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SRP proposes seasonal curtailment of unit at Ariz. plant to meet haze rules

TheSalt River Projectcould curtail a unit at its coal-fired Coronado power plant for several months of the year tocomply with regional haze requirements.

Workingwith the state of Arizona, the public power utility has developed analternative to installing a selective catalytic reduction system at unit 1 ofthe plant by December 2017, something favored by the U.S. EPA. Doing so wouldcost $110 million, and the SRP thinks its alternative will allow the unit tomeet regional haze requirements, save customers money and provide operationalflexibility, spokesman Scott Harelson said.

Underthe plan, SRP wouldcurtail unit 1 for 60 to 196 days each year. The length of the curtailmentwould depend on SO2 emissions performance of units 1 and 2 and NOx emissionsperformance of unit 1. SRP would then have until December 2026 to decidewhether to install a selective catalytic reduction, or SCR, system orpermanently shutter the unit. Both installation of the SCR system and endingoperations at unit 1 would happen by Dec. 31, 2029.

Thetwo-unit Coronado plant is in Apache County, Ariz., and has an operatingcapacity of 762 MW, according to S&P Global Market Intelligence data. SRPhas already installed an SCR system on unit 2.

Accordingto Harelson, SRP is caught in a conflicting regulatory environment. While theEPA called for installation of SCR on unit 1, the agency also issued itsproposed Clean Power Plan, which could potentially require elimination ofcoal-fired generation in Arizona. With the future of the Clean Power Planuncertain, SRP is reluctant to invest in SCR systems by December 2017.

Thisalternative approach has several benefits, Harelson said. One isproviding SRP with operational flexibility. Like other utilities, SRP isworking to reduce its carbon intensity and transition from coal resources, hesaid. "If in 2026, SRP were to decide that closing the unit is the bestpath forward, we have that flexibility because we haven't invested the $110million into the facility relatively recently," Harelson said.

Anotherbenefit is that aside from reducing NOx and SO2 emissions, the seasonalcurtailment would reduce carbon dioxide and mercury emissions as well. The planalso benefits customers from an economic perspective, he said.

Seasonalcurtailment of unit 1 should not present a reliability issue for customers,Harelson said, as the curtailments would happen at a time of the year whenextreme temperatures are unlikely.

Theplan is now subject to a commentperiod before the Arizona Department of Environmental Quality that endsAug. 22.