$jhqgd1xpehu - central arizona project board and...with the new power plant rule expected to ......

February 7, 2013

The 113th Congress' First Session began on Thursday, January 3, 2013. The following Legislative Issues Update outlines the status of the Board-approved Legislative Agenda as well as other relevant federal issues. The Business Planning and Governmental Programs Team will come before the Public Policy Committee on a regular basis to seek guidance and direction on these and other proposed rules and legislation that may arise during the coming year.

Priority Issues

EPA Rulemaking regarding Navajo Generating Station (NGS) Emissions Controls

Continue efforts to engage elected officials, stakeholders, and governmental agencies in influencing the EPA to apply due weight to the economic impacts of its BART determination for NGS.

On January 18, the EPA issued a proposed federal implementation plan (FIP) that establishes BART for NGS. Compliance with the proposed NOx emissions standard, which will require Selective Catalytic Reduction on all three units, could be required as soon as 2018. There is flexibility, however, with regard to alternative measures for "better than BART" compliance by 2023. EPA is also willing to consider alternative proposals that extend the compliance timeframe to 2025 or 2026.

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Climate Change and Energy Legislation

Monitor legislative efforts and respond appropriately to mitigate potential impacts on CAP operations and on the sale of Navajo surplus power.

It appears that the Obama Administration will attempt to move forward initiatives to address climate change and could be looking to use existing executive authority, rather than relying on new legislation from Congress. With the new power plant rule expected to be finalized in a matter of months, many environmentalist are pushing the administration for a rule covering greenhouse gas emissions from existing power plants as well.

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Public Policy Agenda Number 3.

Cybersecurity Threats and Legislation

Monitor legislative efforts to address cybersecurity and potential threats to critical infrastructure and vital computer systems.

The White House continues to work on a draft executive order to improve the digital defenses of power plants, water systems and other forms of critical infrastructure.

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Issues That Require CAP Involvement with Other Stakeholders

Clean Water Restoration Act

Continue to oppose expansion of the coverage of the Clean Water Act from "navigable waters of the United States" to "waters of the United States."

No update to report at this time. _________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Navajo/Hopi Water Rights Settlement Legislation

Continue to seek a settlement of these water rights claims and support legislation necessary and appropriate to implement a settlement.


Colorado River Basin Salinity Control Forum

Support the activities of the Colorado River Basin Salinity Control Forum.


Bureau of Reclamation Colorado River Basin Water Supply and Demand Study

Continue to collaborate with Federal, State, tribal, and environmental stakeholders, to augment water supplies and address challenges with growing water needs and the potential impacts of climate change.


Hualapai Water Rights Settlement Legislation

Support the settlement of these water rights claims and support legislation necessary and appropriate to implement a settlement.

No update to report at this time.

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Federal Rulemaking

EPA Rulemaking, Greenhouse Gas Emissions

Monitor proposals to regulate greenhouse gas emissions from large facilities under the Clean Air Act.

The EPA faces a statutory deadline to finalize its first-ever greenhouse gas rule for new power plants by April 13, 2013, though it has missed similar deadlines in the past.

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EPA Rule, Hazardous Air Pollutants (HAP), Maximum Achievable Control Technology (MACT)

Monitor the implementation of the MACT Rule and its implications on the Navajo Generating Station.


EPA Final Rule, Drinking Water Contaminant Candidate List (CCL3)

Monitor the implementation of the final rule on the Drinking Water Contaminant Candidate List 3.


If you have any questions or would like more information regarding any of the issues contained in this report, please contact

CAP Business Planning and Governmental Programs, 623-869-2150.

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Public Policy Agenda Number 3. Attachment 1.

It appears that the Administration will attempt to move forward initiatives to address climate change and could be looking to use existing executive authority, rather than relying on new legislation from Congress. With the new power plant rule expected to be finalized in a matter of months, many environmentalist are pushing the administration for a rule covering greenhouse gas emissions from existing power plants as well.

In addition, Senate Majority Leader Harry Reid (D-Nev.) has introduced placeholder legislation to address extreme weather. It was one of the ten bills he offered on opening day to highlight the Democrats’ legislative priorities for the year. The proposal, introduced as S. 7, currently lacks specific policy details but reportedly will “improve the resilience of the United States to extreme weather events and prevent the worsening of extreme weather conditions.”

