Ted Simons: Good evening, and welcome to "Arizona Horizon," I'm Ted Simons. US Airways and American Airlines today announced a deal with the Justice Department that clears the way for the two companies to merge. Under the deal, the airlines agree to divest takeoff and landing slots and gates from several airports. The settlement also calls for hubs to be maintained for three years at a number of other airports, including Phoenix Sky Harbor. The settlement today means the air carriers can wrap up their merger by next month.
Ted Simons: The Environmental Protection Agency has proposed new rules to reduce emissions from the Navajo Generating Station near Page. Owners say the rules will cost upwards of $1.1 billion and will force the plant to shut down. Much of the power is used to pump water uphill for the Central Arizona Project. CAP is included in a working group that's proposing an alternative option to the EPA's emission-cutting plan. We will hear from a supporter of the EPA rules in a moment, but first we welcome CAP general manager David Modeer. Good to see you.
David Modeer: Good to be here.
Ted Simons: The EPA rules, your alternative plan. We have two different plans here, compare and contrast.
David Modeer: Well, they are very similar in that the EPA, in their original rule published in February, set a total cap on the amount of nitrous oxide, emissions that are the haze-causing compound, over the expected life of the plant over the year 2044. There is a tonnage limit under their proposed rule. They gave two proposals and said if you can come up with a plan that is better than the limit we have set, we will consider that as potentially a final rule-making.
Ted Simons: And talk about the plan that you and others, SRP, and some other environmental groups as well- this technical working group, what did you come up with?
David Modeer: Including tribes, environmental groups, CAP and the owners we came up with a proposal that would produce the total amount of emissions over the remaining life of the plant. That would be better than what the EPA had proposed in their rule. Part of that is we agreed to shut down one of the units of the three of the Navajo Generating Station, between now and up to 2028, and at that period of time we'll evaluate the output of the plant and have the potential to install what the EPA proposed in their original rule, which is selective catalytic reduction units. Which would have been at this time about $1.1 billion if we had to put it back.
Ted Simons: Sounds like your plan just delays some things more than the EPA plan.
David Modeer: It delays the need to put on the expensive emission controls, but at the same time it delays that, the period of time before that we will produce a lot less emissions than there would have been if all three units were operating.
Ted Simons: The idea again, by 2044 the entire plant could shut down. The tribes could still run the plant, there's still an option there, correct?
David Modeer: That is correct. The owners agreed they would divest their interests in Navajo Generating Station on or before 2044.
Ted Simons: This alternative plan, does it satisfy this court order? The EPA is facing a court order to get done what you say you're going to get done. Does your plan satisfy, do you think, that order?
David Modeer: Absolutely it satisfies it. It's better than what the EPA had proposed in terms of emissions controls, so it completely satisfies the responsibilities that EPA has under the Clean Air Act.
Ted Simons: The court order again says, I think it's, must use best available technology in terms of addressing this issue. Talk to us about how your new alternative plan addresses that.
David Modeer: Best available technology is related to what technology is out there that you could use or be required to use in order to control emissions from the plant. What the EPA had determined was a process called selective catalytic reduction units would be required to be installed in order to meet their standards. That is the state of art today in terms of control and emissions. But the rule the EPA proposed doesn't necessarily require you to install that, it requires you to meet an emissions limit. Under their aspect of the rules they posed, only SCRs could meet that limit. If you could come up with a better proposal to stay within the cap, they would consider that. The owners and all of the interests, environmental and tribes, got together and said we're going to work together and see if we can come up with a proposal that is better than what the EPA says is required under the Clean Air Act for them, and we were. We were able to accomplish that and came to a consensus of how we could do that. It's a two-stage process up until the year or 2028. We would stay below the cap the EPA set by shutting down one of the three units. That will shut down January of 2020.
Ted Simons: And that would cut how much in terms of emissions? Like maybe 33% or something along those lines?
David Modeer: Around that number, in combination with the emissions reductions that have already been achieved by the installation of the low nox burners a few years ago.
Ted Simons: If it would shut down this %33, if all three had been reduced to that %33 level, all three could stay open? Or does that thing shut down?
David Modeer: I think the owners would make the choice, shut the plant down if it was not an economical operation, in order to get a return on their investment of it. That's been the problem with the EPA's original proposal. There is a huge amount of uncertainties that have to be resolved. The NEPA process related to the new lease with the Navajo Nation, new coal contracts, a lot of uncertainties. They couldn't be certain the plant would be operating long enough to recover that. The two proposals that the EPA put out in February were simply not workable. If we were unable to come up with this proposal, I feel fairly certain the plant would be closed. The owners would not be willing to take that risk.
Ted Simons: Maybe the last question here. Why has it taken so long to come up with your alternative proposal, for anyone to come up with a serious proposal to help the EPA, when the Clean Air Act is there, it's not being met apparently by a court order? What's going on out there, this has taken 20 some odd years.
