18,000 Navajo families without electricity but NTUA positioning for the future

By Kathy Helms
Diné Bureau

WINDOW ROCK — There are more than 18,000 families without electricity on the Navajo Nation. Navajo Tribal Utility Authority is looking at $20 million in electrification, water and wastewater projects, but there are a few hurdles that have to be overcome before those ever will be realized.

NTUA General Manager Walter W. Haase, who has been in his new position for about seven weeks, recently presented a status report to the Budget and Finance Committee.

“Just looking at one category class — electricity, where we actually provide the most service out of all of our services — we have over 18,000 families without electric service within the Nation today. That’s 75 percent of the (total) folks in the United States who don’t have power or access to electricity.”

“One of NTUA’s major focuses going forward is to provide services to folks who don’t have basic service. Being new to the Nation and not understanding that, that was quite a revelation for me to find out that there are so many folks who live in the Nation here who just don’t have service,” he said.

Navajo families, unplugged

Cassandra Begay, for one, can tell you what it’s like not to have electricity. When three of her children are not away at school, there are six people living in her single-wide mobile home on Defiance Plateau. Begay’s home is just 1 and one-half miles from Arizona Highway 264 where electric transmission lines hang so near, yet so far away.

Beside’s Begay, there are five other families living in close proximity, and none of them have electricity.

“We use kerosene lamps at night and then some of us that can afford it, we have generators for electricity. We run ours for about two or three hours a night. We have a 5,500 watt generator. We kept it in the shack all winter. We kind of kept it covered, so it didn’t freeze up,” she said.

For heat, the family has a wood-burning stove. “We burned wood all winter. For cooking, we have a small propane bottle back here (behind the trailer). It’s connected straight to the propane stove. We use maybe about two bottles a month of propane. In the summer we cook outside.”

Begay said some of her family tried to get electricity to the area in prior years “but they were told that so many families have to be involved.” Now that there are six families in the vicinity, they have just started to try again.

For refrigeration, Begay puts the food outside in cold weather. “Other than that, I go out daily and get some meat. Just like right now — we went out and got some meat, and we have to cook the whole thing today,” she said, pointing to two packages of beef on the kitchen table.

For outside lighting the family has solar lights that she purchased at True Value in Window Rock.

“My grandma’s always saying, ‘How come you guys keep your lights on all night?’” she said, laughing.

St. Michaels /Oak Springs Delegate Curran Hannon told Begay that before electricity was run to his home site on Summit, he used a propane refrigerator.

“A 100-pound bottle lasted about three months,” he said.

Begay pointed toward the wooden shack where the generator is housed. “In the wintertime we were OK with refrigeration. We just stuck them in here and they kept cool. The meat was frozen most of the time. We have portable ice chests that we use in the summertime.”

Asked whether she would like to have electricity, Begay said, “Oh, that would be wonderful!”

Without electricity the family can’t pump water, assuming they had water to pump. As it is, they haul water from the water station in St. Michaels or from the car wash in Window Rock.

“For the winter we’ve been going to the car wash. We didn’t want to get off the road,” she said.

To get electricity, Begay said the families have to go to a chapter planning meeting, then get on the agenda for a chapter meeting and have the community vote on it. “We would go to a chapter meeting on a Sunday and they would pass a resolution asking NTUA to do a feasibility study — that nobody’s saying nothing about lines being run over here,” she said.

Referring to the families living near Begay, Hannon said, “Those people back in there, they’ve been wanting electricity for so long— it’s just that they don’t have the money to get the lines run to them. They’re trying to go through the chapter house to gets resolutions passed.”

If some federal grant money became available to NTUA, it could go a long way to helping those families, he said.

Electrification project

Hasse said NTUA assets totaled $415,817,397 in 2007 while long-term debt stood at $36,562,647.

“That is a very, very low ratio. If you look at most co-ops, they’re at a 50-, 60-, to 70 percent borrowing-to-equity debt ratio. So there is room for us to borrow money in the future,” he said.

Another hurdle for NTUA is overcoming its backlog of work orders, which at one point stood at 3,000. Those now have been reduced to 900.

“That’s the second covenant that you have to have in place, is have your work orders closed out on a regular basis,” Haase said.

The third covenant is that the utility’s assets have to be valued under Federal Energy Regulatory Commission accounting methods, which NTUA’s accounting system currently doesn’t allow for, though NTUA is in the process of updating its system.

“When we are able to pass all three of those hurdles, that will allow us to be able to borrow money from the federal government again under the RUS program,” Haase said.

In 2002, a federal program called the Navajo Electrification Demonstration Project was supposed to provide $85 million in federal funding, or $15 million a year for five years. But as with other federal programs for Navajo, the appropriations didn’t happen.

“Over the first five year-period of time, we got about $8 million,” Haase said. The program later was reauthorized, again for $85 million. “To date, unfortunately, out of that whole program where we needed $85 million, we only received about $10.8 million, and that’s kind of where we stand today.”

With that $10.8 million, NTUA was able to provide hookups for 1,172 families. “That’s a far cry from 18,000; and if we kept going at the pace they’re talking about going in, 100 years from now we still wouldn’t have everyone hooked up.

“If we would have received the grant money, if we were to get $15 million a year, we’d be able to hook up about 1,300 families,” he said.

Under the old program, Navajo did not have to put up any matching funds, however, the new federal program requires a match.“Unfortunately, the organization didn’t realize that when they made the new budget for 2008 earlier in the year, so they didn’t bring forth any matching funds.

“We were under the understanding that the Department of Energy is going to allot $1.9 million ... With a 50 percent match, that means that NTUA now needs to come up with $1.9 million to access those funds, and that wasn’t something that we had anticipated through the process,” Haase said.

There’s a shortage of funding to serve all of the customers NTUA needs to, and because it hasn’t been able to borrow money in the last six years, it has a lot of aging infrastructure that needs to be rebuilt. The recent hike in electric rates will help, but it doesn’t leave NTUA any money to expand the system to the 18,000 families who don’t have service today.

“We’ve kind of evaluated projects from all the agencies and some of the things we looked at was how can we make the most impact — how can we get the most resources in place so that when money becomes available we can hook up as many people as possible.

“We looked at some of the main lines we were running— how many people we can get today off of those lines, and how can we position those lines so that we can build laterals off of them as economically as possible to get to new folks as more money becomes available.

“We’re trying to build ourselves into a situation that it’s not going to take 100 years to take care of these 18,000 families that are out there today. We’re also actively going out and lobbying the federal government to give us more than $1.9 million next year.

“We’re asking for the full $15 million. We don’t think we’ll get the full $15 million, but we believe we will get a lot more than the $1.9 million that we have received for this year,” Haase said.

Dennis Wagner and Ryan Randazzo
The Arizona Republic
Mar. 28, 2008 12:00 AM

Hundreds of windmills reaching nearly 400 feet into the sky could begin sprouting on the Navajo Reservation north of Flagstaff under a new agreement to harness wind energy for electrical use.

The Navajo Nation announced Thursday that it will partner with a Boston company to capitalize on the blustery conditions prevailing on the high mesas of northern Arizona. The Diné Wind Project, which would be the first commercial wind farm in the state, calls for Citizens Energy Corp. to invest millions of dollars to build the energy-collecting towers.

The enterprise was sealed this month by Navajo Nation President Joe Shirley Jr., other key tribal officials and Citizens Energy Chairman Joseph P. Kennedy II, a former congressman and son of the late U.S.

Sen. Robert Kennedy and Ethel Kennedy. The agreement comes after nearly two years of pre-development work and marks another step in the Navajo Nation's move to exploit renewable-power sources for so-called clean energy. advertisement

In a news release Thursday, Shirley said the wind-gathering effort will "bring prosperity for the Navajo people and build our energy independence while providing jobs and other benefits for the Navajo Nation."

The operation is planned in the Gray Mountain area west of U.S. 89, about 50 miles north of Flagstaff. The tribe and its Diné Power Authority become partners in a joint enterprise known as Citizens Enterprise Corp., a subsidiary of Citizens Energy. Deswood Tome, a Navajo Nation spokesman, said the project is expected to generate 500 megawatts of electricity, enough to serve an estimated 100,000 households. As many as 300 turbine towers would be erected in several locations between Flagstaff and Tuba City, with first-phase completion in about three years.

The development would be among the largest wind-power installations in the country, said Bob Gough, secretary of the Intertribal Council on Utility Policy in Rosebud, S.D. The largest is near Abilene, Texas, which produces 736 megawatts. A cluster of separate wind farms near Palm Springs, Calif., contains thousands of turbines.

Gough said the Navajo Nation has some of the stiffest winds for turbines in Arizona, adding, "They've instrumented the Gray Mountain area, and on maps it probably shows the best resource in Arizona. That area also is the site of transmission lines coming out of the Four Corners region."

Environmental issues

Citizens Energy has been involved in renewable-electricity development for three decades, according to the company's Web site, and began working on wind projects in 2003, including other joint ventures with tribes in the United States and Canada. The Diné Wind Project would be the nation's largest Native American wind project.Roger Freeman, managing director of the wind project for Citizens Energy, said via e-mail that the wind towers would be 260 feet tall, with blades reaching an additional 135 feet above ground. Freeman emphasized that the company is committed to developing energy "in an environmentally responsible manner, including consideration for cultural impacts and respect for tribal sacred sites."

