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Water and Power: Inextricably tied to Arizona’s Growth
Richard Rushforth
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Abstract
The nexus between power and water is undeniable. In semi-arid and arid regions, the generation of power holds much controversy because of its dependence on water. In 2000, thermoelectric generators in Arizona consumed 113,000 acre-feet per year of fresh water and this number will surely rise as Arizona’s population increases. With such large volumes of water, the trade off between water for consumption and water for power becomes a contentious issue. In Arizona, scarce water resources, an increased demand for power due to rapid population growth, and the politics behind Central Arizona Project (CAP) allocations compound this trade off. Simply put, CAP water allocated to an electricity generator cannot be used for human consumption and as the population rapidly increases this trade-off—water for power or water for human consumption—becomes more stressed.
Since 1996, twenty-one proposed electrical power plants have been reviewed by the Arizona Corporation Commission (ACC), the government entity that approves the construction of power plants in Arizona. Of these proposed generators, the Big Sandy power plant was the first power plant application denial in ACC history. Three other power plants—the Toltec, Montezuma and Signal Peak power plants—either followed suit or had its application withdrawn. Many of the approved generators, however, were ‘merchant generators’ or privately owned and operated power plants. The majority of the electricity generated by these merchant generators is intended for sale on the wholesale electricity market, not solely for the electricity needs of Arizonans. Meaning, by proxy, these power plants will transmit the water so precious to Arizona’s economic growth and survival out of state for the growth and development of other Western states. Given the history of water rivalry between Arizona and California, this is a very contentious policy issue.
For this paper, I would to explore the ACC’s power plant approval process. In particular, the reasons for the application denial of the Big Sandy power plant. If I can find information on the other denied or withdrawn power plants, I will include that information in my paper. Furthermore, I want to look at the Arizona Power Plant and Transmission Line Siting Committee’s process of granting a Certificate of Environmental Compatibility (CEC) for proposed power plants larger than 100 MW. The approved power plants are water-cooled (‘wet’ power plants), rather than air-cooled (‘dry’ power plants) that use much less water. Therefore, I want to explore why ‘dry’ power plants are not the norm in Arizona and explore the future of ‘wet’ power plants in Arizona. In general, I would like to find out how much of the electricity generated in Arizona is transmitted to other states and correlate this wattage to water use
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Introduction
A popular image of the American Southwest is the tumbleweed slowly tumbling over the
dry, uninhabited desert terrain pushed along by a lazy afternoon breeze. However, within this
pacific image lies a subtle undertone that often goes unnoticed: the tumbleweed is not a native
species. The tumbleweed, like many of the millions of people that now call Arizona home, came
from far away to establish residence in Arizona’s warm, arid climate. Unlike the tumbleweed,
the nearly 6 million people that now call Arizona home require houses to live in and electricity to
power the conveniences of modern lives (“Population of Arizona”). Where the tumbleweed once
gently rambled over open desert, it now crisscrosses through the advance of suburban
neighborhoods and across sprawling metropolitan areas such as Phoenix and Tucson.
Arizona, while rich in beauty and open land, is generally characterized by a scarcity of
water resources. The majority of Arizona’s population resides in areas that receive a foot or less
of rainfall each year. The Phoenix metropolitan area, now home to more than 3.5 million people,
on average receives only 6 to 8 inches of rain annually (“Population of Arizona”). As a result,
the need for water in a rapidly growing water scarce region has historically had profound effects
on the desert landscape. Most notably, the rivers that once ran through Arizona’s metropolitan
areas are now dry largely due to damming rivers upstream of cities or unsustainable groundwater
pumping. Furthermore, land subsidence and cracking has also resulted from the unsustainable
over-reliance on groundwater—and all this was before 1980 (“Water Conservation”). Without
another large, reliable source of water for the Arizona’s metropolitan areas, the population
growth seen today in Arizona would have never been possible.
The completion of the Central Arizona Project (CAP) transformed the water resources
paradigm in Arizona. The 336 mile long CAP snakes its way 2,400 feet uphill through the desert
to deliver 1.5 million acre-feet per year of water to thirsty spigots in Central Arizona, including
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the Phoenix and Tucson metropolitan areas (Central Arizona Project). The CAP, which was
initially built to assuage a 2.5 million acre-foot per year groundwater overdraft, now provides
water to numerous municipalities, agricultural lands, industrial facilities and Indian nations
(Central Arizona Project). The CAP has provided these water users with the ability to
supplement, or replace, their water supply with a renewable source and alleviate massive
groundwater overdraft. It is not surprising that much of Arizona’s rapid population growth has
taken place after the completion of the CAP—the threat of no water is enough to keep people,
businesses and an abundance of affordable housing at bay.
