US: August 14, 2008


LOS ANGELES - Arizona utility Salt River Project will upgrade pollution controls and pay a US$950,000 fine for alleged violations of US clean air rules at a coal-fired plant in a settlement with the Environmental Protection Agency and Justice Department.


The public utility's installation of pollution-control equipment will cost about US$400 million, and Salt River Project (SRP) will spend another US$4 million on clean energy projects for Arizona schools, SRP and the EPA said Tuesday.

The plant improvements will cut sulfur dioxide and nitrogen oxide emissions by more than 21,000 tons a year at the Coronado Generating Station in northeast Arizona near the New Mexico border, the EPA said.

SRP said Coronado's 2007 emissions were about 31,000 tons.

SRP serves about 935,000 customers in the Phoenix area.

Coronado has two coal-burning units that opened in 1980 and together make electricity to power 200,000 Arizona homes.

Current controls eliminate 65 percent of Coronado's sulfur dioxide emissions created from burning coal, and by 2012, 95 percent of it will be eliminated, said Jim Pratt, SRP manager of generation engineering. The plant burns Powder River Basin coal shipped from Wyoming by rail.

Environmentalists were split on the settlement.

Roger Clark of the Grand Canyon Trust hailed it.

"I'd have to say, 'Good job.' We didn't have to sue anyone to get the EPA to enforce the law," Clark said. "We're pleasantly surprised."

But the Sierra Club's Southwest field director, Rob Smith, said, "This lets another coal plant keep heating the planet while the EPA stalls on new greenhouse gas rules."

SRP decided to settle several years ago, Pratt said.

"If you look back at all the other settlements that EPA has achieved, and if you look where regulation is heading, it makes the most sense for us to settle," Pratt said.

In applying the Clean Air Act, the EPA uses a process called "new source review" in which existing plants must install the best available retrofit technology when modifications go beyond routine maintenance.

Pratt said SRP still considers improvements at Coronado to be maintenance and not modifications, and SRP does not admit any wrong in paying the US$950,000 civil penalty.

SRP will spend US$4 million on projects that include a retrofit for some Arizona school diesel buses and installing solar panels at two schools each in Apache County where the plant is located and in its Phoenix-area service territory. (Editing by Braden Reddall)


Story by Bernie Woodall


REUTERS NEWS SERVICE