Tome said he is not aware of opposition to the development plan.

Citizens' Web site says company and Navajo leaders have worked to involve local tribal members in planning efforts.

Andy Bessler, a Sierra Club Southwest representative, said his group has not taken a formal position on the wind-farm project but welcomes Navajo efforts to exploit a renewable-power source that won't add to global warming.

"I think there will be 'viewshed' issues," Bessler said, noting that windmill orchards are perceived as eyesores by some. "But the local community members are very supportive."

Don Steuter, another Sierra Club representative, said studies must be done to determine whether the project threatens wildlife, including endangered California condors that patrol the Grand Canyon area.

Steuter said wind farms have posed a threat to birds of prey. Still, environmentalists encourage clean-energy efforts, Steuter said. "We have been encouraging the tribe to move in that direction."

For 30 years, a mine at Black Mesa on the reservation was operated by Peabody Western Coal Co., piping coal slurry to the Mohave Generating Plant in Nevada for energy production. That mine closed in 2006 after Southern California Edison shut down the power plant rather than pay $1 billion for environmental work and other upgrades.

The Navajo Nation has not abandoned coal as an economic resource, however. The tribe is struggling to develop a new coal-fired power plant near Farmington, N.M.,which developers hope will sell energy to Phoenix or Las Vegas.

Potential buyers

Precise terms of the Citizens Enterprises compact were not divulged.

But a tribal news release says Navajos will have "a significant ownership stake" in developments, reaping $60 million to $100 million over the project's lifetime.

No cost estimate was released for development. Christine Real de Azua, a spokeswoman for the American Wind Energy Association, said expenses range from $1.5 million to $1.8 million per megawatt of wind power produced.

That would put the project's value at $750 million to $900 million, although rising steel prices could increase those figures, Real de Azua said.

Two utilities serving the Valley, Salt River Project and Arizona Public Service Co., would seem likely buyers because they already purchase wind power generated in New Mexico. But the Diné project was news to both on Thursday.

"They have not come to talk to us about it," APS spokesman Jim McDonald said, adding that the utility is seeking alternative electricity to meet a state requirement to supply more renewable energy.

"It would be ideal if it came in at a price that was competitive," McDonald added. SRP has a similar requirement. "If the Navajo Nation were to build a project of this size, we would consider looking into it," SRP spokesman Scott Harelson said.

March 28th, 2008
Navajo Nation struggles to build coal plant

Like leaders of several other developing nations, Joe Shirley, the president of the Navajos, wants to build coal-fired power generation as fast as possible.

Shirley has been fighting to build a 1,500 megawatt plant in Northwest New Mexico called Desert Rock with a company called Sithe Global, LLC. He says it and associated mining would provide up to 400 long-term jobs for his people and pay more than $50 million annually to the nation.

The jobs sound good to some of the nearly 200,000 citizens of the Navajo Nation spread across the desert of Arizona, New Mexico and Utah. An opening for a janitorial job at a Navajo college, for example, recently drew about 200 applicants. Many Navajo young men must travel to construction jobs in other states hundreds of miles away.

“It’s all about putting food on the table, putting shoes on little feet,” Shirley told reporters about the plant recently at his office in Window Rock, the capital of the Navajo Nation.

Unfortunately for Shirley, his nation, unlike other coal-rich nations like China or India, must get permitting for the plant from the United States.

For years the U.S. Environmental Protection Administration has delayed granting the plant an air permit, saying it has not had enough time to review public comments on an environmental filing on the site.

As the permitting process drags on, the cost of the plant has risen — to about $3 to $4 billion, depending on the strategy it uses to bury emissions of greenhouse gas carbon dioxide, if at all.

And local opposition to Desert Rock has risen. Many Navajos who the plant would push out of their homes south of Farmington, New Mexico have fought it. They said the plant would send most of its power to rapidly-growing Arizona and Nevada while many Navajos would continue to go without power.

Opponents said the plant would add to air pollution from two other coal plants in the area, and while strip mining of the coal and unregulated dumping of coal ash would degrade the soil.

One Navajo opponent, Sarah White helped lead a two-week blockade of the earthen roads leading to the proposed site when Sithe dug water wells for Desert Rock. She vows to keep blocking development of the site.

Meanwhile, throughout the United States, opposition has grown to plants fired by coal, which emits more CO2 than any other fuel. Plans for coal plants from Texas to Florida have been canceled, while coastal states like California and New York are beginning to regulate greenhouse emissions.

Shirley feels entitled to tap his coal, especially because the countries like the United States got rich on the stuff.

But also because China is building several coal fired power plants — every month. He said if the United States is serious about slowing output of greenhouse emissions, it should stop “picking on the poor Navajo Nation quagmired in impoverishment in its backyard” and talk more with China. “Is it because (China) is a nuclear nation?” he asks about the lack of progress.

This week the Navajo Nation announced that it plans to build a 500 MW new wind farm, which adds a new twist for their quest for energy development.

What do you think? Should the U.S. speed up approval of Desert Rock?

By FELICIA FONSECA/Associated Press

ALBUQUERQUE, N.M. - The Navajo Nation is setting itself up to be a provider of wind power at a time when neighboring states are pushing for increased renewable energy portfolios.

The tribe announced Thursday it has partnered with Boston-based Citizens Energy Corp. to develop wind energy on the vast reservation.

''When they flip the switch off for conventional power and flip the switch on for renewable, you want to be able to be there both places,'' said Steve Begay, general manager of the tribe's Dine Power Authority, or DPA. ''... It's being in the market all the time with base load fossil fuel power and renewable.''

The DPA, Navajo President Joe Shirley Jr. and Citizens Energy chairman and president Joseph Kennedy III signed an agreement earlier this month to develop more than 500 megawatts of energy on the Navajo Nation.

Several sites on the reservation are being considered for the Dine Wind Project, including the Gray Mountain ridge southwest of Tuba City, Ariz., and Cameron, immediately west of Gray Mountain.

The first phase of up to 200 megawatts is expected to be complete by 2012, said Roger Freeman, managing director of wind projects for Citizens Energy.

In the past 18 months, the group has conducted wind assessments, environmental and transmission reviews, and met with several chapters over the potential for wind energy development, Freeman said.

But before any wind turbines can go up, the partners would need to complete an analysis on wind potential and secure financing for the project.

''We're looking at another year and a half to two years before we actually get under way with construction,'' said Deswood Tome, a spokesman for the Navajo Nation's Washington, D.C., office.

The tribe plans to send wind power to cities off the reservation through the yet-to-be-built Navajo Transmission Project, a 470-mile power line to that would stretch from Shiprock to Laughlin, Nev., Begay said.

Early estimates show the wind project could bring in between $60 million and $100 million in revenue for the Navajo Nation over the lifetime of the project, which Begay said could be 25 years.

''By working together with the Navajo Nation's Dine Power Authority and Citizens to harness the power of the wind we can bring economic prosperity for the Navajo people and build our energy independence while providing jobs and other benefits for the Navajo Nation,'' Shirley said.

Under the agreement, the Navajo Nation will have the opportunity to gain a majority ownership in the project, and Citizens Energy has agreed to reinvest a portion of the profits on the Navajo Nation.

Freeman said Citizens Energy is putting up all the necessary development capital so that the project is low risk for the DPA and the Navajo Nation.

11:05 a.m. March 27, 2008

NEW YORK – The Navajo Nation, which has struggled for years to build a coal-fired power plant, said on Thursday it has formed a joint venture with a Boston company to develop 500 megawatts of wind energy on its lands in the U.S. West.

Navajo Nation President Joseph Shirley signed an agreement with Joseph Kennedy III, the chairman and president of Boston-based Citizens Energy Corp to develop the project.

The agreement forms a joint venture between Citizens, a global developer of renewable energy and power transmission, and Dine Power Authority, the Navajo's wholesale energy enterprise.

Wind power “can bring economic prosperity for the Navajo people and build our energy independence while providing jobs and other benefits for the Navajo Nation,” Shirley said in a statement.

Under terms of the agreement, the Navajos would have a ownership stake in the project development company and be able to invest additional equity in the project, eventually acquiring a majority ownership stake, according to statement from the Washington office of the Navajos.

Citizens Energy has also agreed to reinvest a portion of the profits from the project on the Navajo Nation, it said.

Early estimates anticipate the Dine Wind Project could produce between $60 to $100 million in total revenue for the Navajo Nation over the lifetime of the projects, not including the jobs and environmental benefits of wind energy, the Navajo statement said.

About 200,000 people live on the Navajo Nation, a sovereign nation about the size of West Virginia, which spreads over Arizona, New Mexico and Utah. The Nation has been plagued with poverty and unemployment and many residents do not have power or running water.

DESERT ROCK

Shirley has supported building a coal-fired power plant called Desert Rock, which, he says, would bring about $50 million to the tribe annually.

The going has been hard for the coal plant. The Navajo Nation and Sithe Global Power, LLC are trying to build the $3 to $4 billion 1,500 MW plant, but they have been stalled for years because the U.S. Environmental Protection Administration has not issued it an air permit.

