and B) for meeting the 2009-2044 NOx Cap

 TWG Alternative A 

‒ Requires significant emission reductions by December 31, 2019 through closure of one 

of electricity generation, and

‒ Requires significant emission reductions by December 31, 2030 though installation of 

with a limit of 0.07 lb/MMBtu

 TWG Alternative B 

‒ Establishes a second cap in NOx Emissions over 2009-2029 (2009-2029 NOx Cap) equ

one unit at NGS, in addition to the 2009-2044 NOx Cap 4
TWG Alternative: Maintain Emissions below 2009‐2044 NOx Cap using one 

operating scenarios:

A1 A2 A3 

Ownership Possibilities

If:

LADWP and NV Energy exit without selling ownership interest or by

selling to an existing NGS Participant.

And: Navajo Nation does not

purchase ownershipinterest.

Navajo Nation

purchases interest (up

to 170 MW).

Navajo Nation

purchases interest (

to 170 MW).

And: Owners increase

capacity (does nottrigger permit).

Owners do notincrease capacity(triggers permit).

Summary of Capor Operating

2009‐2044 NOX Cap =494,899 tons:

By 12/31/2019, close

one unit.

By 12/31/2019, close

one unit.

Three units could

remain open.

or Operating 

Scenarios

,

By 7/1/2019, meetlimit of 0.055

lb/MMBtu through

installation ofLNB/SOFA concurrently

ith SCR (BART

By 12/31/2030, meet

NOx limit of 0.07

lb/MMBtu on twounits.

By 12/31/2019, increase

net capacity by nomore than 189 MW.

By 12/31/2030, meet

NOx limit of 0.07

lb/MMBt t

p

By 12/31/2019, curt

generation by at

least 561 MW.

By 12/31/2030, mee

NOx limit of 0.07

lb/MMBt t

with SCR (BART

determination).

lb/MMBtu on two

units.

lb/MMBtu on tw

units.

EPA’s Estimate of Total NOxEmissions over 2009‐2044

435,819 tons 461,816 tons 

 Public Comment Period closes on January 6, 2014 EPA will work expeditiously to review all comments and respond to all substant

writing in our final rulemaking for NGS 

5