For Arizona’s residents the CAP has heretofore provided reliable water to supply
population growth as well as existing users. During the 1990’s, Arizona was the second fastest
growing state in the United States, only lagging behind Nevada (“CensusScope”). No change in
the 21st century has occurred; Arizona and Nevada annually vie for the title of fastest growing
state in the United States (“Top 10”). Between 2000 and 2006 Maricopa County, Arizona—
home of the Phoenix metropolitan area—numerically, has been the fastest growing county in the
United States, adding approximately 696,000 new residents in that time (“US Census Bureau).
To put that into a digestible metric, the Phoenix metropolitan area grows by a small city each
year. However, this unprecedented growth causes logistical problems. How does one provide
access to adequate public facilities such as water, electricity, sewerage, police and fire protection
to a region that annually grows by the city, not to mention the rest of the state? This paper will
explore electrical generation in Arizona and how it relates to population growth and Arizona
water policy.
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More People, More Water, More Power
The realization of an assured water supply for Arizona’s metropolitan areas has resulted
in a population boom; however, this boom is not without its costs. Foremost is that a growing
population demands more water. The water that is needed to support rapid population growth
must come from the water budgets of existing water users, namely agriculture, or from
groundwater wells. Agriculture currently is the largest consumptive water user in Arizona and is
feeling the pressures of urban and suburban development (Jacobs and Colby 4). August and
Gammage, point this out in Shaped by Water: An Arizona Historical Perspective: “[f]armers […]
have not been at odds with the conversion of their water to urban purposes because their land is
simultaneously being converted to the highest value crop: a housing subdivision” (August Jr.
and Gammage Jr. 14). Therefore, much of the rapid population growth has occurred in areas
where agricultural land is easily converted into residential properties. However, this does not
preclude the conversion of Greenfield desert lands to housing subdivisions, as seen by the rapid
development of the northeast and far northwest valleys of the Phoenix metropolitan area. While
overall, the conversion of agricultural land to residential housing results in a net reduction in
water demand and consumption, this situation may ultimately push a development past the
physical carrying capacity of the land, resulting in deleterious consequences for the environment,
economy and people of Arizona.
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It takes more than water to sustain and maintain population growth in Arizona: a reliable
and low-cost source of electric power is necessary to cool homes, pump water and power the
conveniences of modern life. Furthermore, water does not flow 2400 feet uphill for 336 miles on
its own. The CAP is one Arizona’s largest, and by far most important electricity customers in
Arizona: each year the CAP consumes 546.7 megawatts of power, equivalent to the annual
output of a medium sized power plant (“Colorado River Basin Project”). While assured, reliable
water supplies may allow Arizona’s population to grow, an assured, reliable and low-cost supply
of electricity powers much of Arizona’s water supply and in large part keeps residents in
Arizona.
However, the converse is true: large volumes of water are required to generate electricity.
This aspect of Arizona’s population growth, represented in Figure 1, creates an interconnected
relationship where reliable electricity is needed to supply water and water is needed to supply
electricity, and both are
required to maintain and
sustain population
growth. Unfortunately,
the unique uphill
topography of the CAP
inhibits the generation of
hydropower on the canal
to offset the electricity
demands to pump water
uphill and provide
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wholesale electricity therefore this power must come from a regional power plant. The Bureau
of Reclamation owns 24.3% of the Navajo Generating Station near Page, Arizona to provide this
power (“Colorado River Basin Project”).
As the population of Arizona has grown, so to has per capita electricity consumption
(Hojjati and Battles). As shown by a report published by the Energy Information Administration
entitled, “The Growth in Electricity Demand in U.S. Households, 1981-2001: Implications for
Carbon Emissions” the authors found that between 1981-2001 there was a 29% increase in the
number of houses in the United States and a 23% increase in electricity use per household (2).
The increased electricity use per household over time is in large part due to the increasing
popularity and reliance on electrical household appliances (3). In Arizona, much of this reliance
is on air conditioning and evaporative coolers, which many people consider necessary during
Arizona’s hot summers. Concomitant to the increased demand for cooling in Arizona is the
increased size of new homes. Not only are there more houses to cool, but due to larger floor
plans, houses with two air conditioners and the
popularity of vaulted ceilings, there is more square
footage per house to cool. This relationship is shown
in Figure 2.
