Power plant plans shelved

SRP ends bid to restart and operate Mohave Generating Station

KINGMAN - The Salt River Project has pulled the plug on its plans to restart the Black Mesa Pipeline and Mohave Generating Station. SRP released a statement late Tuesday afternoon stating it was ending its efforts.

John Coggins, SRP's manager of resource planning and development, said the main reason it ended the effort was because it could not reach a timely purchase agreement with Southern California Edison.

SCE is the majority shareholder of the plant. It owns 56 percent of the plant and operated it for nearly 36 years before the plant shut down in December 2005. SRP owns 20 percent of the plant. The other shareowners are the Nevada Power Company and the Los Angeles Department of Water and Power.

SCE closed the plant in order to comply with a consent agreement. The agreement was the conclusion of a 1998 Clean Air Act lawsuit brought against SCE and the other owners of the plant by several environmental groups.

SRP had formed a new ownership group that was willing to purchase the plant from SCE.

"It basically boiled down to reaching an agreement in time," Coggins said. SRP wanted to reach an agreement by the end of 2007 in order to have the plant up and running by 2011. SRP needed the plant producing power by 2011 in order to make restarting it feasible.

In order to get the plant up and running, SRP would have had to spend nearly $1 billion to install additional pollution-control systems, replace a coal slurry line that feeds the plant, reopen the Black Mesa Coal Mine on Navajo and Hopi Nation lands and find an alternative source of water to operate the mine and the slurry line.

SRP was planning to use electricity from the plant to feed the growing demand for power in the Phoenix area. The plant can generate 1,580 megawatts of electricity, enough to serve more than one million homes.

According to a draft study from the U.S. Department of Interior's Office of Surface Mining Reclamation and Enforcement, the two Native American nations could have received more than $53 million in royalties if the mine reopened.

A representative from SCE said the company does not comment on potential asset sales or purchases, but it was continuing to look at two possible options for the plant - either sell or decommission the plant.

"We hope that this is the end of one of the West's biggest global warmers," said Andy Bessler, the Sierra Club's associate Southwest representative. The Sierra Club was one of the environmental groups that brought the Clean Air Act lawsuit against the owners of the Mohave Generating Station in 1998.

"Now is a good time for a transition to renewable energy. This is where the rubber meets the road," he said.

Coggins said it would be possible to convert the plant to solar but it would not generate anywhere near the amount of energy it did as a coal-fired plant.

The release of SRP's statement on Feb. 6 coincided with the last day the U.S. Department of the Interior's Office of Surface Mining Reclamation and Enforcement was collecting public statements for an Environmental Impact Statement. The study concerned the reopening of the Black Mesa Coal Mine, the replacement of a coal slurry line and an alternative source of water to support the mine and the slurry line. All of were needed in order to restart the Mohave Generating Station.

The OSMRE was asked to prepare the study in January 2006 by SCE, Peabody Western Coal Company and Black Mesa Pipeline, Inc. In June, SCE announced it would not seek to restart the plant. SRP asked the OSMRE to continue the study.

OSMRE released a draft EIS in November. It started holding public hearings and gathering comments from the public in January.

Coggins said SRP had not seen any of the public comments gathered by OSMRE before making its decision to end its plans to restart the plant.

The final draft of the EIS is due some time this summer.

According to the draft EIS, while the plant was open it had a payroll of $22.2 million and returned $364 million to the local economy. When it closed, around 305 employees lost their jobs. The majority of the workers lived in Kingman.