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A complete listing of all Arizona Delegation committee assignments, as well as the leadership of key Senate and House committees of interest to CAP, are provided in today’s Public Policy Committee meeting materials.

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Cybersecurity Executive Order

Background: On September 19, 2012 Homeland Security Secretary Janet Napolitano indicated publicly at a Senate Homeland Security and Government Affairs Committee that an executive order on cybersecurity is in the process of being drafted. The executive order currently circulating among relevant agencies would create a voluntary program in which companies that operate critical infrastructure could choose to meet a set of security standards developed by the government in partnership with the private sector. Congressional action is still essential on three issues: Department of Homeland Security personnel needs and liability protection -- which are seen as important for fostering information sharing -- and increased criminal penalties.

On September 24th, Homeland Security Committee Chairman Lieberman sent a letter to the President asking that the cybersecurity executive order contain mandatory standards. Senators would also like the executive order to strengthen information sharing about cybersecurity threats between government and private industry.

Update: The House Homeland Security Committee is expected to lead in 2013 on critical infrastructure cybersecurity. The committee’s 2013 plan explained that it will monitor Dept. of Homeland Security efforts to protect critical infrastructure assets against cyber attacks and “examine the resiliency of national critical infrastructure” to withstand such attacks. A new cybersecurity bill remains a strong possibility after several different proposals failed to win enactment last year.

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CAP has a pipeline that runs through land of the Pascua Yaqui Tribe pursuant to easements. Increased activity within the easement area (construction of a hotel and additions to golf course) has led to some potential impacts. A single access maintenance road, 24 feet in width, lying east, adjacent to the pipeline from Valencia Road, to the southern boundary of the Pascua Yaqui Tribe property could be constructed to divert all vehicular travel from the top of the pipeline. This would better ensure the integrity of the pipeline and still allow access for essential maintenance to each of CAP’s respective facilities.

The proposed access road runs through a parcel of land owned by BLM that is leased to the Tucson Unified School District (TUSD) under a recreation and public purpose patent. CAP has an easement for the pipeline through that parcel, but does not have one for a road, and the tribe does not have any rights to this land. Federal legislation that would authorize BLM to enter into a land swap agreement with the BIA would then allow the tribe to have control of the land for the proposed access and maintenance road.

Such a bill would benefit CAP by allowing for negotiations with only one entity on a joint use agreement and easement for the full length of the maintenance road, rather than negotiating easements with two additional entities that have no interest, financial or otherwise, in the road. This could, in turn, speed up the process for negotiating and building the road.

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COMMITTEE POSITIONS FOR THE ARIZONA CONGRESSIONAL DELEGATION

113TH CONGRESS

Senator Jeff Flake

Energy and Natural Resources

Foreign Relations

Judiciary

Special Aging

Senator John McCain

Armed Services

Foreign Relations

Homeland Security and Governmental

Affairs

Indian Affairs

Rep. Ron Barber

Homeland Security

Ranking Member, Subcommittee on Oversight and Management Efficiency

Small Business

Armed Services

Rep. Trent Franks

Armed Services

Judiciary

Chairman, Subcommittee on the Constitution and Civil Justice

Subcommittee on Crime, Terrorism and Homeland Security

Rep. Paul Gosar

Natural Resources

Subcommittee on Energy and Mineral Resources

Subcommittee on Indian and Alaska Native Affairs

Subcommittee on Water and Power

Oversight & Government Reform

Rep. Raul Grijalva

Natural Resources

Ranking Member, Subcommittee on Public Lands and Environmental Regulations

Subcommittee on Energy and Mineral Resources

Subcommittee on Indian and Alaskan Native Affairs


Education and the Workforce

Subcommittee on Early Childhood, Elementary and Secondary Education

Subcommittee on Health, Employment, Labor, and Pensions

Rep. Ann Kirkpatrick

Transportation and Infrastructure

Subcommittee on Economic Development, Public Buildings And Emergency Management

Subcommittee on Transit and Highways

Subcommittee on Water Resources and Environment

Veterans' Affairs

Ranking Member, Subcommittee on Oversight and Investigations

Subcommittee on Economic Opportunity

Rep. Ed Pastor

Appropriations

Ranking Member, Subcommittee on Transportation, Housing and Urban Development, and