David Modeer: Well, this original haze rule was implemented in the 1990s, it has to be revisited every periodic amount of time. The EPA isn't that far behind in this particular rule-making, you know, related to the period of time they need to revisit the haze issues up there and make reasonable progress to the end goal of the Clean Air Act on regional haze issues. There have been lawsuits that have taken time to get to the point where we are at now, where the EPA issued a preliminary ruling about four years ago. We've been at this process with the EPA on this particular regulatory issue for over four years now.
Ted Simons: And for comments, if people want to comment on the plan, where do they go, what do they do?
David Modeer: There's an EPA website or they can go to CAP's website.
Ted Simons: And those responses will be taken I think until January 6th.
David Modeer: That is correct, January 6th.
Ted Simons: Good to have you here.
David Modeer: Thank you, nice to be here.
Ted Simons: Here now to speak in favor of the EPA plan to reduce emissions from the Navajo Generating Station is Marshall Johnson of Tohona-Szjonee-Ana, a grass roots Navajo environmental organization. I apologize for mispronouncing, but I'm very glad to have you, for making the trip down here. We appreciate it. We just heard the CAP alternative to the EPA proposal for the generating station. Why is the EPA idea the better one?
Marshall Johnson: Even though health is not emphasized in the ruling, it does minimize the health risk, the pollution, what the generating station emits. You know, we have health issues, respiratory, and that's what is being- I can say that in that area it does help. And then if you look at our homeland, you know, where the mining operation is taking place, they are not only mining the coal for the Navajo Generating Station, they are also mining the water. This is a pristine Ice Age Navajo sandstone aquifer. It's been a mine for over 40 years now. First it was supplying coal to the Mohave Generating Station and the coal slurry operation. But that has closed since 2005. But it's being continued to use for a mining operation.
Ted Simons: Is there any way you think that Navajo Generating Station should stay open? Or do you want to see that closed down?
Marshall Johnson: Well, I mean, if you look at what our government emphasizes, it's economy for the Navajo Nation. But if you add up the numbers of Navajo Generating Station workers and mine workers, that's less than a thousand people working well-paid jobs. Then if you compare that to percent of the Navajo nation, 300,000, that's only 1/3 or 1% put as an economic input to the Nation.
Ted Simons: So you're saying it would not be as big a hit to the Nation as some might suggest?
Marshall Johnson: Exactly. There are places we can replace with other generation, solar and wind.
Ted Simons: If the alternative plan does the same thing, and CAP folks say it actually is more stringent than the EPA idea, it just pushes things out a little bit further, is that a healthy compromise? Or no?
Marshall Johnson: What the bottom line is, the health of the Navajo sandstone aquifer. They are agreeing to continue- for this operation to continue another 25 years after 2019. If you look at this is taken on Black Mesa. These are subsidence and earth measures taken right now. The reason the Central Arizona Project was built was due to overdraft of the aquifers here in the Valley, and Pikachu Peak in the 1930's. This is what's happening there right now. That's the health that has to be really emphasized in the whole operation. It is the headwaters of the Central Arizona Project.
Ted Simons: The Central Arizona Project, though, says they get much- most of their electricity from that station. You lose that generating station you lose the ability to pump water uphill and the CAP is in a world of hurt, as are a lot of folks who depend on that water. How do you respond to that?
Marshall Johnson: We are in a world of hurt right here. Our springs are not producing on the mesas anymore. We have to go to community wells to haul our barrels, water tanks, to bring water from the community wells to our animals anymore. At the rate that we pay per one acre-foot, it's $3,258 per one acre-foot, the highest in the whole southwest.
Ted Simons: With that in mind, is there a compromise between what you're looking at- let's talk about the EPA. Sounds like even the EPA is probably not the best as you can see it but it's the best for now. Is there a compromise between that and anything else?
Marshall Johnson: EPA is doing something not to the top- how can I say- EPA is doing something on our behalf. There is a little protection, but not to a point where it is going to protect the Navajo Nation and the Hopi Nation for a point where it's only going to delay, what the ruling is taking place, it's only buying time to comply. It's another- they are adding another 10 years while other generating stations are being - they are acting to put their SCRs on their power plants in five years, and the Navajo Generating Station is being delayed.
Ted Simons: From where you stand, your ideas are they the most prevalent? Is this dividing the Nation? What are you hearing up there?
Marshall Johnson: It's only- the emphasis they put on allowing NGS to continue is just the jobs. But if you give the numbers, they are only looking at the wages and the payouts of what- that's the number that they are giving. But if you look at the numbers of workers that are working there, and at the mining, it's one third of 1% of the whole nation. I was talking to David Modeer earlier. I said the only place I can find work is 12, 13 hours away and there are just a thousand workers continuing to work.
Ted Simons: I'm glad we had a chance to get you on, and I'm glad you made the drive down. It's good hearing from you. We will continue to look at this issue from both sides. Thank you so much for joining us, we appreciate it.
Marshall Johnson: Thank you, sir.