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November 8, 2010

Host: Ted Simons

Navajo Generating Station

  |   Video
  • A public forum will be held November 15th to consider the impact on water and energy users if expensive federal pollution regulations force the closing of the coal-fired Navajo Generating Station in Northeastern Arizona. Susan Bitter Smith, President of the Central Arizona Project’s Board of Directors, discusses the issue.
    More information on the forum
  • Susan Bitter Smith - President, Central Arizona Project
Category: Energy   |   Keywords: energy, navajo,

View Transcript
Ted Simons: Pollution from the Navajo generating station has long been identified as a major source of haze at the Grand Canyon. The coal-fired power plant is in northeastern Arizona near Page. In the '90s plant owners invested around $400 million on scrubbers to cut sulfur dioxide emissions. Today they're installing technology to reduce haze forming nitrogen oxides at a cost of $47 million. But the environmental protection agency could require a more expensive method of cutting nitrogen oxides. If that happens, critics say the price of Central Arizona Project water could rise sharply. Here to talk about that is Susan Bitter Smith, chairman of the central Arizona project board of directors, and Rob Smith, senior field organizing manager for the Grand Canyon chapter of the Sierra Club. Let's start with you, Susan. The idea that new rules are needed to protect the environment. Valid?

Susan Bitter Smith: Actually not valid. The emission issue we're now trying to control is a visibility issue, not a health issue. It's actually steam that's coming now as a result of it having been installed. That does maybe mix with the clouds coming in from the L.A. basin over the Grand Canyon. But the visibility to the naked eye is minimal and the implications are huge in the state of Arizona.

Ted Simons: Let's get to those in a second, but let's start with the basics. Is the influence minimal?

Rob Smith: If you stuck your head down the smokestack you would die. This is toxic stuff coming out. The fourth largest source of nitrogen oxide in the country, and those are major power plants. To their credit, SRP, which runs the plant, did install the controls as part after legal settlement in the '90s. This is the other half, the law that requires this was passed in 1977. So it's been long time coming.

Ted Simons: But the idea that these new regulations could put the entire plant, the entire generating station in jeopardy, how do respond to that?

Rob Smith: That depends on whose numbers you use. Just today Arizona public Service company announced that they are making major changes, they proposed major changes at the four corners power plant, which is a major source much power for here in the metro area. Part of that proposal will be to agree to the exactly the same controls that are being possibly proposed here at the Navajo plant.

Susan Bitter Smith: Four Corners is a different issue. An older plant, that didn't already have the retrofit in place. What we're dealing with now is already been taken care of at the Navajo generating station. We're talking about a second layer of controls that go back to visibility issues, not health emissions. So Four Corners is a separate rule-making.

Ted Simons: The idea that folks on your side are just underestimating the benefit the as far as the environment is concerned, how do you respond to that?

Susan Bitter Smith: We aren't. We are serving to the public as well, and we're looking at all the possible outcomes. Navajo generating station has had those retrofits to deal with those health concerns. There have been several passes at that and there's still additional retrofits that have to go into place. But then to take the next level, the potential billion dollar retrofit and put that because there's steam emission coming in the CO2 side makes no sense to us.

Rob Smith: It's not about steam. Steam is water vapor, that's not what the EPA is seeking to regulate. The law doesn't require that. What you -- what is happening is there's a plume of nitrogen oxide that either moves across the four corners plant and adds to either acid rain or ozone formation in places as far away as Mesa Verde or blows into the Grand Canyon. And in fact it does degrade visibility, which is what triggers it. It also has health impacts. While that may not be technically what this rule is about, in fact, it creates asthma and lung problems if you breathe that.

Susan Bitter Smith: It is about steam. It is about visability, and what is concerning to us at the CAP level is the dominoes tumble and they're huge. Not only impact the cost of water to Arizonans, that impacts the cost of agribusiness survival in central Arizona and its survivability as an industry in Arizona. It also has impact to the Indian nations. It's a major employment source for the Navajos.

Ted Simons: The idea this could be an economic disaster if the plant can't handle these regulations. What do you say?