With the increased demand for electrical power
needed to accommodate population growth, there is a
need for new sources of electricity in Arizona.
Utilities and merchant generators (non-utility electric
service providers) have proposed to build twenty
power plants in Arizona over the last decade (State of
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Arizona). Unlike the 34 existing power plants in Arizona prior to 1998, these proposed power
plants entered into an era of competitive electricity markets, not monopolized utility markets
(Walls 6). A competitive electricity market affords the consumer more choices “to spend their
energy dollars” thereby “shifting [the electricity] marketplace control from the government to
consumers” (1). A consumer controlled electricity marketplace, in theory, should result in
lowered electricity bills. The structure of Arizona’s deregulated electricity marketplace is
complex and diverges from the intended topic of this paper, so it will not be analyzed further.
However, the key points will be summarized in the following paragraph.
Deregulated electricity markets are currently limited to certain service areas that have
worked out agreements with the Arizona Corporation Commission (ACC), the regulatory body
that oversees privately owned electricity utilities. Many utility service areas have instituted
competitive marketplaces, these include:
Ajo Improvement Company, Arizona Electric Power Cooperative, Arizona Public
Service Company, Citizens Utilities Company, Duncan Valley Electric Cooperative,
Graham County Electric Cooperative, Mohave Electric Cooperative, Morenci Water and
Electric Company, Sulphur Springs Valley Electric Cooperative, Navopache Electric
Cooperative, Trico Electric Cooperative, and Tucson Electric Power Company (TEP) as
well as Salt River Project [This deregulation had to be through the legislature] (“A
Brief”).
Instead of a lump-sum electricity bill, after deregulation, consumer electricity bills are split into
four categories: generation, transmission, distribution and metering (Walls 1). Additionally, it is
important to note that not all aspects of the electricity market are deregulated. “The competitive
portion of consumers’ bills […] includes generation, metering and billing. Since companies to
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transmit and distribute electricity will share existing electricity lines, these two functions will
remain regulated” (1).
Customers within deregulated service areas can choose their electric service provider,
however as the ACC points out: “Although the Arizona Corporation Commission has granted
certificates to several providers, none of these providers are offering competitive residential or
small commercial service in Arizona yet. So for all practical purposes, consumers do not yet
have a choice of providers” (“Frequently Asked Questions”). Non-utility electricity service
providers, or merchant generators, are privately owned electrical service providers that do not
provide electrical services to an intended service area; rather they provide electricity to the
wholesale market and are not tied down to a specific service area or state (Mundell). Merchant
generators in Arizona can generate electricity intended for use by customers in other states.
Given Arizona’s water scarcity a dilemma arises: since merchant generators will, by proxy,
transmit thousands of acre-feet of Arizona’s water per year to other states, what benefit does this
provide Arizona?
Of the twenty proposed power plants since 1998, fourteen proposals were from merchant
generators (one of these twenty power plants was proposed for tribal lands and was not subject to
the ACC's jurisdiction) (State of Arizona). Currently, the operational merchant power plants
contribute 15% to 20% of Arizona’s annual electrical generation and the electricity generated at
these power plants, for the most part, stays in state due insufficient transmission capacity (EIA).
However due to uncertainty and a lack of data, it cannot be distinguished how much of this
electricity generated in Arizona is transmitted out of state. While it is important to know how
much of Arizona’s water is being used to generate electricity for out-of-state customers, it cannot
be overlooked that a percentage of Arizona’s power is generated in other states using their water,
labor and natural resources, shown by Table 1. With fourteen new merchant power plants
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coming online, this may change. Since merchant generators are required to offer Arizona a first
right of refusal (Mundell), the trend in the near future may be that Arizona electric utilities will
relinquish their ownership of out-of-state power plants opting to purchase the capacity of in-
state merchant power plants instead. This trend may already have started with APS’s purchase
of the Redhawk and Sundance power plants, which were initially proposed and built by merchant
generators (“APS :: Power Plants – Generation”).
Table 1. Sources of Electricity for Major Arizona Electric Utilities Utility Total Capacity (MW) Non AZ Capacity (MW) Percent
SRP 5793 528 9.11 APS 6575 782 11.89 TEP 2194 622 28.35
Arizona 14562 1932 13.27 *Data gathered from SRP, APS and TEP websites
The Power Plant Approval Process
For a power plant to be built, the application must pass through a two-step approval
process. The first step in this process is approval by the Arizona Power Plant and Line Stitng
Committee (LSC), which grants a Certificate of Environmental Compatibility (CEC) (Mundell).
