TO: Editors, News Directors

DATE: January 11, 2002

FOR: Immediate Release

Arlington Power Plant Expansion Gets Okay
Groundwater Depletion Concerns Lead ACC to Require Dry Cooling

PHOENIX - Duke Energy received conditional approval to construct a 600-megawatt expansion of the Arlington Valley Energy Facility currently under construction in western Maricopa County. The project was originally contemplated as a water-cooled power plant, using a maximum of 3,900 acre-feet of groundwater per year. The Commission approved an amendment offered by Commissioner Marc Spitzer that instead requires Duke to use dry cooling technology. Dry cooling uses significantly less water - less than 10 percent of the water required for conventional cooling.

As an offset to the plant's groundwater impact and since no aquifer recharge project exists in the area, the Spitzer amendment also requires Duke to participate in the Central Arizona Water District's Agua Fria Recharge Project, in cooperation with the Arizona Water Banking Authority. The Agua Fria Aquifer is within the Phoenix Active Management Area and is in critical need of recharge. Duke Energy will have to recharge 1,000 acre-feet of water per year throughout the life of the power plant.

The Commission also approved other amendments designed to mitigate the environmental impact of the power plant. Commission Chairman Bill Mundell offered two amendments similar to those approved in the expansion of the Santan Power Plant in Gilbert. The first amendment requires Duke Energy to periodically review new pollution control technologies and upgrade the plant if doing so would deliver significant reductions in air emissions.

The second amendment requires Duke to meet a 2.5 parts per million emissions level for nitrous oxides (NOx) it also holds the applicant to strict emission standards such as those in coastal California. The amendment approved by the Commission reads:

"Applicant shall install and operate catalytic oxidation technology that will produce a carbon monoxide (CO) emission rate equivalent to California BACT and make collateral reductions for Volatile Organic Compounds (VOCs) and condensable particulate matter."

BACT stands for Best Available Control Technology. The purpose of BACT is to control specific emissions and limit the adverse effect of a plant's emissions on a region. BACT prescribes standards and technology required for compliance with air quality provisions.

Catalytic oxidation technology is used to remove carbon monoxide and Volatile Organic Compounds, including those which condense to form particulate matter, from the exhaust stacks. Catalytic converters on automobiles perform a similar function, though on a much smaller scale.

For more information on the siting of power plants, visit the Arizona Corporation Commission's website at http://www.cc.state.az.us/news/pr07-23-01b.htm and read the Frequently Asked Questions about the siting process.