Desert Rock has also been criticized by some Navajos for its potential to pollute the air in a place where two large coal plants already operate. And Sithe has not yet decided whether it would bury its emissions of the main greenhouse gas carbon dioxide, which has also led to criticism.

Some Navajos also complain that most of the power from the coal plant would be exported to high demand areas in Arizona and Nevada and that many of them could still be left without power.

The Navajos Nation sued the EPA last week over its lack of action on the air permit. If the 500 MW wind power project is successful, it could be a significant addition to wind power generation in the United States. Installed U.S. wind power by the end of 2007 was nearly 17,000 MW, according to an industry group.

(Reporting by Timothy Gardner, editing by Marguerita Choy)

Source: http://www.signonsandiego.com/news/state/20080327-1105-wind-navajo-.html

Source: http://www.gallupindependent.com/2008/March/032408desertrock.html

By Kathy Helms
Diné Bureau

ST. MICHAELS — The air permit for the Desert Rock Energy Project is being held up by U.S. Environmental Protection Agency over concerns with the Endangered Species Act and global warming, and legislation introduced March 11 in Washington is not going to help the matter.

Introduced by Rep. Edward Markey and Rep. Henry Waxman, the “Moratorium on Uncontrolled Power Plants Act of 2008,” addresses the largest new source of global warming pollution — new coal-fired power plants that are being built without any controls on their global warming emissions, according to the chairmen.

The bill places a moratorium on either EPA or states issuing permits to new coal-fired power plants without state-of-the-art control technology to capture and permanently sequester the plant’s carbon dioxide emissions. The moratorium extends until a comprehensive federal regulatory program for global warming pollution is in place.

The bill also bars a new coal-fired power plant without state-of-the-art control technology from receiving any free or reduced-cost emissions allowances under a future federal program to address global warming.

Many communities are still paying for failed nuclear power plant investments in the 1980’s, the chairmen said.

“This bill puts investors and power companies on notice that if they invest in new sources of global warming pollution now, taxpayers won’t pay for the costs of cleaning up those sources later,” the chairmen said.

“That’s what’s really holding up the permit, as we understand,” Diné Power Authority General Manager Steven Begay told the Economic Development Committee this week.

According to Waxman, comprehensive economy-wide regulation to address global warming is coming soon. More than 100 new plants have been proposed, and even if just a portion of these are built, they will emit over a hundred million tons of carbon dioxide a year.

While Desert Rock will have state-of-the-art technology, carbon capture technology for the plant does not exist yet on a commercial scale, Begay said. In which case, the plan now is to build the plant and leave a space so the plant can be retrofitted with a carbon-capture system when it becomes available.

“Carbon capture technology is there — it’s theory — but there is no real practice. They’re being experimented on real small scales and you can’t just go from there to large scale. So there’s that design that’s not there that we’re willing to look at.”

Once a design becomes available, the next step would be financing. “ For the size of the plant that Desert Rock is promoting to develop, it will require about $450 million per unit,” he said. There are two 750 megawatt units proposed for the $3 billion, 1,500 megawattt coal-fired power plant to be built near Burnham.

Begay said installation of the carbon capture system also would result in less power available to sell.

“It absorbs some of that power from the plant to run the system, so it reduces your net output to the off-takers. There is some economic impact because of that, because that means that the Nation and the partners won’t be selling as much power because some of that power will be used in the carbon capture system.

“But given that its all experimental— there’s no proven technology that can be applied at the size Desert Rock will be — we’re receptive to it but we’ve got to keep moving. There is a slot in the emission system where, if it’s there, we’ll put it in.”

Developers of Desert Rock are receptive and available to talk about bringing about the carbon capture technology, he said, but an assessment would be needed to determine what to do with the carbon once it is captured or sequestered. “Do we put it in some aquifer or some dome, or do we market it to Utah or Texas to do tertiary recovery? We’ll need to have pipelines to send that, so there’s that evaluation that needs to be done.”

DPA and Sithe Global Power subsidiary Desert Rock Energy Co. LLC filed suit this week to prod EPA on issuance of the Desert Rock air permit. New Mexico Environment Department Secretary Ron Curry said that at the request of the Navajo Nation, NMED staff has been meeting with tribal environmental officials to discuss the project and the potential for carbon emission reductions. “To sue now undercuts these ongoing discussions,” he said.

“We respect the sovereignty of the Navajo Nation and the rights of tribal governments to determine their economic futures and to pursue positive change within their communities. However, the responsibility of taking strong action to combat global climate change is one we must all share."

Please see attached files for more information:

- Press Release: Rep Waxman Introduces the "Moratorium on Uncontrolled Power Plants Act"
- Moratorium on Coal Plants Bill

Hearing on EPA Approval of New Power Plants: Failure to Address Global Warming Pollutants:
With Testimonies from:
- Honorable Stephen L. Johnson, Administrator, Environmental Protection Agency
- Ron Curry, Secretary, New Mexico Environment Department
- David Doniger, Policy Director, Climate Center, Natural Resources Defense Council
- Dr. Daniel M. Kammen, Director, Renewable and Appropriate Energy Laboratory
- John Cline, Partner, Troutman Sanders LLP

Available online: http://oversight.house.gov/story.asp?ID=1599

Staff Writer
Article Launched: 03/24/2008 12:00:00 AM MDT

Tired of playing the waiting game, Desert Rock Energy Company and the Navajo Nation's Diné Power Authority filed a lawsuit against the U.S. Environmental Protection Agency last week, citing the EPA's lack of action in granting a crucial air permit to operate the proposed coal-fired power plant.
The Diné Power Authority and Houston-based Sithe Global Power applied for the air permit in early 2004 and argue that the EPA had one year to make a determination and issue a decision under federal law. Today it's more than four years later, and there still is no decision.

In turn, the $3 billion, 1,500-megawatt Desert Rock plant, which would be built near Burnham on the Navajo Nation, has yet to break ground.

During a lengthy public comment period, the EPA says it received more than 1,000 comments on the air permit. The agency must respond to each comment, a process the EPA claims pushes deadlines past a realistic timeframe.

"Typically, it doesn't take this long," EPA spokeswoman Margot Perez-Sullivan said. "It really depends on the complexity of the project, and in this case, it is a complex process."

We certainly can see the aggravation of Desert Rock supporters, who have waited for years to get an answer on this vital air permit. It's further frustrating when the EPA is not willing to give any indication about when it might act officially on the permit application. This year? Next year? The federal agency isn't saying.

If the EPA doesn't want to rule on the coal-fired plant because of environmental concerns, it should say so. The EPA has used the "massive comments" defense for months. Surely it knows, within reason, how long it will take to respond to those comments.

Yes, any federal permitting of a coal-fired power plant is no doubt an immense project that takes plenty of time. But why have deadlines if they are not followed?

This newspaper has supported the development of Desert Rock as long as it meets federal environmental standards. The project would add hundreds of permanent jobs and pump millions into the depressed Navajo economy. High-paying jobs are hard to find on the Navajo Nation. Desert Rock, if it earns the needed federal permits, would provide more good employment opportunities for Navajo workers.

The flip side is the EPA's proposed new smog standards that were announced this month. San Juan County, with its growing population, two coal-fired power plants, and oil and gas industry, already is considered on the verge of violating those standards. Most populated areas in the U.S. are facing the same situation, and some believe any new local development would be halted if the EPA regulations are implemented in the coming years.

It appears that major compromises must be made between the need for economic growth and a safer, cleaner environment. If that isn't possible, look for the standstill on Desert Rock to continue.

The Associated Press
Article Launched: 03/22/2008 02:04:31 PM MDT

FARMINGTON, N.M.—The U.S. Environmental Protection Agency is touting its new smog standard as the most stringent ever, but when the new limit takes affect three years from now San Juan County will likely not be able to meet the standard.

New Mexico Environment Department Air Quality Division Bureau Chief Mary Uhl said state air experts have been modeling the new standard and projections don't look good for the county.

"We will classify the county as non-attainment, which will limit development there," she said.

The new limit will lower the allowable concentration of ozone in the air to no more than 75 parts per billion, compared with the old standard of 80. The EPA announced the new standard earlier this month, saying the air in hundreds of U.S. counties is too dirty to breathe.

The state Environment Department has three years to write and submit a plan detailing how New Mexico's counties will come into compliance with the tighter standard, Uhl said.

"I don't know the specifics, but there will be a federal plan that will mandate emissions reductions in many different areas," Uhl said.

Bringing San Juan County into compliance will involve prohibiting new "sources of emissions." That means large industries would be kept from operating here until existing companies take steps to offset emissions to compensate for the new sources.

"We have some time to come up with an attainment plan, but the time will go quickly," Uhl said.

Public Service Company of New Mexico, which operates the coal-burning San Juan Generating Station in Waterflow, and Arizona Public Service, operator of the coal-fired Four Corners Power Plant in Upper Fruitland, will likely be affected by the lower ozone limit.

However, PNM spokeswoman Susan Sponar said the utility won't know how the new standards will affect the San Juan power plant that until monitoring data from 2006 through 2008 is gathered, assessed by the state and submitted to the EPA.

"We are in the middle of environmental upgrades that, when complete, will reduce emissions of nitrogen oxides (NOx) by 35 percent below current permit levels," she said.

The compound is a precursor of ozone.

