To: Editors, News Directors

Date: October 31, 2002

For: Immediate Release

Expansion Springerville Plant Wins Approval
Expansion of Coal-Fired Plant will Slash Total Emissions

PHOENIX - The Arizona Corporation Commission approved the expansion of the Springerville Generating Station in northeastern Arizona. The power plant currently consists of two coal-fired steam turbine units, each with a nominal rating of 380 megawatts (MW). Tuesday's decision provides conditional approval for two additional coal-burning steam turbine generating units (Units 3 and 4), each with a nominal rating of up to 400 MW.

The proposed plant's effect on the environment was critical to the Commission's evaluation and ultimate approval. In order to gain approval, the applicant agreed to retrofit the two existing units with new technology designed to cut emissions of two pollutants that are known to cause air quality problems - sulfur dioxide and nitrogen oxide.

Once the retrofit is complete and the two new units are operational, there will be a net 70 percent reduction in sulfur dioxide emissions and a net 50 percent decrease in nitrogen oxide emissions from the emission levels authorized under the current permit for Units 1 and 2.

The expanded plant will also utilize lower-sulfur coal, which further reduces the plant's air emissions.

"This is a win-win for the Springerville-Eager area and its economy," explained Commission Chairman Bill Mundell. "The expansion will bring $10 million per year in additional tax revenues for Apache County, Arizona gains 800 new megawatts of power, new jobs are created in a depressed area and regulated air pollutants are slashed by 50 percent or more. Without approving the expansion, the Commission had no authority to impose new pollution control technologies for the existing plant."

Chairman Mundell sponsored an amendment that requires a cost-benefit analysis of new pollution control technologies every five years. The Commission reserves the right to conduct a hearing to determine whether any or all of the improvements should be implemented.

Commissioner Marc Spitzer cited fuel diversity as an important issue weighed in favor of the project, along with the evolution of new emissions technologies and the availability of coal with lower sulfur content.

"I believe it is critical to have a diverse mix of fuels powering our state," Spitzer said. "With turmoil in the Middle East and the issues over gas pipeline capacity currently playing out at the Federal Energy Regulatory Commission, this plant made sense with the conditions we attached to it."

The Commissioners also heard testimony on the impact of the expanded plant on the aquifer and surrounding watershed. The decision requires that the developers establish a groundwater monitoring and mitigation plan that meets with the approval of the Arizona Department of Water Resources. Commissioner Spitzer amended the Commission order to include specific groundwater modeling data that was presented in earlier testimony.