Rob Smith: The concern that Susan and the Central Arizona Water Conservation District have is with business decisions made by utilities like Salt River Project and APS, which are some of the owners here. They may be looking at a scenario where coal simply isn't worth it anymore, but in fact, in Arizona, investment in renewable energy solar plants would be the way to go. Simply saying no we're not going to do anything, I think ignores the fact the contribution these plants make to climate change and therefore drought as well at health impacts and we ought to be talking about what are the energy sources of the future that will create jobs there.

Ted Simons: Do you believe climate is being changed by things like the Navajo generating station?

Susan Bitter Smith: The Navajo generating station is not impacting climate change in the kind of effort that the EPA is attempting to resolve it W I would argue that in fact the CAP stance is one of survivability on water rates. We do have renewable supplies part of our portfolio and of course ultimately we will need to look at other additional kinds of supplies. But the Navajo generating station is 95% of our power source. And enough power and an affordable -- in a quick timetable is not a realistic situation. We're probably looking at a nuclear situation, which is 15 to 20 years away best case. So the Navajo generating station needs to stay in place, with the scrubbers that are in place to provide affordable and appropriate water supplies that don't deplete the groundwater charge area.

Ted Simons: We need to make clear, the water supplies, this is pumping water from the Colorado River to Phoenix and to Tucson. This power is needed, CAP is the --

Susan Bitter Smith: We have the largest single user of water in Arizona and water is going uphill in the CAP system and back down in the central valley. If the CAP goes away and we don't have power to supply it, many, many water users in Arizona have to use groundwater resources which here to for have been saved and stored for future use.

Ted Simons: Prohibitive costs using these resources, the idea that maybe solar panels over the canal which I believe a lot of folks thinks should be tried or looked at, may not be reasonable. Talk to us about that. Sounds like someone is seeing this and you're seeing an entirely different scenario.

Rob Smith: We use the numbers the utility provided, Salt River Project, to look at the cost to water. And for this pack of peanuts, costs about 2½ times as much as my water bill will go up in Phoenix. And we do use about half of our water in Phoenix comes from CAP. This is affordable spread over time. And spread over the millions of customers. So this is affordable to do. That's why APS is using the same controls. And in fact, a lot of the power that's actually in fact used to pump CAP water comes as nighttime extra power from the Palo Verde Nuclear Station. This is basically about finding a place to sell the power from Navajo. It's not about power supply.

Susan Bitter Smith: It's not a bag of peanuts. It's very, very serious. The cost of water could go up as much as four times. That means the cost of goods in Maricopa County, Pima and Pinal counties and the rest of the state can go up four to five times. And it means that the farmers who are part of our economic cycle in Arizona may either be out of business or depleting the groundwater that we need to have for future resources.

Ted Simons: That quadruple increase, is that a worst case scenario? A likely scenario.

Susan Bitter Smith: It's figures substantiated by a study commissioned to look at the reality. The utility providers and the CAP, which is not a utility company, would tell you it's much more severe, it's not a bag of peanuts, is it a serious, serious problems for ratepayers.

Rob Smith: The numbers are worse case scenario based on very high cost, worse case scenario perhaps of cost of controls, least economic -- least environmental benefit, and a series of things. It might -- no doubt water rates will go up a little bit, but in Phoenix we already pay less and use more than most every other city in the United States. So we have relatively cheap water and we use a lot more of it. Perhaps the investment if we're concerned about water supply should be in water conservation measures. That might be a better place to put money.

Ted Simons: Last question, is there room for compromise here? Where is the bar? Where is the level where you can go or where critics of this plan in general can go?

Rob Smith: Mother nature and the politics of the world in this country are moving towards controlling carbon emissions from coal plants. To simply say let's not do anything is not an option. But to take this opportunity and say, is there a better place to put our money, should we invest in renewable resources like solar, and put jobs on replacement jobs in the reservation would be a better solution.

Susan Bitter Smith: No one is saying we shouldn't address it no. One is saying we shouldn't be looking at renewables. CAP has renewables in our portfolio. What we are saying is that have you to be realistic about how quickly and how substantially renewables can be integrated into the portfolio and be reliable. That cannot be done overnight. This is a process that's going to require time and honesty and looking at it. And that's what ware saying to the EPA. We need time and some effort in looking at other kinds of energy sources that can be brought into the state of Arizona.