Sponar said the plant is installing low-NOx burners and overfire air on all four units to control the fuel and air mix. The changes will reduce peak flame temperatures in the boilers, which she said will result in less nitrogen oxide formation.

Other changes, when complete, will reduce emissions of sulfur dioxide by 65 percent below current permit levels, lower particulate emissions by 70 percent below currently permitted levels and drop mercury emissions by about 75 percent.

Arizona Public Service spokesman Damon Gross said the company will track the new standard as it moves forward. He added that the Upper Fruitland plant's emissions have lessened during recent years.

Gross also pointed to the complexity of the ozone issue.

"Ozone comes from an interaction between the sun and emissions from a number of areas: automobiles, industrial facilities, chemical solvents, power plants and even natural resources," he said.

"It isn't easy, but we remain committed to doing our part to protect the area's air quality," he said.

BHP Billiton, which mines coal for the two power plants, indicated it doesn't expect any direct effects from the lower ozone standards when implemented.

Should the state's modeling prove correct, non-attainment with the new standards could open up the possibility that automobile emission standards might be implemented in San Juan County as well as limits on non-automobile combustion engines, boiler facilities and painting and coating operations.

"We have an idea of who contributes what pollution to the air," Uhl said.

Whether the tighter standard would affect EPA permitting for the proposed Desert Rock Energy Project being developed by the Navajo Nation and Houston-based Sithe Global comes down to timing, she said.

"Until there is a declaration of non-attainment, new permits won't be affected," she said. "We have one more year of data to collect."

———

Information from: The Daily Times, http://www.daily-times.com

‘A step in the wrong direction’
By Kathy Helms
Diné Bureau

WINDOW ROCK — A lawsuit filed Tuesday by Desert Rock Energy Co. LLC and Diné Power Authority against U.S. Environmental Protection Agency “is unfortunate and premature,” according to New Mexico Environment Department Secretary Ron Curry.

Desert Rock Energy Co., a wholly owned subsidiary of Sithe Global Power LLC of Houston, and DPA challenged EPA and Administrator Stephen L. Johnson for failure to make a timely decision on an air permit application for the proposed 1,500 megawatt, coal-fired Desert Rock Energy Project, to be located near Burnham.

“New Mexico’s position on this plant is clear; the Desert Rock plant as currently proposed is a step in the wrong direction,” Curry said. “We need to be moving forward, toward new carbon capture-ready technologies for power generation, not back to the old dirty coal plants of the past.”

Air quality
Curry said that as planned, the new facility will adversely impact air quality, exacerbate existing environment problems, and negatively impact scarce surface and ground water resources. Per capita, New Mexico already emits twice the national average of greenhouse gas emissions, according to NMED.

“Also, the technology as proposed by Sithe refuses to consider real technological advances. It appears Sithe’s investment in plant planning is outdated without taking into account the needs of climate change policy,” he said.
The estimated 12 million tons of carbon dioxide emitted each year from the Desert Rock plant would increase New Mexico greenhouse gas emissions by about 15 percent, making Gov. Bill Richardson’s aggressive greenhouse gas reduction goals difficult — if not impossible — to meet, according to Curry.

DPA General Manager Steven Begay, during a report Wednesday to the Navajo Nation Economic Development Committee, said, “Everybody is waiting on the air permit. That will be the green light for the project to move forward.”

Begay said Navajo Nation President Joe Shirley Jr. met with EPA’s Johnson several months ago and again last Wednesday. “The permit is ready to be issued. It’s awaiting some issues that have been raised by Administrator Johnson.”

One is the Endangered Species Act; another is global warming, according to Begay. He said a Supreme Court decision, Massachusetts v. EPA, raised concerns about global warming from “mobile sources,” which EPA cited as a cause of concern in its comments on the Desert Rock Draft Environmental Impact Statement.

Another stumbling block is legislation introduced March 11 by Rep. Edward J. Markey, chairman of the Select Committee on Energy Independence and Global Warming, and Rep. Henry A. Waxman, chairman of the Oversight and Government Reform Committee.

The legislation, known as the “Moratorium on Uncontrolled Power Plants Act of 2008,” addresses the largest new source of global warming pollution — new coal-fired power plants that are being built without any controls on their global warming emissions, according to the chairmen.

Moratorium

The bill places a moratorium on either EPA or states issuing permits to new coal-fired power plants without state-of-the-art control technology to capture and permanently sequester the plant’s carbon dioxide emissions. The moratorium extends until a comprehensive federal regulatory program for global warming pollution is in place.

The bill also bars a new coal-fired power plant without state-of-the-art control technology from receiving any free or reduced-cost emissions allowances under a future federal program to address global warming.

Many communities are still paying for failed nuclear power plant investments in the 1980’s, the chairmen said. This bill puts investors and power companies on notice that if they invest in new sources of global warming pollution now, taxpayers won’t pay for the costs of cleaning up those sources later.

“That’s what’s really holding up the permit, as we understand,” Begay said.

According to Waxman, comprehensive economy-wide regulation to address global warming is coming soon. More than 100 new plants have been proposed, and even if just a portion of these are built, they will emit over a hundred million tons of carbon dioxide a year, the chairmen said.

Emissions

Desert Rock will have state-of-the-art technology, Begay said, as well as a space for any retrofittable carbon-capture system. “Carbon capture technology is there — it’s theory — but there is no real practice. They’re being experimented on real small scales and you can’t just go from there to large scale, so there’s that design that’s not there that we’re willing to look at.

“Following the design would be the bulk of the money for constructing a unit. For the size of the plant that Desert Rock is promoting to develop, it will require about $450 million per unit,” he said. There are two 750 megawatt units proposed.

Begay said there also would be a reduction in power off-take and a corresponding economic impact because it would require some of the power the plant would produce to run the carbon-capture system.

“But given that its all experimental – there’s no proven technology that can be applied at the size Desert Rock will be – we’re receptive to it but we’ve got to keep moving. There is a slot in the emission system where, if it’s there, we’ll put it in,” he said.

Secretary Curry said that at the request of the Navajo Nation, New Mexico Environment Department staff has been meeting with tribal environmental officials to discuss the project and the potential for carbon emission reductions. “To sue now undercuts these ongoing discussions,” he said.

“We respect the sovereignty of the Navajo Nation and the rights of tribal governments to determine their economic futures and to pursue positive change within their communities. However, the responsibility of taking strong action to combat global climate change is one we must all share.”

Desert Rock backers take permit issue to court

By Marley Shebala
Navajo Times

WINDOW ROCK, March 20, 2008

The Diné Power Authority and developers of the Desert Rock Energy Project lost no time in making good on their earlier threat to sue the U.S. Environmental Protection Agency.

Late Tuesday they filed a lawsuit aimed at forcing the EPA to issue an air quality permit allowing them to proceed with construction of the 1,500-megawatt Desert Rock Power Plant.

The filing came one day after the deadline expired on their intent-to-sue notice, filed 60 days ago.

The suit was filed in U.S. District Court in Houston by Sithe Global Power, the Texas-based owner of Desert Rock Energy Co., and the DPA, which is helping to facilitate the project.

On Jan. 17, Bracewell & Giuliani, a Washington, D.C., law firm representing Sithe, notified the EPA that the company planned to sue on grounds that the federal agency had violated the U.S. Clean Air Act by not issuing its decision on the air quality permit application within a year.

The proposed $3 billion coal-fired power plant would be located about 20 miles south of Shiprock and would be the third major power plant in the area, giving rise to a large number of public comments challenging the permit application.

On March 12, Desert Rock vice president Nathan K. Plagens said the lack of an air quality permit has not only blocked construction of the plant, but has also stymied the sale of its power. The plant would generate enough electricity to serve more than a million homes.

Plagens said Sithe has issued several requests for proposals to purchase the electricity. The company is looking to utilities that serve the Southwest's big cities, such as Arizona Public Service, Nevada Power and the Salt River Project, as the likeliest buyers.

No local hookups

Plagens confirmed that none of power generated by Desert Rock would go to Navajo families living near the plant.

Direct transmission is not physically possible because of the enormous difference in voltage between the plant output and residential electric systems.

A separate transmission system, including substations to reduce the voltage, would have to be built to serve local homes, a prohibitively expensive undertaking, he explained.

Plagens noted that the Navajo Tribal Utility Authority is responsible for providing electric service to reservation homes, and said Sithe is open to meeting with NTUA about the possibility of contracting for some of the power generated by Desert Rock.

On Tuesday morning, Margot Perez-Sullivan, EPA spokesperson, said her agency had not been served with a lawsuit and that if one was filed, the EPA would not comment on issues in litigation.

Perez-Sullivan added that the EPA is still responding "in a meaningful manner" to more than a thousand public comments that were received during public hearings on the environmental impact of the proposed plant in 2007.

She explained that all the comments would available to the public when the EPA releases its final decision on the air permit for Desert Rock.

Perez-Sullivan declined to give an estimated date for the agency's decision.

She added that federal regulations give the EPA a year to issue an air permit and also recognizes that the "complexity" of a project may demand additional time.

"Desert Rock is very complex and has taken more time," Perez-Sullivan noted.

President Joe Shirley Jr. on Wednesday called the delay "atrocious" and said, "We've been working on trying to get at the air permit since the early months of 2004 ... Here it is 2008, we've yet to hear from the EPA.

