Jun 302015


By Tammy Gray

A ruling by the U.S. Supreme Court on Monday represents a temporary victory for the State of Arizona and advocates for affordable energy, but the potential long-term effect on the planned closures at Cholla Power Plant in Joseph City remains to be seen.

The court found that the Environmental Protection Agency (EPA) should have taken the cost of implementing rules regarding certain pollutants that are produced by coal-fired power plants, such as mercury and arsenic, into consideration when crafting regulations. Nationwide, the cost of the EPA’s rule regarding such toxins is estimated to cost energy producers a total of $9.6 billion. The rules, however, were crafted more than three years ago and most plants have already either complied or made plans to shut down.

Arizona Public Service (APS) Company’s Cholla Power Plant has already installed more than $320 million in new emission controls over the last several years, including equipment designed to substantially reduce mercury, nitrous oxide and other pollutants. The company has also made plans to close Unit 2 in April 2016 as a result of EPA regulations. APS officials previously estimated that it would cost upwards of $425 million to meet additional forthcoming rules.

Arizona was one of 21 states which had joined in the lawsuit over toxic emissions, hoping to challenge the EPA’s authority to implement broad measures designed specifically to shut down coal-fired power plants. The high court’s decision means that the EPA will have to re-write the rule regarding mercury and air toxics (MATS).

In issuing the decision, Justice Antonin Scalia said, “One would not say that it is even rational, never mind appropriate, to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits. No regulation is appropriate if it does significantly more harm than good.”

The court’s finding does not directly impact other EPA rules that affect the Cholla plant, including regional haze rules that were upheld by the Supreme Court last year, or the pending carbon emission rules that will eventually either close the plant or force a conversion to natural gas. It may, however, open the door to additional challenges to the EPA’s authority and potentially delay enforcement of those regulations.

The current plan of action by APS calls for the permanent shutdown of Unit 2 next April, since it was the only unit that did not receive environmental upgrades during the $325 million retrofit project, as well as closure or conversion of Units 1, 3 and 4 by April 2025. The plan is based on the proposed EPA clean power plan that is expected to be formally adopted by the agency this year.

Public comments are being sought on APS’s plan, which buys the company additional time to continue operating under the forthcoming federal regulations. If the proposal is not accepted by the EPA, the plant may shut down sooner than 2025.

A public hearing regarding the plan for Cholla Power Plant will be held in Holbrook at 6 p.m. on Monday, July 13, at the public works complex on Highway 77. An additional hearing will be held in Phoenix at 1:30 p.m. on Tuesday, July 14, in room 3175A-B at ADEQ headquarters, located at 1110 W. Washington St. Written comments may be submitted by mailing them to Balaji Vaidyanathan, Air Quality Permits Section Manager, ADEQ, 1110 W. Washington St., 3415A-1, Phoenix, Ariz., 85007; or by emailing them to bv1@azdeq.gov.

The proposed plan and supporting documents can be viewed online at http://azdeq.gov/cgi-bin/vertical.pl by clicking on the link on the “events and notices calendar.”