Think "Arizona Public Service" and what comes to mind? Bloated electricity rates, incompetent management, gross callousness toward public concerns about nuclear safety? Whether the topic is overpriced skyboxes or plummeting dividends, APS is the company we all love to hate.
Its cross-town counterpart, however, is another matter entirely. The Salt River Project, the Valley's other big power provider, is as friendly as an old-fashioned milkman. For years SRP has been known for its moderate rates, sensible decision-making and earnest commitment to the good of the community.
But the Grand Canyon is changing all that.
Salt River Project
Ever since the National Park Service put out a little study last year blaming the canyon's wintertime air pollution on the Navajo Generating Station at Page, SRP has been acting more like the National Coal Association than the Consumers' Union. Which is to say, whining, barking and snarling in a most unneighborly way that the government is going overboard on regulation. SRP, which manages the plant, is calling for yet more study before pollution controls are adopted and claiming it has been unfairly targeted by the park service report.
If you've been paying any attention at all to the national debate over acid rain--"What acid rain? It can't be my fault"--you've heard it all before. And if you've been in Arizona long enough to remember the Phelps Dodge Corporation's ferocious fight to keep operating the Douglas copper smelter, you'll recognize the tactics, as well. (Phelps Dodge spent close to a million dollars on lawyer's fees to fight regulations and called smelter pollution "a fake issue.")
The United Mine Workers union, whose members dig the coal that fuels the Navajo power plant, describes the attitude perfectly in its 1974 publication "The ABCs of Coal" (look under "R is for Robber Baron").
The days of the Douglas copper smelter, like those of the dinosaur, are finally over. With Arizona's copper smelters either cleaned up or closed, the Navajo plant is now the largest industrial source of sulfur-dioxide pollution in the West. It is number one on the environmentalists' hit list.
Despite all the caterwauling, SRP isn't even on the hook for its full share of the cleanup costs. The rest of us, however, aren't so lucky. Taxpayers will be subsidizing SRP's share, thanks to an obscure clause in federal law that protects SRP and other purchasers of Navajo power from cost increases.
Jay Gould, America's original pirate in pinstripes, couldn't have finessed it any better.
SRP USUALLY OPERATES like Ralph Nader says a utility would if it were run by its customers which, in a sense, is true in this case. Since its inception as a half-public, half-private delivery system for water from federal dams upstream on the Salt and Verde Rivers, the Salt River Project has been the little guy's pal.
The Salt River Project was the first utility to figure out nuclear energy wasn't worth the cost and to cut its losses on the Palo Verde Nuclear Generating Station (to the benefit of its ratepayers). SRP, despite its cadre of itchy-fingered dam builders, was the first Phoenix 40 company to peg Orme Dam as a loser and to support alternatives. If not always perfect in its instincts, SRP has, at least, always been perfectly willing to respect changing public values.
But in a scathing analysis of the park service report released earlier this month, SRP consultant Jerry Shapiro accused federal environmental officials of "initiating a bewildering and frightening program directed at forcing very large expenditures onto electric-power consumers all over the West."
At the Navajo Generating Station, Shapiro contended, sulfur-dioxide scrubbers would cost up to $1 billion and would provide no perceptible environmental benefit. Nils Larson, supervisor of SRP's air-quality division, goes even further and attacks the federal regulations on which the cleanup effort is based.
"We have a poor regulatory basis for what we are talking about," Larson says, criticizing rules to protect visibility in places like the Grand Canyon and other national parks. "It's as if you were stopped for speeding where there was no posted speed limit and no speedometer to judge your speed."
Who would have figured on hearing so much static from the utility which prides itself on building and operating the cleanest coal-fired power plant in the region, the Coronado Generating Station, near Springerville? Certainly not the environmentalists, who have been picking off the state's major pollution sources, one by one, for more than a decade.
"I didn't expect them to march in and say `Gosh, we're ready to write the check,' without a question," says environmental consultant Priscilla Robinson of Tucson, a key strategist in the campaign. "But I was surprised by the degree of opposition. It seems somewhat out of character. I mean, they are putting out 200 tons per day of sulfur dioxide on the park boundary; where the hell is it supposed to be going?"
SRP officials argue the recent park service study, the first to use a chemical tracer to separate the power plant emissions from other sources of haze trapped in the Grand Canyon, contradicted the findings of past reports. They also say that the park service report was too limited to produce a complete picture of pollution sources dimming the vistas. "We have photos from a hundred years ago showing just as much haze," Larson says.
The environmentalists, however, and park service officials believe further study won't change the basic conclusion--that the Navajo power plant is a significant source of wintertime air pollution in the canyon. And they are keeping steady pressure on the Environmental Protection Agency to require new pollution-control equipment. (Urban air pollution, mainly from Southern California, has already been pretty well-established as the main cause of summertime haze in the canyon.)
"SRP's demand for further study seems like a strategy for delay," Robinson notes.
Some onlooking scientists draw parallels between SRP's stance and the opposition of eastern utilities to acid-rain controls. "They're using the old acid-rain argument of `We don't have enough information--need more studies,'" comments one scientist with the National Research Council, an agency of the National Academies of Science and Engineering in Washington, D.C.
