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Arizona Utility Drops Coal For NatGas, Responding to Climate Push

Tucson Electric Power (TEP) has announced it will end its use of coal in favor of natural gas in its largest local generation plant two years ahead of previous plans. TEP officials cited regional clean air and increasing tougher federal emissions standards as drivers for the move.

TEP is closing out coal-burning at its Unit 4 in the H. Wilson Sundt Generating Station; the unit is capable of burning natural gas or coal and the utility changed the fuel use in the past based on commodity prices for the two fossil fuels at any given time. While losing the cost-based flexibility, burning gas allows for 30% more electricity to be generated by the unit, a TEP spokesperson said.

TEP is ending its use of coal more than two years ahead of the previously set Dec. 31, 2017 deadline under an agreement it had entered with EPA. This change will allow local Pima County officials to meet stricter federal ozone standards taking effect this year, and will reduce greenhouse gas (GHG) emissions called for in the CPPs by 2022, the utility indicated in a news release announcing the change.

The southern Arizona-based utility is committed to developing a cleaner generation portfolio, and eliminating local use of coal as a major part of that effort, said CEO David Hutchens. "With the current low cost of natural gas, ending coal use at the Sundt Station is a cost-effective way to improve our environmental performance while preserving the reliability of our local electric service," Hutchens said.

Hutchens said the move will be good for consumers and the community, not to mention the regional environment.

In contrast to TEP's approach, however, in neighboring New Mexico a unit PNM Resources has filed a settlement with state regulators calling for the closing of only part of its coal-fired generation units. The plant in question is the coal-fired San Juan Generating Station.

The settlement agreement with the New Mexico Public Regulation Commission is based on the utility closing two units at San Juan by the end of 2017 and installing selective noncatalytic reduction equipment on the remaining two units to reduce water use and seven different emissions overall by 50%; nitrogen oxide would be cut 90%. Environmental groups have balked at this agreement, saying the power plant will remain one of the state's major air pollution sources.

*Correction: In the original article, NGI incorrectly implied that Sen. John McCain (R-AZ) opposed TEP's move, which is not the case, according to company representatives. The report also listed the CPP as a "driver" for TEP's switch from coal, but the utility only stated that shutting down the use of coal will help comply with the CPP rules. NGI regrets these errors.

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