"It's bureaucracy. It's red tape," Shirley said. "Hopefully, now that we have filed suit the U.S. EPA will be expeditious in promulgating a decision."

Richardson a critic

Groups opposing Desert Rock claim that 95 percent of the public comments criticized the project, and the critics include New Mexico Gov. Bill Richardson.

Richardson stated his position on Desert Rock on July 27: "As planned this new facility will adversely impact air quality, exacerbate existing environment problems, and negatively impact scarce surface and ground water resources."

The comments were in response to the draft environmental impact statement on Desert Rock, which concluded that it would have some - but not intolerable - negative impacts.

Shirley, in his statement on the lawsuit, emphasized the project's potential economic benefits, saying it "denotes jobs for our people, good-paying jobs, (and) $53 million for our Nation's coffers to put into direct services out there in Navajoland. This is a long time coming."

Dailan Long, a Burnham Chapter resident who lives near the planned 580-acre plant site, said Wednesday that the issues surrounding Desert Rock "cannot be ignored or overlooked for a quick economic fix."

"The EPA is in a deliberative process on a very critical issue facing us in Burnham," said Long, a community organizer for Diné Citizens Against Ruining the Environment. "From information contained in the draft EIS for Desert Rock, there remain many unanswered questions that Sithe has failed to speak to."

Referring to existing emission sources such as the Four Corners and San Juan power plants, he said, "Desert Rock is not independent of a large industrial complex in northwest New Mexico and to make a reasonable decision on an air quality permit in the context of existing conditions requires further scrutiny and adequate information."

In their lawsuit, Sithe and the DPA cited the sections of the Clean Air Act that state once a permit application is deemed complete - it includes everything required by the act - the agency has one year to issue its decision.

The complaint notes that on May 21, 2004, the EPA issued a letter saying that the Desert Rock application was complete.

"We are pleased to support President Shirley, DPA and the Navajo Nation in their effort to break this permit free of the log jam preventing this important economic development opportunity for the nation," said Frank Maisano, Sithe spokesman, on Tuesday.

"It has been nearly four years since the Navajo Nation and its partners were told it had an approved permit application," he said. "Statute requires a decision in 12 months."

The EPA has 30 days to file its response to the suit.

Navajo president promotes plant
Thursday, March 20th 2008BY STEPHANIE PAIGE OGBURN | JOURNAL STAFF WRITER

Navajo Nation president Joe Shirley wants the Desert Rock power plant to get built so much he traveled to Washington, D.C., last week to meet with Environmental Protection Agency administrator Stephen Johnson.

“We met face to face,” Shirley said. “I apprised him exactly of what we’re dealing with and why we wanted Desert Rock in spite of the naysayers, in spite of the critics. And hopefully he’s heard my story.”

Those naysayers Shirley referred to include citizens of the Navajo Nation, represented by two groups: Diné Citizens Against Ruining our Environment and Dooda Desert Rock. (Dooda means “no” in Navajo.) The proposed coal-fired power plant would be constructed 30 miles southwest of Farmington, N.M., and has raised concerns about potential impacts to air quality in Cortez.

Shirley claimed the majority of people in the Navajo Nation favor the proposed power plant, since it was a key part of his 2006 campaign platform when he was re-elected.

About 66,000 Navajos voted in the 2006 presidential election, which Shirley won with 53.5 percent of the vote.

Members of Diné CARE say Navajos will be displaced by expanded coal mining operations to fuel the proposed plant. They also oppose the emissions of nitrogen oxides, which react to form ozone, sulfur dioxide, which contributes to smog, particulate matter, and mercury, a toxin that can enter the food chain through deposition in water.

Nationally, concerns about carbon dioxide emissions have stalled the development of new coal-fired power plants. To date, there is no technology on the market that can capture carbon dioxide emissions on a scale large enough for installation in a coal-fired power plant.

Navajos against the power plant mention a concern about carbon dioxide emissions as well as other emissions, and point to alternative energy projects as other ways to move the nation toward economic development.

“The Navajo Nation is geo graphically positioned to be a leader in renewable energy technology,” said Dailan Long, a Navajo who works for Diné CARE and opposes the Desert Rock project.

“We have drawn the line in the sand,” Long said, speaking of his group’s opposition to the power plant. “We wanted to make it known to him (Shirley) that we are not stepping down.”

Long’s chapter house, the Burnham Chapter of the Navajo Nation, passed a resolution opposing the proposed Desert Rock power plant.


The nearby Nenahnezad Chapter House, whose jurisdiction covers the land on which Desert Rock would be built, passed a resolution favoring the plant, but the resolution was passed at a meeting of only 50 members, said Lucinda Bennalley, the chapter president.

“(We) are trying to develop jobs for our people,” said Bennalley, who favors the plant.

In a recent meeting, Shirley intimated that Navajos opposed to the power plant are being paid by non-native environmentalists for their opposition.

“These are not even Navajo people (that) come in and say no, no, no, we’re environmentalists. And they’re giving monies to some of our Navajo people to say no,” Shirley said. “My own people in the majority says let’s have it.”

Shirley said he hoped to get an approval on the air permit from the EPA within the next week.

“Hopefully we’ll get some action, some positive action,” he said.

The Navajo Nation Dine Power Authority and Sithe Global Power, partners in the project, are awaiting the air permit from the EPA for the proposed coal-fired power plant.

The plant cannot go forward without getting the air permit and a completed environmental impact statement from the U.S. Bureau of Indian Affairs, said Nathan Plagens, vice president of the Desert Rock Energy Company LLC, a division of Sithe Global Power.

Reach Stephanie Paige Ogburn at stephanieo@cortez journal.com.

"Sithe, DPA pushing flawed plan"

This letter is in regards to the Navajo Nation and Diné Power Authority lawsuit against the U.S. Environmental Protection Agency filed on March 18.

Mr. Steven Begay told the AP that "Sithe is spending money, and we're spending money. The longer we wait, the more money we spend..."

Associated Press further states: "The EPA has received more than 1,000 comments on the air permit, each of which the agency has to respond to, said Margot Perez-Sullivan, a spokeswoman for the EPA in San Francisco.

"Typically it doesn't take that long, but there is really no normal time frame," she said, "it really depends on the complexity of the project, and in this case, it is a complex process."

Sithe and DPA are the real reason the tribe is losing millions of dollars. They continue to try pushing through a project with serious flaws that threaten the public health and the region's air, water and land. EPA and other federal and state agencies have documented all the flaws - lots of them - on everything from mercury pollution to water use to violating clean air standards.

EPA and the other agencies are simply being responsible in pointing out why, and every day that Sithe and DPA waste in pushing forward this horrible idea is more money out of the Navajo Tribe's pockets.

The huge flaws that EPA and other federal and New Mexico agencies have documented with Desert Rock should have been addressed at the beginning of the project. If Sithe and DPA had done their homework properly, they would have recognized what a bad idea it is and the Navajo Nation would not be wasting millions of dollars on a project that has no chance of ever being built.

George Hardeen, President Joe Shirley Jr.'s spokesman, has said that waiting is "costing not just the Navajo Nation but the investors who are helping us with this project."

This scam project is just a drop in the bucket for the owners (Blackstone Group) and Sithe Global's investors. A newspaper article dated March 12, 2008 titled, "Blackstone's Execs Reap Total $38 Mln Bonuses," says, "Blackstone Group also paid out $648 million in case distribution to its senior executives, according to filing with U.S. Securities and Exchange Commission.

"Blackstone's high-profile co-founder and chief executive, Stephen Schwarzman, 61, wasn't paid a bonus, after reaping $684 million through selling a stake in the IPO. But, along with the company's other senior executives, he receives an annual salary of $350,000."

Why do DPA and Sithe Global think they should be given preferential treatment by forcing EPA to make a ruling - just because they have the money to sue EPA? DPA and Sithe Global crying about allegedly slow EPA action on a permit has nothing to complain about.

Cecilia Barber
Sanostee, N.M.

March 19, 2008 Contact: Marissa Stone, NMED Communications Director

For Immediate Release Telephone: (505) 827-0314 or (505) 231-0475


Environment Secretary Issues Statement on Dine Power Authority and Desert Rock Energy Co. Lawsuit of EPA over Desert Rock Power Plant


(Santa Fe, NM) – New Mexico Environment Secretary Ron Curry issued the following statement today on Dine Power Authority’s and Desert Rock Energy Co., LLC’s lawsuit against the U.S. Environmental Protection Agency regarding the coal-fired Desert Rock power plant air permit, which EPA has jurisdiction over. The lawsuit contends EPA failed to make a timely decision on the permit for the proposed plant.

"New Mexico's position on this plant is clear; the Desert Rock plant as currently proposed is a step in the wrong direction,” Secretary Curry said. “We need to be moving forward, toward new carbon capture ready technologies for power generation, not back to the old dirty coal plants of the past.

As planned, this new facility will adversely impact air quality, exacerbate existing environment problems, and negatively impact scarce surface and ground water resources. Also, the technology as proposed by Sithe refuses to consider real technological advances. It appears Sithe's investment in plant planning is outdated without taking into account the needs of climate change policy.

