APS seeking coal compromise

September 15, 2014 | By Barbara Vergetis Lundin

If the U.S. Environmental Protection Agency (EPA) approves a compromise proposal, Arizona Public Service (APS) will close Unit 2 of its coal-fired Cholla Power Plant in Joseph City, Arizona, by April 2016 and stop burning coal at Units 1 and 3 by the mid-2020s.

260 MW Unit 2 at the coal-fired Cholla Power Plant. Credit: APS

In 2010, APS was notified that Unit 2 needed to upgrade its scrubbers and add a super-sized sophisticated air filter called a "baghouse" to meet the new Mercury and Air Toxic Standards. In 2012, the EPA published a federal implementation plan, which overrides certain parts of Arizona's plan to deal with regional haze. The federal plan requires Cholla Unit's 2 and 3 to add expensive Selective Catalytic Reduction (SCR) technology used to reduce nitrogen oxide emissions.

APS made the proposal with the understanding that it would not be required to install expensive emission control equipment on the units to comply with current rules under the agency's Regional Haze program, noting that environmental benefits of this proposal are greater in the long term than the benefits of adding the emissions control equipment.

"When the EPA issued its final rules to manage regional haze, we told the agency that the cost of adding SCRs along with the other technologies required to meet the mercury rules placed the unit at risk of being uneconomic to operate," said David Hansen, APS vice president of fossil generation. "This proposal provides the best outcome, allowing Cholla to continue to operate, while meeting environmental requirements. This solution balances several needs -- supporting the local economy the best way possible; the need to provide reliable, low-cost generation resources for customers; and complying with federal rules and regulations."

By closing Unit 2, which has been in service since 1978, emissions are anticipated to decline by 51 percent, particulates by 34 percent, nitrogen oxides by 32 percent, and carbon dioxide and sulfur dioxide by 23 percent, with additional environmental benefits after units 1 and 3 stop burning coal.

If EPA approves the compromise, APS will save more than $350 million in potential costs that otherwise would be passed along to customers for emission control upgrades.

APS has been closing older, less reliable units -- including closing three units at the Four Corners Power Plant in Farmington, New Mexico, and two units at the Ocotillo Power Plant in Tempe, Arizona -- and replacing them with cleaner and more efficient sources of energy.

For more:
- see the EPA's final rule to manage regional haze

http://www.fierceenergy.com/story/aps-seeking-coal-compromise/2014-09-15