Related Agencies

Subcommittee on Energy and Water Development

Subcommittee on Financial Services and General Government

Rep. Matt Salmon

Education and the Workforce

Subcommittee on Health, Employment, Labor, and Pensions

Subcommittee on Higher Education and Workforce Training

Foreign Affairs

Chairman, Subcommittee on the Western Hemisphere

Subcommittee on Asia and the Pacific

Rep. David Schweikert

Science, Space and Technology

Subcommittee on Oversight

Subcommittee on Space

Subcommittee on Technology

Small Business

Chairman, Subcommittee on Investigations, Oversight and Regulations

Subcommittee on Economic Growth, Tax and Capital Access

NEW LEADERSHIP ON KEY COMMITTEES

Senate Committee on Energy and Natural Resources: Sen. Ron Wyden (D‐OR), Chairman; Sen.

Lisa Murkowski (R‐AK), Ranking Member.

Senate Environment and Public Works Committee: Sen. Barbara Boxer (D‐CA), Chairman; Sen.

David Vitter (R‐LA), Ranking Member.

House Committee on Natural Resources: Rep. Hastings (R‐WA), Chairman; Rep. Markey (D‐

MA), Ranking Member.

TO: David Modeer and CAWCD Board FR: Terry Bracy, Tracy Tucker, and Brandon Avila DA: January 22, 2013 RE: Federal Legislative Report for Board Meeting House Energy and Commerce Committee Approves Hydropower Regulatory Efficiency Act (H.R. 267) On January 22, the House Energy and Commerce Committee approved the Hydropower Regulatory Efficiency Act, which is sponsored by Rep. Cathy McMorris Rodgers (R-WA) and aimed at promoting hydropower by streamlining various licensing and permitting requirements. Specifically, the "Hydropower Regulatory Efficiency Act of 2013," H.R. 267, would allow hydropower projects under 10 megawatts that use existing canals, pipelines or other conduits to move forward without the usual permitting by the Federal Energy Regulatory Commission (FERC). The bill would also order FERC to explore a two-year licensing process for hydropower development at existing nonpowered dams and closed-loop pumped storage projects, and direct the Energy Department to study pumped storage to support intermittent renewable energy sources like wind and solar. The House unanimously approved the bill last summer, and there was bipartisan support for it in the Senate, but the measure didn't come to a vote before the end of the 112th Congress. Energy and Environment – 113th Congress Legislative Outlook As the new session begins, the most pressing issue facing Congress is the need to increase the debt ceiling. That deadline is a month or so away, and it comes around the same time that Congress will have to deal with the across-the-board spending cuts known as the "sequester." Congress also must extend the "continuing resolution" that is funding the government through March 27. Once those issues are resolved, the focus is expected to turn to tax reform. After some of the more pressing issues are taken up, the new Congress will continue to debate a number of pending energy and environmental issues that stalled in the last Congress.


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House Republicans plan to continue efforts launched in the previous Congress to block environmental rules and expand oil and natural gas exploration. Meanwhile, the Senate Energy and Natural Resources Committee is expected to begin work on an informational hearing on natural gas and possible movement on public lands bills. Incoming Chairman Ron Wyden (D-OR) and ranking member Sen. Lisa Murkowski (R-AK) remain split over the export of natural gas. Wyden has said he's worried that exports could affect domestic prices, while Murkowski has been an outspoken advocate for exports. There is hope among offshore drilling advocates that Wyden and Murkowski will reach a revenue-sharing agreement that would encourage more coastal states to welcome drilling off their shores -- something environmentalists would fight hard to avoid. Wyden and Murkowski, however, are expected to first tackle smaller issues on which they both agree such as public lands bills, hydropower, geothermal energy or timber development. Senate Environment and Public Works Chairwoman Barbara Boxer (D-CA) has signaled that she plans to devote more resources to climate change in the 113th Congress than in the previous two years by creating a new senior committee staff position focused on climate and convening a group of senators who plan to produce legislation. Administration Outlook With gridlock expected in Congress, the Obama Administration will continue to work on a number of initiatives at the executive level. Industry and environmental leaders are awaiting a State Department recommendation on the Keystone XL oil pipeline, EPA climate change rules for power plants and new Interior Department draft rules on hydraulic fracturing, among other pending actions. The EPA will continue to lead on emissions policy in the second term, as well as climate change. The agency faces a statutory deadline to finalize its first-ever greenhouse gas rule for new power plants by April 13, though it has missed similar deadlines in the past. The future power plant rule will be followed by a greenhouse gas rule for the current U.S. electrical fleet, which accounts for 40 percent of the nation's carbon dioxide emissions. The EPA agreed to promulgate the existing source rule more than two years ago under the terms of a settlement with environmentalists, but the agency has made slow progress and may not propose it until later this year. The agency has also pledged to revisit its atmospheric ozone standard after the White House pulled the plug on an EPA proposal in 2011. While EPA does its work, the President has promised to lead a "conversation across the country" on climate change. The Administration is sponsoring briefings on the draft 2012 "State of the Climate" report, released last week in cities around the country. Some environmentalists and others are also pushing for the President to host a White House

