Arizona Utilities Face EPA Pressure for Stronger Haze Reduction Measures

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The U.S. Environmental Protection Agency (EPA) has proposed that three Arizona power plants, whose owners are currently planning a range of environmental upgrades, expand the current measures to meet EPA's regional haze rules.

According to The Arizona Republic, the power plants are Cholla, near Joseph City, which is owned by Arizona Public Service Company (APS), a subsidiary of Pinnacle West Capital Corporation (NYSE:PNW) (Phoenix, Arizona); the Coronado generating station near St Johns, which is owned by Salt River Project (SRP) (Tempe, Arizona); and the Apache generating station, which is owned by the Arizona Electric Power Cooperative (AEPC) (Benson, Arizona).

The power utilities will have a chance to reply to the EPA's pollution clean-up proposals. The EPA is scheduled to make a final decision on November 15. Any expense the utilities incur eventually will be paid by customers.

The proposed controls are aimed at curbing nitrogen oxide (NOx) emissions, which cause haze conditions at 18 national parks and wilderness areas in the region. Views of the Grand Canyon are claimed to be reduced by 30%. The EPA said that the proposed changes also will benefit public health. NOx reacts with other chemicals in the air to form ozone, which can affect asthma sufferers, young children and the aged.

The power companies and Arizona's Department of Environmental Quality had made suggestions on how to deal with haze, and SRP would add "selective catalytic reduction" (SCR) to one of the two generators at Coronado. But the new EPA proposals call for the addition of equipment, costing at least $100 million, to the other generator at the plant, as well as two generators at Apache and three at Cholla.

The additional SCR equipment would be in addition to the $500 million SRP is already investing in emission reduction at Coronado. APS has spent $350 million on pollution control equipment at Cholla and claims that emissions have been reduced by about 65%.

Although SRP and APS could challenge the EPA's position in court, SRP said the additional SCR measures would not shut down Coronado. The AEPC estimates that executing the EPA proposals could cost a minimum of $80 million. AEPC is a small non-profit utility.

The utilities have been working with the state to implement plans that would reduce pollution at a lower cost than that the plans proposed by the EPA.

Environmental group Earthjustice filed a suit in 2008 against the EPA on behalf of the Grand Canyon, Sierra Club, National Parks Conservation Association and other environmental groups, charging that the agency missed deadlines for limiting haze in Arizona.

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