FLAGSTAFF, Ariz. (AP) — The owners of a coal-fired power plant on the Navajo Nation reached a settlement Wednesday with federal agencies over complaints they flouted rules for permits and violated the Clean Air Act, leading to further pollution control upgrades that will cost millions of dollars.
The settlement filed in U.S. District Court in New Mexico came after years of negotiation among federal officials, the plant owners and environmentalists who sued over permits. It includes no admission of wrongdoing but resulted in a $1.5 million civil penalty.
The plant's operator, Arizona Public Service Co., said upgrades made to the Four Corners Power Plant in northwestern New Mexico were part of routine maintenance and didn't require federal permits. The U.S. Environmental Protection Agency disagreed.
The EPA said a 2007 inspection revealed that the plant didn't have permits to replace equipment that pulverizes coal or to upgrade parts of the turbines, boilers and generators that could increase emissions.
"Basically it's a level-playing-field issue," Jared Blumenfeld, administrator of the EPA's Pacific Southwest Region in San Francisco, told The Associated Press. "If you're building or renovating large power plants, you need to get a permit."
The U.S. Department of Justice has filed complaints in more than two dozen cases around the country alleging that coal-fired power plants violated the Clean Air Act. The largest settlement came in 2007 with American Electric Power for power plants around the Midwest and carried a $15 million civil penalty.
Bruce Gelber, assistant attorney general with the Justice Department said, in some cases, companies failed to obtain permits for years or decades even though they retrofitted the power plants.
"They essentially had uncontrolled emissions of pretty significant priority pollution," he said.
Federal agencies estimated that additional pollution controls under the settlement would cost $160 million — on top of the civil penalty. But an APS vice president, Ann Becker, said the actual cost for work above what already was required by the EPA is about $30 million.
Arizona Public Service Co. is the primary owner of the Four Corners plant and runs it on behalf of itself and Tucson Electric Power Co., the Salt River Project, Public Service Co. of New Mexico and El Paso Electric Co. The settlement also includes Southern California Edison Co., which sold its shares in the power plant to APS in late 2013.
The 1,540-megawatt plant supplies power to households in Arizona, New Mexico and Texas. Its capacity was diminished when the owners decided to shut down three of the five generating units in late 2013 under the EPA's regional haze rule. That rule requires pollution controls for nitrogen oxide emissions at the remaining two units by 2018.
The settlement will result in further reductions and includes a cut in sulfur dioxide emissions in the same time frame.
Becker said the owners decided to settle in the best interest of the plant, employees and the Navajo Nation but disputed allegations against them. The owners argued that time had run out to file a complaint regarding the pulverizers that were replaced in the 1980s and said there was no evidence that upgrading other components increased emissions.
"We have a long and strong history of environmental stewardship and compliance," she said.
Blumenfeld, of the EPA, said one of the most significant parts of the settlement is $2 million to track respiratory health of Navajos living near the power plant. Navajos have long complained about pollution from the power plant, saying it makes them sick.
"That's one of the unanswered questions," he said. "It will be one of the nation's first studies to look at the impact to tribal members from the power plant, indoor air quality and other respiratory impacts."
Another $4.7 million goes to weatherizing homes and replacing heating sources with more energy-efficient systems in 750 Navajo residences around the power plant. The details on that still are being worked out.
The public has 30 days to comment on the settlement. It won't be final until it's approved by a judge.