The estimated 12 million tons of carbon dioxide emitted each year from the Desert Rock Energy Facility would increase New Mexico greenhouse gas emissions by about 15 percent, making Governor's Richardson's aggressive greenhouse gas reduction goals difficult – if not impossible – to meet.

This lawsuit is unfortunate and premature. At the request of the Navajo Nation, New Mexico Environment Department staff has been meeting with tribal environmental officials to discuss this project and the potential for carbon emission reductions. To sue now undercuts these ongoing discussions. We respect the sovereignty of the Navajo Nation and the rights of tribal governments to determine their economic futures and to pursue positive change within their communities. However, the responsibility of taking strong action to combat global climate change is one we must all share."


For more information contact Marissa Stone, NMED Communications Director, at (505) 827-0314 or (505) 231-0475.

###

Navajo Nation Enterprise Sues EPA Over Proposed Power Plant
Source: http://money.cnn.com/news/newsfeeds/articles/apwire/9da87f5b460fa1b49ce132a3af7964ab.htm

March 19, 2008: 12:53 PM EST


NEW YORK (Associated Press) - A Navajo Nation enterprise has sued the U.S. Environmental Protection Agency over the agency's lack of action on an air permit application for a proposed coal-fired power plant.

The Navajo Nation's Dine Power Authority and Houston-based Sithe Global Power have partnered to build the $3 billion, 1,500-megawatt Desert Rock plant south of Farmington, N.M.

The DPA and Sithe applied for an air permit in early 2004. Under federal law, the EPA has a year to make a determination and issue a decision.

The lawsuit, filed Tuesday in U.S. District Court in Houston by DPA and Desert Rock Energy Company, LLC, seeks to force the EPA to make a ruling. Construction on the plant can't start until an air permit is granted.

Steven Begay, the general manager of DPA, said the air permit "gives the green light for a lot of other things."

"Time is money," he said. "Sithe is spending money, and we're spending money. The longer we wait, the more money we spend ... and we don't want to do that. We want to move forward."

Sithe Global is a subsidiary of private equity giant Blackstone Group of New York.

The EPA has received more than 1,000 comments on the air permit, each of which the agency has to respond to, said Margot Perez-Sullivan, a spokeswoman for the EPA in San Francisco.

"Typically it doesn't take this long, but there is really no normal time frame," she said. "It really depends on the complexity of the project, and in this case, it is a complex process."

Perez-Sullivan couldn't say when the EPA might act on the permit application and declined to comment specifically on the lawsuit.

The Navajo Nation notified the EPA in January that it intended to sue over the permit, and when the EPA took no action after 60 days, the tribe decided to move forward with the lawsuit. The EPA and agency administrator Stephen Johnson are named as defendants.

Shirley, who traveled to Washington, D.C., last week and met with Johnson to urge his agency to issue the permit, has made Desert Rock a priority in his administration. The tribe is expecting millions of dollars in lease payments, taxes and coal royalties once the project is complete.

"There is a ripple effect. The longer we wait the more it's costing not just the Navajo Nation but the investors who are helping us with this project," said George Hardeen, a spokesman for Shirley. "Investors can't wait forever.

Sithe has invested about $20 million in the project so far, and the lawsuit claims the tribe is losing $5 million in tax revenue for every month the permit is delayed.

"This is a huge issue for the Navajo Nation. It's economic development, it's jobs, it's the future opportunities for the nation," said Frank Maisano, a spokesman for Sithe. "We're happy to do our part to move it along in support of the nation."

The air permit would set limits for emissions covered under the federal Clean Air Act, such as sulfur dioxide, nitrogen oxides, carbon monoxide, particulates and lead emissions. Both federal officials and Desert Rock developers have said the draft permit contains some of the strictest controls ever set for a coal-fired power plant in the United States.

But some Navajos and environmentalists argue that Desert Rock, which would be built on tribal land near the Navajo community of Burnham, would harm the environment and residents' health. There are two other coal-fired power plants in the Four Corners region.

The New Mexico Environment Department and others have criticized the draft permit for not including enforceable conditions to address adverse visibility and for not analyzing mercury or carbon dioxide emissions.

Others have complained that a better understanding of existing air quality conditions in the Four Corners region is needed before acceptable standards can be set for Desert Rock.

AP Newsbreak: Navajo entity sues over proposed power plant
Source: http://www.lcsun-news.com/ci_8617462

By FELICIA FONSECA Associated Press Writer
Article Launched: 03/18/2008 06:34:16 PM MDT

ALBUQUERQUE, N.M.—A Navajo Nation enterprise sued the U.S. Environmental Protection Agency on Tuesday over the agency's lack of action on an air permit application for a proposed coal-fired power plant.
The Navajo Nation's Dine Power Authority and Houston-based Sithe Global Power have partnered to build the $3 billion, 1,500-megawatt Desert Rock plant.

The DPA and Sithe applied for an air permit in early 2004. Under federal law, the EPA has a year to make a determination and issue a decision.

The lawsuit, filed in U.S. District Court in Houston by DPA and Desert Rock Energy Company, LLC, seeks to force the EPA to make a ruling. Construction on the plant can't start until an air permit is granted.

Steven Begay, the general manager of DPA, said the air permit "gives the green light for a lot of other things."

"Time is money," he said. "Sithe is spending money, and we're spending money. The longer we wait, the more money we spend ... and we don't want to do that. We want to move forward."

The EPA has received more than 1,000 comments on the air permit, each of which the agency has to respond to, said Margot Perez-Sullivan, a spokeswoman for the EPA in San Francisco.

"Typically it doesn't take this long, but there is really no normal time frame," she said. "It really depends on the complexity of the project, and in this case, it is a complex process."

Perez-Sullivan couldn't say when the EPA might act on the permit application and declined to comment specifically on the lawsuit.

The Navajo Nation notified the EPA in January that it intended to sue over the permit, and when the EPA took no action after 60 days, the tribe decided to move forward with the lawsuit. The EPA and agency administrator Stephen Johnson are named as defendants.

Shirley, who traveled to Washington, D.C., last week and met with Johnson to urge his agency to issue the permit, has made Desert Rock a priority in his administration. The tribe is expecting millions of dollars in lease payments, taxes and coal royalties once the project is complete.

"There is a ripple effect. The longer we wait the more it's costing not just the Navajo Nation but the investors who are helping us with this project," said George Hardeen, a spokesman for Shirley. "Investors can't wait forever.

Sithe has invested about $20 million in the project so far, and the lawsuit claims the tribe is losing $5 million in tax revenue for every month the permit is delayed.

"This is a huge issue for the Navajo Nation. It's economic development, it's jobs, it's the future opportunities for the nation," said Frank Maisano, a spokesman for Sithe. "We're happy to do our part to move it along in support of the nation."

The air permit would set limits for emissions covered under the federal Clean Air Act, such as sulfur dioxide, nitrogen oxides, carbon monoxide, particulates and lead emissions. Both federal officials and Desert Rock developers have said the draft permit contains some of the strictest controls ever set for a coal-fired power plant in the United States.

But some Navajos and environmentalists argue that Desert Rock, which would be built on tribal land near the Navajo community of Burnham, would harm the environment and residents' health. There are two other coal-fired power plants in the Four Corners region.

The New Mexico Environment Department and others have criticized the draft permit for not including enforceable conditions to address adverse visibility and for not analyzing mercury or carbon dioxide emissions.

Others have complained that a better understanding of existing air quality conditions in the Four Corners region is needed before acceptable standards can be set for Desert Rock.

By REUTERS
Filed at 6:35 p.m. ET

NEW YORK (Reuters) - Private equity and real estate firm Blackstone Group Inc paid its top executives a total $38 million in bonuses last year, according to a regulatory filing, even as the company's shares halved after its IPO.

Blackstone Group also paid out $648 million in cash distributions to its senior executives, according to a filing with the U.S. Securities and Exchange Commission. Those cash distributions mostly refer to the executives' share of the firm's earnings prior to its initial public offering and won't be repeated in future years.

Blackstone's high-profile co-founder and chief executive, Stephen Schwarzman, 61, wasn't paid a bonus, after reaping $684 million through selling a stake in the IPO. But, along with the company's other senior executives, he receives an annual salary of $350,000.

According to the filing, Schwarzman was excluded from the bonus pool to align his interests with stockholders. However, he received a cash distribution of about $350 million.

Schwarzman now owns 234 million Blackstone shares according to the filing, worth $3.9 billion at current prices. Those shares vest over a period of years -- working as an incentive for him to stay as he can only cash them in after they vest. Of his shares, $729 million vested in 2007.

Blackstone went public in June at a price of $31 a share, coming on the back of a boom for private equity. Shortly after the IPO, a credit crunch hit, putting a halt to the large leveraged buyouts that had boosted private equity firms' income so much.

Blackstone on Monday posted a worse-than-expected 86 percent decline in quarterly earnings. Its shares are currently around half their IPO amount. On Wednesday, the shares rose 28 cents, or 1.7 percent, to close at $16.78.

Eighty-one-year-old co-founder and senior chairman Peter Peterson, who plans to retire before the end of 2008, was paid a bonus of $2.5 million and a cash distribution of $171 million.

