Mohave Coal Plant Shuts Down

The 1,580 MW Mohave Generating Station shut down December 31, under the terms of a long-standing consent decree calling for installation of new pollution control equipment. Majority owner Southern California Edison is pushing to reopen the plant. It hopes to modify the consent decree to allow interim operation of the two-unit coal plant while pollution controls are installed. However, "clean coal" competitors see the closure as an opportunity for new construction. The facility supplied two-thirds of its power to Southern California. Other partners in the plant are the Los Angeles Department of Water & Power, Nevada Power Co., and the Salt River Project. Edison is seeking approval from the California Public Utilities Commission for recovery of its pollution control costs, including technology to limit carbon dioxide emissions or other mitigation that may be required by the state's energy greenhouse gas standards. The 1999 consent decree with the Grand Canyon Trust, the Sierra Club, and the National Parks Conservation Association called for the plant operators to either install pollution reduction equipment or shut the plant down by the end of 2005 (Circuit, Dec. 2, 2005). Controls are needed to slash sulfur dioxide, nitrogen oxide, and particulate emissions that environmental groups claim resulted in 400,000 violations of air-quality standards during the 1990s. To keep the plant running long-term, the operators must also develop a new source of water to slurry coal from Black Mesa on the Navajo reservation. Edison said in a December 29 statement that it hopes to be able to tap the nearby Coconino Aquifer. The Navajo and Hopi are concerned that continued use of the Navajo Aquifer to supply water to move crushed coal through the 273-mile-long pipeline across Arizona to the Nevada plant will deplete their primary drinking water supply. Edison, which owns 56 percent of the plant located outside Laughlin, Nevada, has lined up more expensive replacement power. Closure of the plant is one of the underlying factors behind a series of Edison rate hikes. Mohave has supplied power at 2 cents/kWh to Edison and LADWP since 1971. "Mohave is related to these three rate increases," said Gil Alexander, Edison spokesperson (see story at page 8). Sithe Global sees closure of the Mohave plant as a potential boost for its joint proposal with the Denai Power Authority to build the Desert Rock Energy Project, a new "clean coal" plant on the Navajo reservation. Sithe Global is a privately held, independent power company headquartered in Houston, which has developed power plants around the world. "It just underscores the importance of what we're going to do next," said Frank Maisano, Sithe spokesperson. The project would provide $50 million in annual revenue for the Navajo Nation and 400 construction jobs. The federal Environmental Protection Agency has told the partners that Desert Rock would be one of the cleanest coal plants ever built, said Maisano. Edison is largely replacing the cheap coal power with more expensive but cleaner-burning gas-fired power. The company also hopes to recover the cost of keeping the Mohave operation in standby mode while it works to reopen the plant, according to documents filed at the CPUC December 29. Edison wants to recover expenditures aimed "to minimize the period of Mohave inoperation, which, if successful, will minimize the associated negative impacts on SCE's customers, employees, the tribes, and other stakeholders," wrote Akbar Jazayeri, Edison director of revenue and tariffs. These costs are likely to include staffing for the Peabody mine on Black Mesa and the slurry pipeline that supply the plant with coal. Edison is discussing with Peabody payments to keep the mine and pipeline ready under a temporary "standstill" agreement, said Jazayeri. Installing pollution controls and developing the new water supply are expected to take up to four years, according to Edison, and to cost as much as $1 billion. Meanwhile, the Navajo and Hopi tribes will lose some $20 million a year in royalties, taxes, and fees. To recover the money, some tribal groups have joined with environmentalists in proposing that revenue from sale of the air pollution credits be transferred to the tribes to mitigate the economic impacts. Mohave's owners could make money by selling the credits while the plant is closed. "We encourage them to develop new partnerships with Navajo and Hopi people to create renewable energy options for the future and to replace revenues that the tribes will lose," said Bill Hedden, Grand Canyon Trust executive director. The money would be used to fund tribal government operations, assist an estimated 185 displaced mine workers, and develop renewable energy on the two reservations.

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Mohave Coal Plant Shuts Down

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