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In another divestment of coal power by California utilities, Southern California Edison agreed to sell its interest in the giant Four Corners Power Plant on Navajo Nation land in New Mexico to Arizona Public Service for $294 million. Edison, which signed the sale agreement November 8, told the Securities and Exchange Commission in a filing that the proceeds would “benefit” ratepayers and not add to shareholder earnings. The deal also would help the Southern California utility comply with a state law, while at the same time saving Arizonans some money. Edison receives 720 MW of output from Units 4 and 5 at the plant. That capacity is to be transferred to APS if utility regulators in both states and the nation’s capital approve the deal. In turn, APS plans to close the plant’s aged Units 1, 2, and 3, which it owns and are considered uneconomical to retrofit with modern-day pollution controls. Their shutdown would cut overall capacity at the coal-fired plant from 2,100 MW to 1,540 MW, according to the Arizona utility. The deal is driven by a California state law known as SB 1368. Under it, California utilities are to gradually divest their positions in out-of-state coal power plants, which generally operate under partnership agreements with other utilities. The law prevents state utilities from renewing their partnership interests, as well as spending any money on the plants that could lengthen their life beyond the expiration of their participation contracts. The law is aimed at cutting greenhouse gas emissions. Edison had been planning to end its participation in the Four Corners plant in 2016, which marks the end of its partnership agreement, noted Gil Alexander, company spokesman. The deal also is prompted by pending air pollution requirements. Four Corners, according to the U.S. Environmental Protection Agency, is the single biggest emitter in the nation of nitrogen oxides, which cause unhealthful ozone and fine particulate. The plant obscures visibility by casting a haze over 16 wilderness areas and national parks, including Mesa Verde and the Grand Canyon, depending upon which way the wind blows. Accordingly, EPA last month proposed rules to cut those emissions by 80 percent (Current, Oct. 15, 2010). By abandoning the plant’s old units--instead of retrofitting them to meet EPA’s requirements--and in their place picking up Edison’s interest in the newer Units 4 and 5, APS would save its ratepayers $500 million, according to Jeff Guldner, the utility’s vice president of regulation. However, APS still would have to add pollution controls on Units 4 and 5 under EPA’s proposal. The other remaining utility partners in the Four Corners plant would have to help foot the bill too for the controls on Units 4 and 5, which each generate 750 MW and opened in 1969 and 1970 respectively. Today, their output is shared between Edison, APS, PNM, Salt River Project, Tucson Electric Power, and El Paso Electric. APS is the exclusive owner of units 1, 2, and 3 at the mammoth coal plant. For California, the sale agreement continues a succession of coal divestitures. Earlier in the decade, Edison shut down the 1,560 MW Mohave Generating Station, a coal-fired plant. It too faced massive air pollution control requirements, as well as depletion of an aquifer from which water was pumped to move pulverized coal through a 273-mile long slurry pipeline from an Arizona mine to the southern Nevada plant (Current, Jan. 7, 2006). Later in 2006, the Los Angeles Department of Water & Power pulled out of a plan to expand the coal-fired Intermountain Power Plant in Utah. LADWP and other utility partners had been planning to build a new unit there (Current, Nov. 10, 2006).

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