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Mohave won’t be online for about 4 years, Edison says

April 1, 2006 by  
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By Kathy Helms-Diné Bureau

WINDOW ROCK — Mohave Generating Station will not resume operating for
approximately four years and a Black Mesa Mine standstill agreement
set to expire March 31, 2006, has not been renewed, Southern
California Edison announced Wednesday.

In its monthly status report on Mohave to California Public Utilities
Commission, SCE said, “because of the many uncertainties that remain
unresolved, SCE has reluctantly concluded that further aggressive
pursuit of interim operations at this time is not warranted.”

SCE said it has explored extensively the possibilities for modifying
the Mohave Consent Decree and Mohave’s air quality permit provisions
so Mohave could resume operating on an interim basis prior to
installing $1.1 billion in pollution control equipment called for in a
1999 consent decree.

SCE said Mohave co-owners, the Hopi Tribe, the Navajo Nation and
Peabody Western Coal Co. continued their negotiations during the month
to resolve all remaining water-related issues, facilitated by a
neutral third party.

Mohave co-owners and Peabody also continued to negotiate a new coal
supply agreement for Mohave, “and further negotiations are planned,”
SCE said. All negotiations are confidential.

Navajo Nation Attorney General Louis Denetsosie said Friday that the
parties have never announced that they were going to end negotiations,
and though the mediation team has not scheduled any more meetings, “I
think that is the expectation, that people are going to talk about it.”

Denetsosie said the latest information he had was SCE’s March 29
report filed with CPUC.

“All they said was that most likely the date they’re looking at is
2009 or 2010. What it says in that report is there are too many
complications of trying to get a reopening immediately. It takes too
many parties to agree to that. That would involve the environmentalists.”

A reduction in force has been initiated which will reduce Mohave’s
work force of just over 300 to no more than 224 employees by July 1.
“SCE will continue to assess the Mohave staffing level, and the
staffing level may be adjusted further as circumstances warrant.”

Reports due

The U.S. Bureau of Reclamation which would control operations of the
C-Aquifer pipeline, according to a confidential negotiating document,
expects to complete its final report on the C-Aquifer study in April.
The BOR report will be based on USGS drilling and test pumping of the
proposed C-Aquifer well-field area performed in 2005, as well as two
2005 C-Aquifer groundwater modeling studies.

Depending on study results, lesser quality C-Aquifer water could be
used to slurry coal. The Office of Surface Mining expects to issue a
draft environmental impact statement for public comment by June.

A March report by the Natural Resources Defense Council says the
high-quality Navajo Aquifer now used by Peabody is in decline and
industrial pumping already has done damage. Peabody disagrees.

NRDC said Peabody’s bid to increase its water use by 50 percent at
Black Mesa Mine through “life of mine” access to the N-Aquifer
threatens the main source of drinking water for many Navajo and Hopi
people. NRDC said new data contradict the government’s claims that
Peabody’s groundwater pumping is within legal limits established to
protect Navajo and Hopi water supplies.

Until late 2005, Peabody withdrew more than a billion gallons of
drinking water per year to produce coal slurry and transport it
through 273 miles of pipeline to Mohave Generating Station.

Despite Mohave being Black Mesa Mine’s only customer and Peabody
ceasing operations at the mine, OSM is proceeding with Peabody’s
application for a “life of mine” permit that would increase its water
usage over the next 20 years to more than 6,000 acre-feet per year,
about 50 percent more than it has used historically.

OSM’s draft environmental impact statement for Peabody’s application
is due out this month.

Peabody and BHP Billiton are part of the FutureGen Industrial Alliance
partnering with the U.S. Department of Energy to design, construct and
operate the world’s first coal-fueled zero-emissions power plant which
is expected to be in operation by 2012.

Just transition

Roger Clark of Grand Canyon Trust said the organization was informed
Thursday that an administrative law judge in the Edison rate case had
made a “significant, unprecedented move to set aside Edison’s share of
sulfur allowances to be considered for disbursal as requested by the
Just Transition Coalition” in their motion filed Jan. 11.

A hearing in the rate case is set for Tuesday. “We’ll see if Edison
objects to that decision, and if they do, our attorney will be there
to rebut the objection,” Clark said.

A full vote of the commission on the rate case is set for April 13,
which will include Grand Canyon Trust’s motion.

“Edison is asserting jurisdiction over those sulfur allowances on
behalf of the California ratepayers and how we proposed that the
moneys might be disbursed is probably going to be tinkered with,”
Clark said.

“But at minimum we’d love to see some sort of requirement that the
equivalent of the value of those allowances get reinvested with the
tribes in some of the wind projects that they’re working on now.

“It’s kind of like Robin Hood money robbing from a dirty power plant
to invest in a clean power plant and to get the tribes in as equity
owners, not just as leasees,” he said.

April 1, 2006

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