Arizona Navajo coal power plant to shut 1 unit, upgrade 2 others

July 26 Fri Jul 26, 2013 3:46pm EDT

July 26 (Reuters) - Salt River Project said Friday the owners of the 2,250-megawatt Navajo coal-fired plant in Arizona agreed to shut one unit by 2020 and install emissions control equipment on the other two units.

Salt River Project, the public electric and water utility that operates the plant, said in a release that the owners will install selective catalytic reduction equipment to reduce nitrogen oxide (NOX) emissions on the remaining two units by 2030.

The agreement depends on the exit of two of Navajo's current owners, Los Angeles Department of Water & Power (LADWP) and NV Energy Inc, as expected by 2019, and the Navajo Nation not exercising an option to purchase a portion of the plant.

Together, LADWP and NV Energy own the equivalent of almost one unit at Navajo.

If the ownership situation plays out differently, Salt River said the agreement announced Friday would require NOX reductions equivalent to the shutdown of one unit between 2020 and 2030.

Under both scenarios, Salt River said the current owners are committed to cease operation of all coal-fired generation at Navajo no later than Dec. 22, 2044.

The Navajo plant is located on the Navajo Nation, less than 20 miles from the Grand Canyon near Page, Arizona. The plant is owned by the U.S. Bureau of Reclamation, Pinnacle West Capital Corp's Arizona Public Service, LADWP, UniSource Energy Corp's Tucson Electric Power and NV Energy.

There are three 750-MW coal-fired units at Navajo, which entered service in 1974, 1975 and 1976.

In addition, Salt River said the U.S. Department of Interior, agreed to reduce carbon dioxide emissions and study opportunities to transition the federal share of Navajo over time.

The groups in the agreement include the Central Arizona Water Conservation District, the Environmental Defense Fund, the Gila River Indian Community, the Navajo Nation, Salt River Project, the U.S. Department of the Interior and Western Resource Advocates.

Salt River said the groups would submit the agreement to the U.S. Environmental Protection Agency (EPA) for approval.

Salt River did not say how much the agreement would cost but in January warned an EPA proposal could cost up to $1.1 billion.

In February, the EPA gave the Navajo owners a couple of options to reduce NOX emissions.

The EPA said the owners could install selective catalytic reduction equipment on all three of the units by 2018; install the equipment on one unit per year between 2021 and 2023; or come up with their own plan that would reduce emissions by the same amount or more than the EPA's proposal.

Salt River said the agreement Friday would reduce more emissions than the EPA's proposal.

Nitrogen oxides react with other chemicals in the atmosphere to form ozone, which causes a white or brown haze in the air that has been associated with asthma and other breathing disorders, the EPA said.

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