SRP's handling of this issue does depart from its pattern. Guided by Jack Pfister, its subtle and brilliant general manager, SRP usually avoids any open association with the atavistic belligerence common to the utility industry.
Clues to SRP's hard-line stance, however, lay in its huge stake in the Navajo power plant and in the utility industry's stake in preventing a new wave of pollution-control requirements from taking hold. SRP, which manages the plant for a consortium of utilities, is by far the largest user of electricity and so faces the biggest cleanup cost.
Debate over the Grand Canyon study has spread nationwide because its outcome could affect most other power plants in the West. Indeed, when the federal Environmental Protection Agency convened a public meeting to discuss the study last April, the SRP delegation was swamped by attendees from other utilities clamoring to challenge the study.
According to sources inside the National Research Council (NRC), the study findings have sharpened the clash between utilities and environmentalists so much that it is no longer possible to find a qualified expert who isn't already enlisted on one side or the other. "It would be hard to empanel a group of `unbiased' experts if we were to try to do so," said council staff scientist Robert Smythe in an interdepartmental memo last summer.
SRP's projected cost, though substantial, is nowhere near its real share of the Navajo plant. SRP gobbles up 33 percent of the total power produced there but would only pay 21 percent of the cleanup costs.
Here's why: Under federal laws, which SRP attorneys helped write, it is only accountable for its actual ownership in the plant, which is 21 percent. The other 12 percent--power SRP gets at super-cheap rates--comes from another part-owner of the Navajo plant, the Bureau of Reclamation. (The bureau uses a small part of its electricity to pump Central Arizona Project water and sells the rest to utility companies under a formula set by federal law.)
But the same law that guarantees SRP cheap power from the bureau also guarantees the utility can't be charged to clean up the pollution associated with producing that power.
"I know we were involved in the negotiations for the law," says Larry Crittenden, SRP spokesman. "I don't know to what extent we worked on that clause."
Who does pay for the bureau's share of the cleanup? We do, probably. Both Arizona senators, John McCain and Dennis DeConcini, have indicated they are reluctant to tamper with the law setting up the power-sales arrangement. But if the costs can't be passed through to the users of the federally owned electricity, the only other choices to finance the bureau's share are to tax CAP water users (which will hit farmers very hard) or to tax property owners in the CAP distribution area (primarily Maricopa, Pinal, and Pima Counties).
Park service officials are telling the EPA that the cleanup is worth doing. They estimate the benefits of clean air at the Grand Canyon approach $3.4 billion--well in excess of the $950 million it will cost utilities to retrofit the Navajo plant with sulfur-dioxide scrubbers.
Whatever the shortcomings of their study, park officials insist, it is clear that SRP's current pollution control--burning low-sulfur coal and dispersing the smoke through tall smokestacks--isn't good enough anymore (and if the study is on-target, never was).
The park service contends that SRP and other plant owners made a commitment to pollution control when they received permission to build the plant in 1973. Larson acknowledges the promise, contained in a 1972 environmental impact statement but says it doesn't count now.
"They're taking it out of context," Larson says. "Those commitments were predicated on the need to meet a regulatory standard that was later rescinded. The standard of concern when those statements were made no longer exists."
The original sulfur-dioxide regulations, to which he refers, were aimed at protecting public health. The new regulations, to protect visibility, stem from amendments to the federal Clean Air Act passed in 1977--a year after the Navajo plant was completed.
The Salt River Project gets no relief from state environmental officials, either. Air-quality experts in the Arizona Department of Environmental Quality say the park service report, if anything, underestimates the power plant's contribution to air pollution. Nancy Wrona, DEQ assistant director for air quality, confirms that the agency will endorse EPA's proposed finding, issued in September, that pollution controls are necessary. "We believe the finding is reasonable and can be used as EPA has used it, as a basis to require pollution-control equipment," Wrona says.
SRP has a separate, but related, headache stemming from new requirements DEQ has placed on its operating permit for the Navajo power plant. And its argument against the new permit conditions closely resembles Phelps Dodge's long, expensive and unsuccessful fight to ditch similar state requirements placed on the Douglas copper smelter in 1986.
DEQ officials believe that the Navajo power plant may be emitting more sulfur pollution than SRP claims because sulfur content varies in the coal it burns. So, as a condition to renew the annual operating permit, the agency wants SRP to increase testing of the incoming coal and smokestack emissions.
But SRP is fighting to remove the conditions from its operating permit, where new revelations could easily be translated into penalties or further regulatory action. "We are willing to discuss additional testing, but we are opposing it as a permit condition because it is contrary to the state's regulatory authority," Larson says. "The permit is being used to do rule-making, and it shouldn't."
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So the utility is appealing the conditions before the state Air Pollution Control Board. Reminded that Phelps Dodge used the same argument before the board three years ago and lost on all points, spending hundreds of thousands of dollars on legal fees in the process, Larson replies, "Phelps Dodge didn't push it through the remainder of the process. We are prepared to go to court if necessary.
"What we are talking about is an issue that goes to the constitutional make-up of the country and how regulatory authorities should act," Larson asserts.
The environmentalists, while admiring SRP's bravado, find it puzzling. "They are being awfully inflexible considering the probable impact on their customers," says Robinson. "We've done a little figuring and we estimate the cleanup will cost the average residential user the equivalent of one candy bar per month in rate hikes."