Company Website:
http://www.aps.com
PHOENIX -- (Business Wire)
The coal-fired Cholla Power Plant in Joseph City, Ariz., will close its
260-megawatt Unit 2 by April 2016 and stop burning coal at the other
APS-owned units (1 and 3) by the mid-2020s if the U.S. Environmental
Protection Agency (EPA) approves a compromise proposal offered by APS,
the plant’s owner. APS also will ask the Arizona Corporation Commission
to approve the plan.
Under a proposal to the Environmental Protection Agency, Arizona Public Service Co. will close its 260-megawatt Unit 2 at the coal-fired Cholla Power Plant in Joseph City, Ariz., by April 2016 and stop burning coal at the other APS-owned units (1 and 3) by the mid-2020s. The proposal is subject to EPA and state regulatory approvals. (Photo: Business Wire)
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. The
environmental benefits of this proposal are greater in the long term
than the benefits that would have resulted from adding the emissions
control equipment.
“This proposal provides the best outcome, allowing Cholla to continue to
operate, while meeting environmental requirements,” said David
Hansen, APS Vice President of Fossil Generation. “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.”
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.
“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 Hansen. “We are clearly aware of
the potential impact closing Unit 2 may have on the neighboring
communities and arrived at this decision only after carefully weighing
the options.”
By closing Unit 2, mercury 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. There would be
additional environmental benefits after units 1 and 3 stop burning coal.
APS intends to continue working closely with the Arizona Department of
Environmental Quality on environmental issues.
According to Hansen, there were three alternative approaches – investing
hundreds of millions of dollars in equipment, converting the entire
plant to natural gas by 2016, or closing the plant.
If EPA approves the APS compromise, it will save more than $350 million
in potential costs that otherwise would be passed along to customers for
emission control upgrades.
Potential job losses will likely be mitigated through normal attrition
and retirements. Today the plant has 249 employees with an annual
payroll of $29 million. It pays approximately $15 million in state,
local and federal taxes annually.
The unit has been in service since 1978.
APS has been closing older, less reliable units and replacing them with
newer, cleaner and more efficient sources of energy. This includes
closing three units at the Four Corners Power Plant in Farmington, N.M.,
and two units at the Ocotillo Power Plant in Tempe, Ariz.
From an accounting perspective, APS intends to reclassify the remaining
book value as a regulatory asset.
APS,
Arizona’s largest and longest-serving electricity utility, serves nearly
1.2 million customers in 11 of the state’s 15 counties. With
headquarters in Phoenix, APS is the principal subsidiary of Pinnacle
West Capital Corp. (NYSE: PNW).
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20140911006138/en/
Contacts:
APS
Media:
Steven Gotfried, 602-250-3040
Analyst:
Paul
Mountain, 602-250-4952
aps.com/newsroom
Source: APS
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