After this step, the application is heard by the ACC, which then makes the final decision on the
fate of the proposed power plant. This final decision can be to accept the LSC’s decision as is,
modify it, or reject it. However, it should be noted that even if the LSC does grant a CEC to a
proposed power plant, the ACC could deny the power plant outright due to environmental or
other concerns. For example, according to Tom Wray the lead developer of the Toltec Power
Plant, the ACC denied the Toltec Generating Station in large part due to proximity to the
Ironwood National Monument and visual impacts (Wray). If the ACC decides to accept the CEC
as is, or modify it, there may be stipulations put onto the application that the applicant must
adhere to in order to build the proposed plant. Utilities and merchant generators have five years
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to commence construction. Once this is done the CEC lasts in perpetuity, but if construction is
not commenced by this time the CEC becomes void (Wray).
The Arizona Power Plant and Line Siting Committee Application Review
The LSC is charged with the duty to resolve “all matters concerning the location of
electric generating plants and transmission lines in a single proceeding to which access […] [is]
open to interested and affected individuals, groups, county and municipal governments and other
public bodies to participate in these decisions” (Laws 1971, Ch. 67, § 1). This committee is
composed of representatives from various state governmental offices and the public. The
members of the LSC are as follows:
1. State attorney general or the attorney general's designee. 2. Director of environmental quality or the director's designee. 3. Director of water resources or the director's designee. 4. Director of the energy office of the department of commerce or the director's designee. 5. Chairman of the Arizona corporation commission or the chairman's designee. 6. Six members appointed by the commission to serve for a term of two years of which three members shall represent the public, one member shall represent incorporated cities and towns, one member shall represent counties and one member shall be actively engaged in agriculture. (ARS 40-3601.01).
Of these members, the attorney general’s designee is always the chairperson of the LSC (ARS
40-3601.01).
The LSC application must detail “the proposed type of facilities and description of the
site, including the areas of jurisdiction affected and the estimated cost of the proposed facilities
and site.” (ARS 40-3601.03). Ninety days before a application is filed the following information
must be submitted in the form of a ten-year plan: the size of the proposed plant; the purpose of
the proposed plant; the expected operation date; the average maximum power output of the
proposed plant in megawatts; the expected capacity factor for each pant; the type of fuel to be
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used by a proposed plant; and technical reports detailing the power flow and stability, the
proposed plant’s effect on the Arizona electric transmission system, and analysis and basis for
serving customer load growth (ARS 40-360.02). Notably, applicants are not required to disclose
water demand or water sources.
When granting a CEC the LSC must deliberate upon a number of factors. These factors,
listed in ARS 40-360.06, are as follows:
1. Existing plans of the state, local government and private entities for other developments at or in the vicinity of the proposed site. 2. Fish, wildlife and plant life and associated forms of life upon which they are dependent. 3. Noise emission levels and interference with communication signals. 4. The proposed availability of the site to the public for recreational purposes, consistent with safety considerations and regulations. 5. Existing scenic areas, historic sites and structures or archaeological sites at or in the vicinity of the proposed site. 6. The total environment of the area. 7. The technical practicability of achieving a proposed objective and the previous experience with equipment and methods available for achieving a proposed objective. 8. The estimated cost of the facilities and site as proposed by the applicant and the estimated cost of the facilities and site as recommended by the committee, recognizing that any significant increase in costs represents a potential increase in the cost of electric energy to the customers or the applicant. 9. Any additional factors which require consideration under applicable federal and state laws pertaining to any such site.
Other factors that the LSC considers during its deliberation of an application are “areas of
unique biological wealth”, areas inhabited by rare and endangered species, and compliance with
existing air and water pollution control standards (ARS 40-360.06). While there are factors such
as the “total environment of the area” and other environmental factors, the LSC cannot deny a
CEC due to constraints on water resources imposed by the proposed plant. However, if the
proposed power plant falls within an active management area (AMA) the power plant must
adhere to the water regulations placed upon the AMA by its management plan (ARS 40-360.13).
Constraints placed on water resources imposed by the proposed plant only become a factor in the
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deliberation process if these constraints impact one of the deciding factors or if the proposed
plant is located within an AMA. Water use is not an explicit concern of the LSC.
An outright denial of a CEC based solely on substantial water use is not legal (Mundell).
