CAP and the Navajo Generating Station

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CAP and the Navajo Generating Station

  1. 1. CAP and the Navajo Generating Station<br />Presentation to NGS <br />Stakeholder Discussions<br />January 21, 2011<br />
  2. 2. Central Arizona Project<br /><ul><li> 336-mile aqueduct stretches from Lake Havasu to Tucson
  3. 3. 14 pumping plants lift water nearly 3000 feet
  4. 4. 8 siphons, 3 tunnels
  5. 5. Lake Pleasant/New Waddell Dam
  6. 6. Delivers 1.6 million acre-feet of Colorado River water annually to Maricopa, Pinal and Pima counties</li></li></ul><li>Central Arizona Project<br />Federal project, title held by the United States<br />Constructed by U.S. Bureau of Reclamation<br />Construction began in 1973, first water delivered in 1985<br />Delivers Colorado River water to replace use of mined groundwater in Central and Southern Arizona<br />Total cost $4+ billion<br />Central Arizona Water Conservation District<br />Authorized by state legislation and formed by Maricopa, Pinal and Pima Counties in 1971<br /> Operates CAP system and repays federal debt<br />Governed by 15-member Board of Directors elected from three-county service area<br />
  7. 7. Total = 1,610,237 acre-feet<br />2009 Water Deliveries<br />
  8. 8. CAP Customers<br />Cities, towns and water companies include:<br />City of Phoenix<br />City of Tucson<br />City of Scottsdale<br />City of Mesa<br />Town of Eloy<br />Arizona-American Water Company<br />Agricultural districts include:<br />Central Arizona Irrigation & Drainage District<br />Maricopa-Stanfield Irrigation & Drainage District<br />
  9. 9. CAP Customers<br />Native American communities include:<br />Ak-Chin Indian Community<br />Yavapai-Apache Tribe<br />Fort McDowell Indian Community<br />Gila River Indian Community<br />Pascua Yaqui Tribe<br />Salt River Pima-Maricopa Indian Community<br />San Carlos-Apache Tribe<br />Tohono O’odham Nation<br />Tonto-Apache Tribe<br />
  10. 10. Power for CAP<br />The Colorado River Basin Project Act authorized the US to participate in a coal-fired power plant to provide power for CAP pumping as an alternative to building additional dams in the Grand Canyon (the Udall Compromise)<br />95% of the energy used by CAP is produced at the Navajo Generating Station (NGS)<br />
  11. 11. CAP and NGS<br />CAP uses about 2.8 million megawatt hours per year of NGS power to deliver CAP water to Indian and non-Indian water users in Central and Southern Arizona.<br />The remaining 1.5 million megawatt hours per year of the CAP share of NGS power is sold, generating revenues that are credited to the Basin Development Fund and used:<br /> to meet CAWCD’s annual obligation to repay the costs of construction of the CAP, and <br />to fund the costs of Indian water rights settlements in Arizona.<br />
  12. 12. NOx Controls<br />EPA is currently evaluating controls on nitrogen oxide (NOx) emissions from NGS under EPA’s Regional Haze rules to protect visibility in nearby “Class I” areas. <br />Two types of controls are under consideration to reduce NOx emissions at NGS: <br />low NOx burners with separated overfire air (LNB/SOFA), which are being installed voluntarily right now, and <br />selective catalytic reduction (SCR). <br />A third option would require the use of polishing baghouses, in addition to SCRs, to control downstream particulate emissions.<br />
  13. 13. Impacts on CAP Energy Charges<br />The current estimate for the cost of LNB/SOFA is $45 million.<br />CAP energy charges would increase by about $0.54 per acre foot.<br />Salt River Project estimates that SCRs would cost $544 million, plus $11.9 million in added annual OM&R costs.<br />CAP energy charges would increase by about $8.33 per acre foot – a 17% increase.<br />SCRs and polishing baghouses would cost $1.131 billion, plus $21 million in additional annual OM&R expense – double the cost of SCRs alone. <br />CAP energy charges would increase by $16.30 per acre-foot – a 33% increase over our 2010 rate of $49 per acre-foot.<br />
  14. 14. Impact on Basin Development Fund Revenues<br />Basin Development Fund revenues are credited first against CAWCD’s annual repayment obligation, then used to fund Indian water rights settlements, including fixed OM&R for water deliveries.<br />Installation of SCRs would reduce Basin Development Fund revenues by about $149 million between 2016 and 2036 and $1.1 million per year thereafter.<br />SCRs plus polishing baghouses would reduce revenues by about $289 million between 2016 and 2036 and $1.9 million per year thereafter.<br />Under current conditions, revenues are expected to exceed the repayment obligation by 2015, so loss of these revenues would directly affect Tribes with water rights settlements.<br />
  15. 15. Summary<br />COST IMPACTS OF BART CONTROL OPTIONS<br />
  16. 16. Impacts of Potential Plant Closure on CAP Energy Costs<br />Plant closure is not an acceptable outcome of the BART rulemaking process or of any other near-term regulatory process.<br />CAWCD would have to acquire a substitute source of pumping power at market rates.<br />CAWCD estimates that, by 2017, CAP pumping energy costs would increase by 50 to 300 percent (rising from $65/acre foot to $95 to $180/acre foot).**<br />**From forecasts of electricity prices by Navigant (2007) and Black and Veatch (2009) <br />
  17. 17. Increased Cost of Pumping Power<br />300% increase<br />50% increase<br />
  18. 18. Impacts of Potential Plant Closure on Development Fund Revenues<br />CAWCD would also have to replace $50 million or more in annual revenues that would have been applied against its repayment obligation each year, forcing substantial increases in CAWCD tax rates, water service capital charges, or both.<br />Indian tribes would lose the benefit of additional Development Fund revenues that could total as much as $60 to $90 million a year between 2016 and 2023 alone.<br />
  19. 19. Lost Development Fund Revenues<br />Amount NOT going to water rights settlements<br />New water service capital charges of about $80 per acre-foot <br />
  20. 20. QUESTIONS?<br />

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