Ted Simons: We have to stop it right there. Good discussion. Thank you so much for joining us.

Rob Smith and Susan Bitter Smith: Thank you.

Senate President-elect Russell Pearce

  |   Video
  • One day after winning re-election, Senator Pearce was selected by his colleagues to serve as Senate President when the 50th Legislature convenes in January. He’ll discuss his plans and priorities for the coming year.
  • Russel Pearce - Senator
Category: Legislature   |   Keywords: state legislature,

View Transcript
Ted Simons: He's probably best known as the sponsor of Senate Bill 1070, the state's new immigration law. But Senator Russell Pearce is also a budget hawk who has chaired appropriations committees in both the state house and senate. He's a former chief deputy for the Maricopa County Sheriff's Office, he once directed the State's Motor Vehicle Department and next year he'll be the President of the Arizona State Senate. Here to talk about his priorities as senate president is Senator Russell Pearce. Good to see you. Thanks for joining us.

Russell Pearce: Thank you.

Ted Simons: Let's get right to it. We've got a deficit of $800 million, 1.5 billion coming up next year. What are you going to do?

Russell Pearce: That deficit is about 900 million, for this year. The year we're in. What we're going to is -- the people that pushed for 302 to fail really shame on them. It's a program that has no -- it has no priorities, it has -- I shouldn't say priorities, it has no responsibilities. And now because of that, they'll have you believe that was going to save children's programs, it's the opposite. They put education at risk because there's been -- spending millions of dollars for just stuff they want to do rather than the core programs that are already in place. I worry. We're going to have to balance the budget. I'm going to use gimmicks and bonding and we've done everything we can as this deficit has been ugly. Not just Arizona nationally. It's not going to be a fun time, but we'll do our job. We know what we have to do. We're going to grow the economy. Jobs is our number one issue. And how you create an environment to grow jobs is the private sector. That's what produces wealth in jobs. We're going to focus on incentives, creating an environment conducive to productivity. Lower the regulatory burden on businesses and families, and it will get to be a better place.

Ted Simons: You mentioned 302. I want to ask you what you thought the voters were saying. What message they were sending when dedicated funding for open space, dedicated funding for early childhood development, and earlier this year a sales tax increase. Voters said yes to the increase and they want to keep those things protected. What kind of message are they sending?

Russell Pearce: Well, one is the tax increase was done in the special session, election, very few folks turned out. I'm not sure of the message. Everybody I talked to said it was -- was pretty rabid about no tax increase. We're overtaxed now. Especially tax increases are tough any time. During a recession? Dr. Prescott, a Nobel Laureate prize Winner from ASU came down -- he said the worst thing you can do during a recession is raise taxes. It does more damage than good. It drives the economy down, you lose jobs, and so I'm disappointed. I've got to be honest. The 302 message, you know, they spent a lot of money. We didn't have money to put out the truth. I think folks thought they were doing something good. What they've done, they've put education and these programs at risk because that -- the failure of 301 and 302 has added another $450 million to our deficit. It's going to be a tough time.

Ted Simons: But they will say that what they're doing is trying their best to protect these things knowing that if they don't protect them, or at least fearing if they don't protect them, you're going to cut them.

Russell Pearce: Well, that's not true. The money was going to go, and it was in the language that was put on the ballots. That money would have gone to the very programs they think they're protecting. So we would have been very cautious. We understand our responsibility to the taxpayers and the voters. We understand they voted for it once, and we would have made sure those dedicated dollars went to those issues, but in an appropriate way with oversight and transparency and accountability.

Ted Simons: The idea of AHCCCS, of actually just sacrificing all of federal funding for AHCCCS, it's been reported that you are willing to say goodbye to the $7 billion if it means not having to do the maintenance requirements for AHCCCS to keep that money alive. First of all, are you willing to sacrifice that kind of money?