Peterson, who pledged $1 billion of his personal fortune to a foundation aimed at resolving U.S. economic woes, reaped $1.92 billion in IPO proceeds. Blackstone said in the filing it expects to pay him a bonus of $6.3 million this year. Peterson owns 4 percent of Blackstone's stock worth about $750 million.

According to Wednesday's filing, Chief Operating Officer Hamilton James was paid a $16.4 million bonus for 2007, and took a cash distribution of $82 million. James reaped $191 million through selling stock in the IPO and now owns 5 percent of Blackstone's shares, worth about $878 million.

J. Tomilson Hill, who runs the company's Funds of Hedge Funds operations, was paid a $15.8 million bonus and a $30 million cash distribution.

Blackstone paid Schwarzman and Peterson $234,225 for use of their jointly owned helicopter for business purposes, and paid Schwarzman $1.4 million for use of his personal airplane for work. The figures were based on current market rates for chartering private aircraft, Blackstone said.

Wall Street bosses routinely rake in large year-end bonuses. For example, Goldman Sachs Group Inc Chief Executive Lloyd Blankfein was awarded a $67.9 million bonus payable in cash, restricted stock and stock options for 2007.

(Editing by Phil Berlowitz, Gary Hill)

Monday March 10, 5:10 PM EDT

NEW YORK (AP) — Private equity firm Blackstone Group LP said Monday it swung to a loss during the fourth quarter due to a write-down on its investment in bond insurer Financial Guaranty Insurance Co. and deterioration in the credit markets.

Shares in Blackstone, which went public last June, hit an all-time low on the news. The company did little to bolster the market's confidence, warning on a conference call that things may yet get worse.

"I don't think we'd load the boat and get aggressive until we knew things had bottomed out," said Tony James, Blackstone's president and chief operating officer. "And you know, there's no evidence right now that it's bottomed out yet. We don't like to guess, we're not just shooting from the hip here."

Blackstone lost $170 million during the fourth quarter, compared with earnings of $1.18 billion during the final quarter in 2006.

Adjusted net income, which was adjusted for special revenues and expenses tied to the company's public offering, fell to $88 million, or 8 cents per share, from $808.1 million, or 72 cents per share, during the year-ago period.

Analysts polled by Thomson Financial, on average, expected Blackstone to turn a profit of 19 cents per unit for the quarter. Analysts do not always include special charges in their estimates.

Quarterly revenue fell 73 percent to $345 million from $1.28 billion during the final quarter in 2006. Revenue plummeted because Blackstone posted $141.8 million in negative revenue during the fourth quarter from performance allocation fees, compared with revenue of $776.3 million during the year-ago period.

Blackstone reduced the value of its portfolio investment in bond insurer FGIC because of recent weakness in the credit markets and worries about bond insurers' abilities to repay claims.

Blackstone wrote down the value of its investment in FGIC to "a few cents on the dollar," James said. Blackstone invested in FGIC in 2003.

FGIC recently had its financial strength rating cut by both Moody's Investors Service and Standard & Poor's, which could force the company out of business. Ratings agencies have worried in recent months that bond insurers might not have enough spare cash to maintain their top-notch "AAA" financial strength ratings.

The write-down of FGIC's value reduced Blackstone's fourth-quarter revenue by about $120 million, James said on the call, cutting earnings by 9 cents per unit.

Blackstone Chief Executive Stephen Schwarzman said on the call deterioration in the credit and fixed income markets during the second half of 2007 reduced the level of new investments, transaction fees and appreciation on Blackstone's portfolio of investments.

Schwarzman said those problems have continued into 2008 and it is unclear when conditions will improve.

For the full year, Blackstone earned $1.62 billion on total revenue of $3.05 billion. It posted earnings of $2.27 billion on $2.62 billion in revenue in 2006.

Blackstone shares fell 42 cents, or 2.9 percent, to close at $15 Monday. The stock, which debuted last June at $31, touched an all-time low of $13.82 at one point in the session.

Source: http://money.excite.com/jsp/nw/nwdt_rt_top.jsp?news_id=ap-d8vaq8to5&

By MATTHEW L. WALD
Published: March 6, 2008

BOULDER CITY, Nev. - At first, as he adjusted pumps and checked temperatures, Aaron Boucher looked like any technician in the control room of an electrical plant. Then he rushed to the window and scanned the sky, to check his fuel supply.

Mr. Boucher was battling clouds, timing the operations of his power plant to get the most out of patchy sunshine. It is a skill that may soon be in greater demand, for the world appears to be on the verge of a boom in a little-known but promising type of solar power.

It is not the kind that features shiny panels bolted to the roofs of houses. This type involves covering acres of desert with mirrors that focus intense sunlight on a fluid, heating it enough to make steam. The steam turns a turbine and generates electricity.

The technology is not new, but it is suddenly in high demand. As prices rise for fossil fuels and worries grow about their contribution to global warming, solar thermal plants are being viewed as a renewable power source with huge potential.

After a decade of no activity, two prototype solar thermal plants were recently opened in the United States, with a capacity that could power several big hotels, neon included, on the Las Vegas Strip, about 20 miles north of here. Another 10 power plants are in advanced planning in California, Arizona and Nevada.

On sunny afternoons, those 10 plants would produce as much electricity as three nuclear reactors, but they can be built in as little as two years, compared with a decade or longer for a nuclear plant. Some of the new plants will feature systems that allow them to store heat and generate electricity for hours after sunset.

Aside from the ones in the United States, eight plants are under construction in Spain, Algeria and Morocco. Another nine projects are in various stages of planning in those countries as well as Israel, Mexico, China, South Africa and Egypt, according to a count kept by Frederick H. Morse, formerly in charge of solar energy at the Energy Department and now a consultant.

Mr. Morse and others say that solar thermal plants could meet most of the galloping growth in power demand in Phoenix, Las Vegas and the rest of the southwestern United States. In fact, experts say enough sunshine hits the deserts of the Southwest that such plants could theoretically power the entire United States. But that is a far-off dream, since it would require big new transmission cables.

The workability of solar thermal power was established in the 1980s, when developers in California built a series of plants in the Mojave Desert, eventually reaching 354 megawatts of capacity. A megawatt is enough electricity to run 1,000 room air-conditioners at once.

The California plants grew more sophisticated and costs shrank as the project progressed. But then the price of a competing fuel, natural gas, collapsed in the 1990s and building new solar plants became uneconomic.

Today, natural gas prices are much higher, and political opposition is rising to construction of new coal-burning power plants. Many states, including California, are imposing mandates for renewable energy. All of that is reviving interest in solar thermal plants.

The power they produce is still relatively expensive. Industry experts say the plant here produces power at a cost per kilowatt- hour of 15 to 20 cents. With a little more experience and some economies of scale, that could fall to about 10 cents, according to a recent report by Emerging Energy Research, a consulting firm in Cambridge, Mass. Newly built coal-fired plants are expected to produce power at about 7 cents per kilowatt-hour or more if carbon is taxed.

The solar plants receive a federal tax subsidy, like other types of renewable energy, which makes the economics work for builders but also feeds skepticism about the technology's long-term potential. "Unless there's a subsidy involved, it doesn't seem like a very attractive technology," said Revis James, a renewables expert at the Electric Power Research Institute, a utility industry consortium.

Still, solar plants do tend to produce peak power during the hottest part of the day, when demand is highest and electricity is costly, so at certain times they are already competitive with plants using natural gas. And they have an advantage over the other widely available form of renewable power, wind turbines: they are more predictable.

With California utilities struggling to meet a state quota of 20 percent renewable power by 2010, the state has grown interested in solar plants. Pacific Gas and Electric has committed to building several plants and is expected to make announcements about new solar plants soon.

In Phoenix on Feb. 21, the Arizona Public Service unit of Pinnacle West announced plans for a large plant to be built by a Spanish company, Abengoa, and finished in 2011. That one will store heat so that it can continue to produce power for up to six hours after sunset.

Donald E. Brandt, the chief executive of Pinnacle West, said the decision to build the new solar plant was as important as his company's decision in 1973 to build the Palo Verde nuclear plant, the largest and most modern in the United States.

"The key is, the solar technology has advanced," Mr. Brandt said. At 280 megawatts, "it's a critical size; it's a real power plant; it's meaningful; it's beyond the demonstration stage."

Companies that build the plants have been working on improving the technology, raising efficiency and lowering costs. A battle among competing approaches is expected over the next few years.

The plant here, Nevada Solar One, built by a Spanish company, Acciona, is of a proven design. It uses a mirror in the shape of a parabola to focus light onto a black pipe with a heat-transfer fluid inside. The fluid is used to boil water into steam, which turns a generator that can produce 64 megawatts.

That is small compared with a plant running on coal or natural gas, but far bigger than a typical installation involving solar photovoltaic panels, the type of solar power most people are familiar with. That technology, while good for some uses, is far more expensive than solar thermal power.

Suppliers of thermal systems are gearing up for a boom. In Las Vegas, a company called Ausra is building a factory to make mirrors for one type of solar plant; it will double the world's manufacturing capacity. A German company, Schott, is building a factory in Albuquerque that will make heat-collecting tubes.

The newest solar-thermal technology involves building a "power tower," a tall structure flanked by thousands of mirrors, each of which pivots to focus light on the tower, heating fluid. That design can work even in places with weaker sunlight than a desert.
One of the big advantages of these plants is that they can be built with the capacity to store heat in what amounts to a giant Thermos. Experts say that will smooth production and make it easier to integrate the plants into the electrical grid.