However, the LSC can impose stipulations while approving a CEC, which set regulations for
water use and source. Many CEC applications are granted approval on the condition that the
applicant performs certain tasks. These tasks often include mandatory groundwater monitoring
programs, land subsidence monitoring programs, entering into groundwater impact mitigation
trust funds and performing numerous other community service oriented tasks (Arizona
Corporation Committee Decisions). These stipulations placed upon a specific power project by
the LSC are the closest form of regulating or mandating a proposed power plant’s water usage.
It seems foolhardy that in such a water scarce state, the LSC, which grants approval of a
Certificate of Environmental Compatibility, is not required to consider a proposed plant’s impact
on existing water resources. While some proposed power plants do use CAP water, many
proposed power plants rely on groundwater as the main source of cooling and process water
(State of Arizona). Consequently, power plants proposed outside of an AMA, using primarily
groundwater, do not have to prove that there will be an adequate water source for the power plant
during its operational life. Since the goal of a proposed power plant is to provide a reliable
source of electricity to consumers, it is reasonable to request that the applicant should have to
prove an adequate water supply exists for a power plant during its operational lifetime. A
thermoelectric plant requires large volumes of water to produce electricity (Wray). Therefore, if
an applicant has to prove that a plant will have adequate water supplies (including a backup
water supply in case of prolonged regional drought) over its operational lifetime this ensures that
the plant will be able to provide reliable, black-out free electricity for consumers even during
times of drought.
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Due to the CAP’s junior status on the Colorado River, proving an adequate supply of
water for electrical generation is especially important if a water shortage were to be declared on
the Colorado River. While this may entail the pumping of groundwater until normal river flows
return, this ensures that CAP water dependent power plants are able to generate electricity during
times of drought thereby reducing the risk of drought-induced black outs and avoiding the ethical
issue of power plant water needs superseding human water needs in times of extreme scarcity.
Arizona Corporation Commission Application Review
After the LSC’s decision, the application goes to the ACC for further deliberation and a
final ruling. The ACC is not required to review an application in regards to a statutorily required
list, instead the ACC bases its decision on public testimony by interested parties, the LSC’s
recommendation, and any other factors the ACC deems necessary (Mundell). Therefore, the
ACC can consider the impact that a proposed power plant will have on an area’s water resources.
In regards to groundwater use, the rule of thumb that Corporation Commissioner William
Mundell adheres to is that a proposed power plant’s groundwater consumption ought to be less
than the existing land use’s groundwater consumption (Mundell). Water conservation is inherent
to this approach in power plant approval, if previous land uses exist, as seen in ACC Decision
#63232. In this decision, an existing 15,000 af/yr agricultural water right was converted into an
8,000 af/yr Type I industrial groundwater right for use at the Mesquite Generating Station.
Therefore, the Mesquite Generating Station, nominally, will result in the conservation of 7,000
af/yr of groundwater. However, this approach does not mandate a set water conservation goal or
seek to have power plants use primarily non-potable water. It simply seeks to have the new land
use’s groundwater demand be less than the groundwater demand of previous land uses.
Unfortunately, if a prior land use’s water policy was the planned depletion of groundwater, the
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rule of thumb does not seek to rectify or actively remediate past instances of unsustainable water
policies.
Overall, according to Commissioner Mundell, the ACC seeks to ensure that new power
plants use as little groundwater as possible and new power plants use renewable sources of
water, such as CAP deliveries and reclaimed or recycled water, when available. This statement
carries precedence.
• ACC Decision #61582, the Desert Basin power plant will use reclaimed wastewater and water from a local plant with CAP allocations.
• ACC Decision #62324, the Red Hawk power plant will use 90% recycled wastewater from the Palo Verde Nuclear Generating Station, and less than 1,000 af/yr of groundwater.
• ACC Decision #65654, the Harquahala power plant will use CAP surface water with a ground water backup.
• ACC Decision #62989, the Kyrene power plant expansion will use SRP surface water and City of Tempe effluent.
• ACC Decision #63611, the Santan power plant will use City of Gilbert SRP and CAP surface water, or a groundwater backup.
• ACC Decision #63863, the Sundance Energy Project will use CAP surface water, or a new groundwater well, or a combination of both
• ACC Decision #66196, the Wellton-Mohawk Generating Facility will use Colorado River surface water
• ACC Decision #64717, the Arlington power plant expansion will use groundwater but purchase the amount used from the CAP to recharge into an endangered aquifer. (Source: Power Plant Proposed for Arizona since 1998)
The shift towards minimized groundwater use and the endorsement of renewable water
use ensures lessened environmental impacts on the surrounding areas. However, in the instance
of CAP water use it creates the ethical choice of providing water for human consumption or
water for power. Furthermore, due to location many proposed power plants do not have access
to renewable sources of water and consequently cannot replace groundwater with renewable
water without a fundamental change to the plant’s design.
