Salt River Project will spend more than $400 million on new pollution-control equipment at one of its coal-fired power plants as part of a settlement with the federal government involving suspected violations of the Clean Air Act.

The Arizona utility, which serves 935,000 customers in the Phoenix area, must also pay a nearly $1 million fine and spend an additional $4 million on environmental-improvement projects within the state.

SRP, which has been negotiating the deal with the Department of Justice since April 2007, said Tuesday that it had been anticipating the extra expenses and that it won't result in customer rate hikes.

Plant upgrades

SRP admits it made various modifications to the Coronado power plant dating to the 1980s. But the utility says it considered the changes routine maintenance and upgrades.

The EPA, however, said SRP was required, under amendments to the Clean Air Act, to have applied for permits.

Jim Pratt, SRP manager of generation engineering, said the upgrades affected the way the plant crushed coal before burning it and included modifications to the boiler and the turbine.

But he said none of the changes necessarily made the plant dirtier.

However, the changes, coupled with increased customer demand, have prompted the facility to operate at a higher capacity, Pratt said.

And the more coal plants run, the more pollution they create.

In Coronado's case, operating capacity has jumped to above 90 percent, compared with about 55 percent in the mid-1990s.

As part of the settlement, SRP will now need to install scrubbers at the plant to help control sulfur-dioxide emissions.

Full Story: http://www.azcentral.com/arizonarepublic/news/articles/
2008/08/13/20080813srp-settlement.html