If large numbers of plants are built, they will eventually pose some problems, even in the desert. They could take up immense amounts of land and damage the environment. Already, building a plant in California requires hiring a licensed tortoise wrangler to capture and relocate endangered desert tortoises.

"The one thing that's eventually going to raise its head is desert biodiversity, and the land area itself," said Terrence J. Collins, an environmental expert and professor at Carnegie Mellon University.

Building the plants in deserts poses another obvious problem: deserts are not exactly teeming with power lines. "Whatever you do, you've got to have the wiring," Mr. Collins said.

Despite the difficulties, solar thermal plants have an other-worldly beauty as they run.

At Nevada Solar One the other day, Mr. Boucher, 30, ran the computerized control room. Dressed in a T-shirt, sneakers and a Boston Red Sox cap worn backwards, he looked a bit like a teenage gamer as he used a computer mouse to manipulate the plant.
He was trying to produce as much electricity as possible while saving heat to tide the plant over as clouds cast episodic shadows on the solar array. "I've been fighting it all day," he said.

Outside, row after row of U-shaped mirrors, covering nearly a square mile, stretched across the desert. In the center of each U, where the force of the sun was magnified 70 times, ran a pipe painted black, and inside it flowed oil that warmed to hundreds of degrees as it collected the heat needed to run a generator.

The buzz in the control room, as Mr. Boucher worked, contrasted with the sanguine scene beyond the windows. Imperceptibly, in the dusty wind of the high desert, 182,000 mirrors moved from east to west, tracking the sun across the sky.

http://www.msnbc.msn.com/id/23482717/

Loans program for rural coal plants shelved
U.S. agency cites climate change and construction costs
AP

BILLINGS, Mont. - The federal government is suspending a major loan program for coal-fired power plants in rural communities, saying the uncertainties of climate change and rising construction costs make the loans too risky.

After issuing $1.3 billion in loans for new plant construction since 2001, none will be issued this year and likely none in 2009, James Newby, assistant administrator for the Rural Utilities Service, a branch of the Department of Agriculture, said Tuesday.

The program's suspension marks a dramatic reversal of a once-reliable source of new coal plant financing. It follows the announcement last month that several major banks will require plant developers to factor in climate change when seeking private funding.

"This is a big decision. It says new coal plants can't go to the federal government for money at least for the next couple years, and these are critical times for companies to get these plants built," said Abigail Dillen with the environmental law group Earthjustice. The group filed a federal lawsuit last year seeking to block the loan program.

At the time of the suspension, at least four utilities had been lined up for loans totaling $1.3 billion — for projects in Kentucky, Illinois, Arkansas and Missouri. A project in Montana was denied funding last month. Two more were recently withdrawn: last October in Wyoming and earlier this week in Missouri.

Newby said material and labor costs for new coal plants have been rising 30 percent a year, even as utilities struggle to pinpoint future costs of controlling greenhouse gas emissions. The 2 billion tons of those gases produced annually by coal-fired plants in the United States exceed the emissions of any other source.

Newby said those uncertainties prompted the White House's Office of Management and Budget to ask that new loans be put on hold until risks can be better quantified.

Rural utilities provide power to about 40 million customers across the nation. More than 60 percent of that electricity comes from coal.

Whether the plants that were awaiting federal loans can find alternative financing remains to be seen.

Associated Electric Cooperative Inc. announced this week it was "delaying indefinitely" its proposed plant in Norborne, Mo., after receiving word of the loan program suspension.

At least one developer, the East Kentucky Power Cooperative, is hoping to wait out the suspension of the loan program rather than seek more expensive loans on the open market, spokesman Nick Comer said.

Two more projects — Southern Montana Electric's Highwood Generating Station and Basin Electric Power Cooperative's Dry Fork plant in Wyoming — already are seeking private funding.

A representative of the East Texas Power Cooperative, which has proposed a plant in Plum Point, Ark., also said his utility would seek private financing if the loans are not resumed.

"We'll have to look elsewhere for funding, which will increase the interest expense, which will increase the electric bill for the consumers at the end of the line," said the cooperative's Ryan Thomas.

Newby, with the Rural Utilities Service, said his agency is considering imposing upfront fees on coal plant developers as a way to mitigate taxpayer exposure through the loan program. Initial discussions have centered on a 0.2 percent fee — equivalent to $2 million on every $1 billion in loans.

Newby added he was confident the government would work through the concerns over risk and resume issuing loans possibly as soon as 2010.

Glenn English, chief executive of the National Rural Electric Cooperative Association, said the program's suspension was a sign of "nervousness" among lenders anxious over the potential ramifications of climate change legislation now before Congress.

Depending on what policies are adopted, retail electricity prices could increase sharply once the costs of reducing greenhouse gases are factored in, he said. Utilities that drop coal-fired power proposals will be forced to shop for more expensive electricity on the open market.

"What you're seeing (with the Rural Utilities Service) is a general reflection of the attitude we find in the financial community, mainly this apprehension about what the future holds and what can be expected out of government," English said.
Copyright 2008 The Associated Press. All rights reserved.

"BHP downplays toxics rating: Coal mine operator says disposed ash not harmful; environmental group disagrees"

Farmington Daily Times
By Cornelia de Bruin

WATERFLOW –BHP Billiton New Mexico supplies coal to the two big power plants west of Farmington, Four Corners Power Plant in Upper Fruitland and San Juan Generating Station in Waterflow.

The company also takes back the ash that’s left behind after tons of coal is burned to generate power for more than 1 million customers in the western United States. Because it is the repository for the material, BHP Billiton is listed among other locals on the Environmental Protection Agency’s latest Toxics Releases Inventory.

The list tracks 2006 data. BHP Billiton’s Senior Counsel, Charles E. Roybal, said the company’s Navajo Coal Mine is listed by EPA as No. 4 for total ash disposal in San Juan County. BHP’s San Juan Mine is listed as No. 1 for disposal in the county.

Four Corners Power Plant has told Billiton it will no longer bring its ash for disposal.

BHP Billiton claims its acceptance of the ash –2.78 million tons of it—is not harmful, and downplays the importance of being included in the inventory.

“It goes back into where it came from, then we cover it with at least 10 feet of dirt and a layer of topsoil,” Roybal said. “It helps us restore the land to its original contours.”

The TRI report is a data-base containing detailed information on nearly 650 chemicals and chemical categories that 22,880 industrial and federal facilities manage through disposal or other releases, recycling, energy recovery, or treatment. Both local power plants are required to file reports with the EPA for mercury, sulfur dioxide and other emissions.

EPA lists BHP Billiton as “responsible for a large-quantity release to the environment,” according to Roybal.

He explained that Billiton simply uses the ash burned by the Four Corners and San Juan plants as material to fill the holes where the coal that became the ash was mined.

New Mexico’s Energy, Minerals and Natural Resources Department awarded BHP Billiton its Excellence in Reclamation Award on Sept. 25 for its work to restore areas affected by its San Juan Coal Company.

BHP Billiton supplies more than 15 million tons of coal to the plants each year.

Roybal pointed out an EPA ruling that does not consider coal ash to be hazardous or a toxic waste.

San Juan Citizens’ Alliance see it differently

Opposing views come from Mike Eisenfeld, spokesman for San Juan Citizens’ Alliance.

“We believe the coal ash is full of toxic materials, and that using it for fill is an inappropriate use of waste material,” he said, “It is a timebomb of toxicity. It becomes a problem in that it’s getting into the water.”

Eisenfeld noted that BHP Billiton has a reclamation permit, but that it has never ever furnished sufficient hydrological studies under the Surface Mining Control and Reclamation Act and the National Environmental Policy Act that could prove, or disprove the effect of its ash on local aquifers.

Coal combustion by-products and their use are issues that are being fought at the federal level, Eisenfeld said.

“Industry pushes this line that the ash is a by-product,” he said. “It is not a by-product, it is clearly a waste, a hazardous material that contains high sulfates, arsenic, barium and other elements.”

Using it as fill exposes the material to the elements, creating “fugitive dust” local residents inhale and the ash gets into the well water that they drink, Eisenfeld added.

“We’re calling them on it,” he said.

Countered Roybal, the TRI program provides information on various chemicals used for routine purposes or released in accidents or one-time event, tracking how they are managed, not whether they do harm.

“BHP Billiton mines in New Mexico are classified as among the safest in the United States, and operate under strict adherence with laws and regulations for minimizing environmental disturbances and for exceeding the laws where necessary to protect the environment,” Roybal said.

Cornelia de Bruin:
cdebruin@daily-times.com

_______________________________________________________________
2006 RESULTS
According to the Environmental Protection Administration, the Toxics Release Inventory tracked how 24.4 billion pounds of production-related waste was managed during 2006:
- 36 percent (8.84 billion pounds) was recycled on- and off- site.
- 33 percent (7.97 billion pounds) was treated on- and off- site.
- 18 percent (4.40 billion pounds) was the quantity disposed of or otherwise released on- and off- site.
- 13 percent (3.15 billion pounds) was combusted for energy recovery on- and off- site.
_______________________________________________________________