Russell Pearce: The media has never let the truth in for the story. That's not the way it was said. It's just like going to Dillard's. If you don't have money, you can't buy stuff just because it's 75% off. What I said was, if they're requiring you to spend money you don't have, maybe you have to not take that money. You can't keep taking money that is incentivizing you to spend money you don't have. We already have a deficit. The last thing want to do – we’re not the federal government. We can't just print money. Shame on them for what they do. We have a constitutional obligation to balance the budget. You can't keep spending when you don't have it. You can't spend money you don't have. The state ought to have the same accountability. That was my message. Sometimes you have to say no to the federal government if the incentive is to spend money you don't have.

Ted Simons: That seems to be the incentive here. Are you saying this is a time to say no to the federal government?

Russell Pearce: I'm saying if -- we're already doing so much. You have to decide, we talk about AHCCCS, one out of five Arizonans are on AHCCCS. It's the fifth most richest welfare health care program in the nation. People have to recognize that. There are things you can do, there's reforms, we spend $8 million a year on nonemergency transportation. Wait, I understand emergencies. But when you don't have any money, we're going to continue the fund nonemergency transportation? In other words, a cab to the movies? A cab to the doctor? We've got to wake up.

Ted Simons: You were also quoted in a direct quote, family, churches, and communities, they've got to provide. What happens if there is no family, there is no family that wants to, can, or is willing to help? How far do you go on something like this?

Russell Pearce: We're talking about a collaborative effort. They've got to join in this. We've ignored the principles of personal responsibility today. We think government should have to do everything for you. There's a little personal responsibility, you have to step up and in the past that's the way it was always done. Do you realize we didn't have AHCCCS several years ago at all? The counties took care of it. The counties did it.

Ted Simons: Should we go back to that, the idea of indigent care by way of state and county?

Russell Pearce: Well, there's a lot of debate going on there. But can we do things differently? Yeah. Can you have more accountability? I love to quote John Stossel. You think health care is expensive today, wait until it's free. There has to be accountability. There's got to be reforms. A co-pay a premium, if you're going to get free stuff, maybe you at least ought to contribute something toward the cost of that free stuff.

Ted Simons: What about those who can't? And there are a lot of folks who simply can't.

Russell Pearce: You know, I can tell you everybody will tell you they can't. Most people can. Give up the cigarettes, Dr. Pepper, you have to contribute. There are certainly cases where they can't. But most of those are few and far between. We have a system today where people take advantage -- I can tell you, and I won't get into names, personal stories that come to me every day from folks, who are just livid because they know the neighbor who drives a nicer car than them, who's on AHCCCS, and food stamps. They know folks who are paid under the table and so they don't have to show an income. And they get AHCCCS, food stamps. Because eligibility is high. Very high.

Ted Simons: But --

Russell Pearce: Three times as high as some states.

Ted Simons: Are we willing to sacrifice those who legitimately can't make it just to get those who might be able to put in --

Russell Pearce: You know, we hire people with people -- you put into place policies that allows them to make good decisions, but little research, maybe a little investigation, a little homework, we have an obligation, a fiduciary responsibility to protect the takes payers from fraud and abuse. That's what I'm after.

Ted Simons: You mentioned tax cuts and Dr. Prescott and the idea of never raising tax cuts in a recession. Areas on a state universities also have other economist who look at things different. What they're saying S. when you cut government jobs, when you cut public sector jobs, as opposed to cutting spending and cutting programs, cutting those jobs hurts the economy more than cutting programs. I can tell you I’m not quite buying into that.

Russell Pearce: No. There's a study, people always use a study they like best. I understand that. But there's a study out that shows it takes about four private sector jobs to pay for every public sector job. Private sector is what produces wealth. It's the private sector that grows jobs. Not government. Government consumes wealth. It doesn't produce wealth.

Ted Simons: So when the hospital association says rolling back AHCCCS requirements could cut tens of thousands of health care jobs in the state, what do you say?

Russell Pearce: You know, it's interesting, the same as the cheap labor crowd at immigration. When you and I subsidize, 2.7 billion a year to -- you still have this segment that's -- profits over patriotism. They benefit from the cheap labor so they would have you believe it would destroy everything. In a free market system, simply not true. It's because people benefit because they participate. They sign them up for AHCCCS, they get paid. Last thing they want, it slows the taxpayer, is subsidizing those events.

