Plan emerges for fourth unit at Cholla Power Plant

Ryan Randazzo
The Republic |

When Arizona Public Service Co. announced in September that the company would seek to shut down part of the Cholla Power Plant in Joseph City, there was a big hole in the plan.


APS had a plan for three of the four units. The No. 4 unit at the plant is owned by PacifiCorp/Rocky Mountain Power, which provides power in Oregon, Washington, California, Utah, Wyoming and Idaho. At the time, PacifiCorp didn't know what to do with its generator.

Now it does. PacifiCorp said in a Sept. 29 filing to Oregon regulators that the company will try to negotiate a deal with the Environmental Protection Agency to stop burning coal at the unit by 2025 and either convert to natural gas or retire the unit after that.

The need for action stems from a 2010 notice from the Environmental Protection Agency that Units 2 through 4 at the plant need pollution controls.

APS has proposed closing the No. 2 unit at the coal-fired plant in 2016, and the Nos. 1 and 3 units could convert to natural gas or close in 2025 when the plant's coal contract expires.

It's going to be cheaper for APS to shut down No. 2 and convert Nos. 1 and 3 to natural gas than to spend an estimated $350 million on pollution controls, APS officials said.

PacifiCorp reached a similar conclusion, that it would be cheaper to retire the company's unit early or convert it to gas in 2025 than to add the new pollution controls to the coal unit in 2018.

Switching to natural gas would significantly reduce most forms of pollution associated with coal, but also require a new gas pipeline to serve Cholla.

The real loser in the deal is the El Segundo mine in New Mexico, owned by Peabody Energy, that supplies Cholla coal.

APS and PacifiCorp have a power exchange where the northern utility supplies APS with electricity during the summer, and APS supplies power to PacifiCorp in the winter. The No. 4 unit is commonly used for that exchange.

The EPA and Arizona Corporation Commission must approve the APS plan.