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summit on climate change. However, with the heads of various agencies stepping down, it is unclear how quickly the second-term regulatory agenda will be rolled out. EPA Administrator Lisa Jackson will be replaced temporarily by Deputy Administrator Bob Perciasepe until the Administration nominates a permanent successor. Interior Secretary Ken Salazar will leave in March, but his replacement has not yet been announced. Also unknown is the next head of the National Oceanic and Atmospheric Administration after current chief Jane Lubchenco leaves in February. Energy Secretary Steven Chu is also expected to be resigning soon, though he has yet to formally announce his plans. While a number of names have been circulated for these replacements, it appears that some common profiles include 1) a person in a former or current high-level elected official role (Governor, Senator, maybe House member); 2) a Westerner; and 3) a person who has some nexus to natural resources issues. Navajo Generating Station (NGS) On January 18, the EPA announced its proposed federal implementation plan for the Navajo Generating Station (NGS). The EPA is proposing Best Available Retrofit Technology (BART) and an Alternative to BART that includes a more flexible timeline for reducing NOx emissions. Below is a summary released by the EPA: BART: EPA is proposing that BART is a plant-wide emission limit for NOx of 0.055 lb/MMBtu (Million Metric British Thermal Units) by 2018. This can be achieved with Selective Catalytic Reduction (SCR) in combination with the existing LNB/SOFA (low-NOx burners) the owners of NGS voluntarily installed between 2009 and 2011. Alternative to BART: The proposed “Alternative to BART” provides the owners of NGS additional time, until 2023, to install new controls to achieve the same emission limit as BART. This option gives credit to the owners of NGS for the emission reductions that have resulted from voluntarily installing low-NOx burners in 2009 - 2011. Had the owners waited for EPA’s BART determination, the reductions would not have started until 2018. This alternative also recognizes the importance of NGS to numerous Indian tribes located in Arizona and the federal government’s reliance on NGS to meet the requirements of water settlements with several Indian tribes. Additional Alternatives: EPA has also evaluated, and is requesting comments, on two other alternatives that require additional emission reductions over longer timeframes in this notice. EPA may

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consider a longer timeframe for installing SCR if the owners of NGS achieve sufficient additional NOx reductions. Emissions Reductions: SCR, in combination with the low-NOx burners, provides the greatest control of NOx emissions. The combination of these technologies will reduce emissions by more than 84% or a total of 28,500 tons per year. Visibility Improvements: These emission reductions will result in cumulative visibility benefits of 35 deciviews and perceptible visibility improvement (greater than 1 deciview) at all eleven Class I areas impacted by NGS. Visibility will improve at Grand Canyon National Park by 5.4 deciviews. Cost: EPA’s analysis shows that SCR will reduce NOx emissions cost-effectively at $2,240/ton. These costs are comparable to, or lower than, the costs associated with other BART determinations. Electricity rates are expected to increase by less than 1% for customers of the Salt River Project. Timeframe: EPA is allowing additional time for this source because it is on tribal land and not subject to the same legal deadlines as sources on state land. Under the Tribal Authority Rule (TAR), EPA has the discretion to determine if and when a FIP is necessary and appropriate including the timeline for complying with those requirements. Credit for Prior Reductions: EPA is giving NGS credit for early installation of the low-NOx burners. EPA has calculated this credit to be 92,175 tons, which is a key component of the proposed Alternative to BART. Next Steps: EPA is providing a 90-day comment period and will hold several hearings near the facility in Spring of 2013.

$jhqgd1xpehu - central arizona project board and...with the new power plant rule expected to ......

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