PHOENIX - In a decision yesterday, the Arizona Corporation Commission approved the Bowie Power Station proposed for eastern Cochise County in southeastern Arizona. The project, to be constructed in two 500-megawatt phases, is a water-cooled power plant using a maximum of 6,000 acre-feet of groundwater per year when both units are operating continuously at full output. SouthWestern Power Group II is the project developer.

The approval requires SouthWestern to install solar technology when they begin building the second power block. This is the first merchant power plant that is required to incorporate solar technology as a core part of the total project. Merchant power plants supply power to the wholesale market as opposed to power plants built by a utility with the primary objective of serving its own customers.

During Tuesday's meeting, the Commission accepted the 22 restrictions placed on the project by the Arizona Power Plant and Transmission Line Siting Committee. After hearing from several representatives of the Bowie and Willcox communities, the Commissioners approved an amendment offered by Commissioner Spitzer. The Spitzer amendment specifically addresses concerns by nearby pistachio farmers that groundwater pumping could affect the surrounding water table.

Summary of the Spitzer Amendment: The amendment requires SouthWestern Power Group II to establish and pay for a groundwater monitoring program that meets Arizona Department of Water Resources criteria. Once the project is operating, the SouthWestern will have to establish and make annual contributions of $100,000 to a Groundwater Impact Mitigation Fund until the fund reaches a balance of $500,000. Any business or individual who can prove, through successful arbitration, that groundwater pumping has caused property or economic damage will be able to submit a claim for reimbursement. SouthWestern will be required to maintain a total balance of $500,000 in the fund.

Status reports on the program are to be filed with the Town of Bowie, the Pistachio Pass Irrigation District and the Cochise County Board of Supervisors. The Groundwater Impact Mitigation Fund must be maintained for three years after the plant ceases operation and is decommissioned.

Commissioner Marc Spitzer said the amendment was prudent considering that the lasting impact of the power project. "I proposed this amendment to answer the concerns of the pistachio farmers and the irrigation district," Commissioner Marc Spitzer said. "Although we heard testimony that the power plant's groundwater needs would be less than if the land were farmed, I don't think you can be too careful. We're making decisions that could affect an economically depressed area for generations to come."

Other Environmental Conditions: Twenty-two conditions were imposed by the Arizona Power Plant and Transmission Line Siting Committee. They include:

· Establishment of a monitoring project and mitigation fund for ground subsidence and earth fissure monitoring. Subsidence is a potential side effect of groundwater pumping. Cracks, fissures or dips can form in the surface of the earth because the water deep underground that provided physical support is no longer there.

· Contributions to the Bowie Fire District to enable it to acquire an additional emergency services vehicle as well as funding of emergency response and hazardous materials training for firefighters.

· Making arrangements with local law enforcement and the Cochise County Sheriff because the project will involve an increase in traffic and may result in the need for emergency responses by local law enforcement. This was an amendment sponsored by Commissioner Jim Irvin.

· Prior to construction of the facility, SouthWestern must provide the Commission with a technical study showing that sufficient transmission capacity exists to accommodate the output of the plant and the effect of its output on reliable operation of the electric grid.

· Conditions requiring compliance with air and water quality standards imposed by the Arizona Department of Environmental Quality and the Arizona Department of Water Resources. Additionally, the applicant will have to participate in and comply with all standards for safe, reliable power delivery.

"I was pleased to support this project, in part because it includes solar technology as a key component of the whole project. The level of support from the local community was also impressive. Les Thompson, Chairman of the Cochise County Board of Supervisors indicated that Bowie has one of the highest tax rates of any Arizona community," Chairman Bill Mundell explained. "The residents and business people were very excited about the tax and economic development benefits of having the power plant in their community. Additionally, the project will bring several hundred construction jobs to Bowie and Willcox and, ultimately, the 30 or 40 people needed to run the plant."

Commissioner Irvin voted in favor of the project, saying: "I do believe the need for this project was established in the record. Further, I believe the project is in the public interest and meets the balancing test." He was referring to the siting statute that requires the Commission "to balance, in the broad public interest, the need for an adequate, economical and reliable supply of electric power with the desire to minimize the effect thereof on the environment and ecology of this state." (Arizona Revised Statutes § 40-360.07, subsection B.)