Unit 2 at Cholla Power Plant in Joseph City is slated for closure in 2016.
The closure will eliminate approximately 30 positions at the plant, but according to Arizona Public Service Company Vice President of Fossil Generation David Hansen, the positions should be vacant by that time due to natural attrition, such as retirement.
“We can’t say definitively that there will be no layoffs, but we took aggressive action over the last few years, knowing that this was potentially coming, to minimize the impact,” Hansen said.
Plans for the closure are part of an agreement APS officials hope to reach with the Environmental Protection Agency (EPA). Hansen explained that as a result of regional haze rules imposed by the EPA, the company would have to spend at least $350 million to continue operating all of the units at Cholla. Over the last 10 years, APS has already spent more than $350 million on environmental upgrades.
“As a result of the EPA’s, what we call heavy-handed standards, we have made the decision to retire Unit 2 to prolong the life of the other units,” Hansen said. “It will be retired on or before April 2016.”
If the EPA accepts the agreement, Units 1 and 3 will continue to operate as usual for about 10 more years.
APS Vice President of Environmental and Chief Sustainability Officer Ann Becker explained that the proposal being made for the Cholla plant is similar to one made at the Four Corners plant.
“We are in discussions with the EPA around the future of those units,” she said. “The discussion centers around a compromise that would include closing Unit 2, and allow the continued operation of those units (Units 1 and 3). It would allow them to continue operating through the mid-2020s.”
Although Units 1 and 3 would continue to burn coal during that period, Becker noted that total emissions would be reduced as a result of closing Unit 2.
“Our proposal has more significant long-term effects than the EPA’s plan,” she said.
Hansen explained that at the end of the agreement period there would be two options for Units 1 and 3. The units could be converted to natural gas, or shut down completely. According to Hansen, the final decision will come down to economics. If it is financially beneficial, they will be converted.
Unit 4 is owned by Pacificorp and APS operates that unit on its behalf. According to Hansen, no layoffs or closures are planned for that unit at this time, however, Pacificorp faces the same issues as APS regarding regional haze rules.
“Staffing reductions are confined to Unit 2 at this time,” he remarked.
Cholla Power Plant employs approximately 250 people and has an annual payroll of about $29 million.
