Power Plants in Arizona — an Emerging Industry, a New Water User

Is review under way to ensure wise water use?

The generation of electrical power is a growth industry in Arizona, with 19 power plants proposed for various areas of the state. The surge in the number of power plants wanting to operate within Arizona is a relatively recent occurrence. The movement began in the fall of 1999 when a power plant was proposed for the Kingman area and continues with Nogales and Vail mentioned as possible future sights. One official remarked that Arizona promises to be a hub for power plants.

The privately owned plants are being constructed to profit from the emerging energy market resulting from deregulation. Called merchant plants, these power operations are gearing up to sell energy in western markets. Various reasons are given for Arizona’s attraction as a sight for these plants including access to natural gas, lower cost of land, labor and operations, and less restrictive regulatory statutes.

One other decisive reason given for Arizona’s suitability for power plants deserves special attention and scrutiny — the availability of water. This raises some critical and fundamental water questions: How much water will the power plants use? What is to be the source of the water? What review process ensures that power plant water use is consistent with state water priorities and policies?

The table on the next page lists power plants and their water use. Water for the plants will come from various sources. For example, Harquahala and Sundance will use CAP water. Red Hawk’s main supply is expected to be effluent. The Casa Grande plant will use either CAP water or effluent. Kyrene plans to use either Salt River Project surface water or effluent supplied by City of Tempe. San Tan will use either SRP water or water from the City of Gilbert. Plants using surface water will rely on groundwater as a backup supply.

Groundwater, however, will be the main source for the power plants, contributing about two-thirds of the supplies, or 67,900 of a total of 97,550 acre-feet. Much of this groundwater will come from retired farmland. For example, the operators of Mesquite and Arlington Valley plants purchased agricultural land within the Phoenix Active Management Area. The land was retired, with the grandfathered irrigation right converted to Type I water right for use in the plants. Big Sandy and Griffith, both located outside AMAs, also will rely on groundwater.

Does the water use of projected power plants pose a problem to Arizona? Viewed individually the plants do not consume large quantities of water, but their collective water use is significant. Also, the likely prospect that additional power plants will be proposed for the state raises further water concerns. This provide grounds for a debate about the implications of an increased number of power plants using a greater share of the state’s water.

Some find little reason for concern. They view the new and expanded plants and their water needs as mainly a shift in water use from agriculture to industry. Water formerly used for agriculture will now be utilized for power generation.

In fact, a case can be made that shifting water rights from agriculture to industry results in a water savings because of the formula that is used to convert an irrigation grandfathered right to a Type I water right. The five acre-feet used annually to irrigate cotton converts to a three-acre foot Type I water right. Proponents of the proposed Toltec power plant say it would annually pump about 10,000 acre-feet of groundwater, in contrast to about 13,000 acre-feet of existing agricultural uses.

The water efficiency of the new plants also is noted in their favor. In contrast to coal fired plants, the new operations rely on natural gas and use significantly less water, about 40 to 60 percent less water per megawatt than a coal fired plant.

Further, it is pointed out that the economic benefits the plants offer to small towns and rural areas are not to be overlooked. For example, some residents of Mobile, a small town of about 75 families between Gila Bend and Interstate 10, said they support the Montezuma plant because it promises paved roads, access to utilities and school improvements. Not all Mobile residents agree, however, some raising concerns about air pollution and sinking water tables. Plants proposed for the Gila Bend and Coolidge areas have garnered local support. The consensus of the Gilbert community on the other hand is strongly against the expansion of SRP’s San Tan facility. Opposition also seems to be growing to the proposed Toltec plant. Objections include the plant’s proximity to the new Ironwood National Monument and its water use.

Others, while conceding some advantages to power plants locating within the state, are still uneasy about the development. They question whether long-range planning has been done to determine if power plants represent the best use of the state’s water resources. They fear that an over commitment of water resources for power generation will possibly close out future options for other economic opportunities. Also some are concerned about Arizona exporting power out of state. They argue that using water to generate power to benefit other states is tantamount to allowing that state use of Arizona’s water. This contention would likely cause many Arizonans to wax indignant at the thought of Arizona-generated power exported to California, a likely scenario.

To help settle various environmental issues, including water supply and use, a Line Siting Committee evaluates power plant applications to decide whether to issue a Certificate of Environmental Compatibility. The application then goes to the Arizona Corporation Commission for final approval. The LSC examines a broad range of environmental issues, including present and future availability of water. A member of the Arizona Department of Water Resources serves on the committee, and DWR hydrologists are involved in evaluating the application.

The degree of official water scrutiny bestowed upon a proposed power plant depends upon its location, whether within or outside an AMA. An operation outside an AMA must satisfy the LSC that a long-range, 40-year water supply is available. (Forty years is the expected life span of the plants.) Various kinds of modeling are done to determine suitable water supplies and possible effects on groundwater. The Big Sandy plant located outside an AMA confronts a more vigorous review. Since gas lines supplying the plant cross BLM land a formal Environmental Impact Statement is required. The building of the Griffith Plant also requires an EIS. Located on an Indian reservation, the South Point Power Plant does not need a Certificate of Environmental Compatibility.

Plants located within an AMA not only deal with the LSC but also must meet Groundwater Management Act regulations. Extra effort is required to demonstrate that a power plant’s proposed use of groundwater is compatible with AMA management plans.

The LSC and AMA regulations are the primary tools for reviewing and evaluating power plant water use. Are these tools adequate for the job? Some critics question whether the LSC has the appropriate authority to ensure adequate regulation of water supplies. They say the statute establishing the committee was passed in 1972 when the Palo Verde Nuclear Generating Station was being built and never upgraded, even after the state deregulated the power industry. Many agree that concerns are indeed justified not only about the committee’s authority to restrict water use, but also DWR’s power in non-AMA areas.

Some people say that within an AMA a General Industrial Permit would enable power plant operators to avoid various GMA water restrictions. A GIP would allow a new use of groundwater without requiring that an applicant buy an existing right or retire farmlands for water rights. Critics of GIPs view it as a loophole within the GMA, and the Governor’s Water Management Commission is reviewing its use to ensure a more restricted right to withdraw groundwater.

The Arizona Center for Law in the Public Interest has taken an interest in power plant siting in the state, with the intent of limiting their numbers. Executive Director Tim Hogan says the concern is that power generated through the use of Arizona’s water will for the most part be going somewhere else. He says, “It is an equity issue. The states in this region should share the burdens of power production.”

Hogan builds his case on Arizona law that he says requires the need for such plants to be balanced against their environmental impacts, including effects on water supplies and air quality. He defines need as serving Arizona.

Hogan says, “Little thought was given during the approval process about whether these plants were needed. I see an endless line of approvals unless we start taking a look at whether we need these things. My effort is to get the Arizona Corporation Commission to quantify the need for these plants so that we at least know there is an end somewhere in sight.”

The three suits he filed regarding early plant approvals were resolved by quantifying need and including a provision that reserves power for Arizona during times of peak demand. He says, “There was the perverse possibility we could have all these plants in place with power committed elsewhere in July and August, and we would have blackouts here.”