Ted Simons: You mentioned immigration. Will you push a bill, push a bill, not necessarily introduce, but push a bill that challenges or clarifies the 14th Amendment?

Russell Pearce: Absolutely. Let me tell you, you cannot ignore the fact that it's unconstitutional. If one reads the history, and understands the 14th Amendment came as a result of the Scott decision, which was a terrible decision that was just a slap to African-Americans as if they weren't real humans. The Republican Congress at that time wrote what's called the Civil Rights Act of 1866. And then they said, let's give that constitutional strength. They put it in the constitution. And it was to protect those folks who we had a jurisdictional responsibility to. You know what the American Indians were not recognized as citizens after the 14th Amendment. Congress had to pass three acts to recognize that. Simply your GPS location is not the criteria.

Ted Simons: We've also done programs on this, and we understand that 100 some-odd years ago this case was, according to a lot of legal experts, not all, but this is cut and dry, that they ruled in the case of Chinese immigrants that that is the way the 14th amendment --

Russell Pearce: That was after the slaughterhouse decision, that disagreed with that, and a later decision after it had been use properly for 40 years, then they decided that it -- your GPS location mattered. And they choose to use that decision. It's a policy, it is not a constitutional provision. Jacob Howards on the floor of the senate who wrote the 14th Amendment said this is not a plan for foreigners or aliens. At all. Clear language in my book.

Ted Simons: You promised not to push immigration bills when were you pushing for the senate president. Is that senator wrong that said that?

Russell Pearce: What I told him was simple. I don't make deals with folks, you can't ignore the fact. If you want jobs for Americans, maybe you ought to worry about the 500,000 illegal aliens that are taking jobs from Americans. Maybe you ought to worry about Bob Krentz who was murdered on the border. 12 Phoenix police officers killed and maimed by illegal aliens. Phoenix is number two in the world for kidnapping. Maybe people ought to start paying attention to that. He was never promised it wouldn't be done. What I told him was, as the president, I'm going to try to get other people in the front of this parade to carry this legislation. I need to work clearly on a lot of issues. These are important, but jobs, the economy, regulatory reform, educational reform, tort reform, things that I think are going to make Arizona a place where families come, where jobs come, where people come, and part of that is safe neighborhoods.

Ted Simons: If that parade, though, winds up taking up, sucking all the energy out of the room and all these things you listed off wind up so far back in the parade no one can see them, is it worth bringing this up now?

Russell Pearce: Of course it is. Again, 500,000 illegal aliens in Arizona. You want a job for an American? Deport an illegal alien. Enough is enough. People have to wake up to the reality. They commit crime according to the data out of the Maricopa County jail system, 2.3 times violent crimes over any other demographic. How can you continue to ignore that?

Ted Simons: A couple quick questions. We've had some folks suggesting that the legislature's make-up right now is very focused on jobs, on business types, on a whole cluster of people not necessarily poor people, not necessarily people of color. Who represents those people at the legislature?

Russell Pearce: I think we all do. And that's -- people would love to create this conflict that's not there. And shame on them. Shame on them. Just like 1076, 56% of Democrats support it, yet not one Democrat voted for it. Maybe it's about time we start legislating and operating from the ground up and not from the top down. RNC is not going to dictate our policy. We represent all those people and we do it in a fair, responsible, and equitable manner. Everyone of those people I think get honest consideration from all of us to treat everybody equal fair and the same.

Ted Simons: Last question, does the governor owe her success to you?

Russell Pearce: You know, that's a tough way to put it. Do I think -- do I think 1070 had a major role in her election? Absolutely. All the polls indicate it. But she signed the bill, she's been vigilant in its defense and I'm grateful for the governor. I introduced this bill in '05, '06, '07, '08,’09, 2010 before I finally had a governor that would sign it. And she's been village fluorescent its defense. I'm grateful for that, and I can tell you, I, the House, and the governor get along very well, and it's going to be good year and we'll play nice together.

Ted Simons: Thanks for joining us.

Russell Pearce: Thanks for having me.