For proposed power plants within AMAs, or areas where CAP water is accessible,
groundwater is not needed as a water source. However, this approach is biased toward
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metropolitan areas and provides those residents the assurance that power generation will not
result in power plant induced overdraft. If the proposed area for a power plant has no access to
CAP water or other renewable sources, it must fulfill its needs with groundwater, or, if available,
surface water from a local river or stream. However, this too places stress on whether water
should be used for human consumption or to generate power. Furthermore, power plants and
area residents utilizing the same groundwater source can cause rapid depletion and subsequent
environmental problems. Therefore, water conservation practices ought to be incorporated into
the design of proposed power plants, regardless of the availability of renewable sources, to
reduce instances where water for power generation supersedes water for human consumptive use
and to reduce the impact of power plants on water resources.
Dry-Cooled Power Plants
Traditionally, fossil fuel power plants are cooled using a wet cooling system, which is
essentially a large evaporative cooler (Wray). In this process, water that has been transformed
into steam by the combustion of fossil fuels circulates through a cooling tower in order to
condense back into water and then recirculates through the power plant. In contrast, dry cooled
power plants do not have large cooling towers; rather they utilize large air-cooled radiators to
condense steam back to water (Wray). However, for a radiator to do this it has to be very large.
Dry cooled power plants require large radiators housed in large structures to cool water, a very
noisy process with a huge visual impacts (Wray). Unfortunately, according to Wray “people
don’t want to see it.” Therefore, a power plant may employ several crucial water conservation
techniques, if it is large and ugly it will not garner public support.
According to the Arizona Water Resource, dry cooled power plants have the potential to
demand 90% less water during the cooling process (“Dry”). Typically, closed loop wet-cooling
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systems, which are the most water efficient wet cooled power plants, require 200-250 gallons of
water per MWh generated (“PIER Project”). Therefore, a 1000 MW closed-loop wet cooled
power plant operating at full capacity water demands 6,050 af/yr annually. The same plant if it
were dry cooled would demand tenfold less water. Clearly, dry cooling systems have huge
potential in Arizona. Unfortunately, the reduction in water demand comes at a price: dry cooling
technology is expensive, power generation is less efficient and there is an increase in parasitic
load, or the consumption of power plant generated power by a power plant (Wray). This does
not mean that dry cooled power plants are not viable alternatives in Arizona, but it does mean
that utilities and merchant generators will most likely not propose to build such plants because of
the tradeoff of between costs incurred and benefits accrued and since there is no cost to using
excessive water.
In rural areas, where proposed power plants use mostly groundwater, dry cooled power
plants have the most potential. Dry cooled plants conserve water for municipal needs, avoiding
situations where municipalities and power plants vie for, or deplete, the same water resource.
Ultimately, in such areas this decision is an environmental justice issue. While the water used in
wet-cooling systems may be the best economical use of the water, it potentially places electrical
generation above the human need for water. Furthermore, the reduction in water reasonably
ensures that there will be a reliable water source for electrical generation over the plant’s
operational life. While the plant may produce power less efficiently, the consumer is protected
against rate spikes due to water scarcity during times of drought.
The topic of dry cooled power plants is especially germane in light of the 20 proposed
power plants over the last decade: there are no dry-cooled power plants in Arizona. The issues
surrounding electrical generating efficiency are valid, but many other western states, including
Mexico, already have operational dry-cooled power plants:
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dry-cooled power plants are located in Nevada, parts of Texas and Northern Mexico, in
areas without access to water supplies for a cooling system. On a 110° F day, these plants
accept an energy production penalty of approximately five percent overall (including
turbine and steam cycles), compared to a plant equipped with a wet-cooling system
(“Dry”).
A five percent reduction in electrical generation and a large building is a small concession
compared to 90% reduction in water demand and consumption. This five percent reduction
occurs when electricity demand peaks in Arizona in the months June, July, August and
September, however, which may create supply problems (Wray). However, this does not
preclude dry-cooled plants as reliable sources of electricity. It means that dry-cooled power
plants are ideal for supplementary power production or must be “over built” to recoup lost net
generation (Wray).
Hybrid wet/dry cooling systems do exist. These systems utilize wet cooling only when
the ambient temperature is above the 85-90° F thus avoiding the 5% loss in energy production
that plague dry cooled power plants above this threshold (“Dry”). These systems do not suffer
from production loss during peak summer usage and conserve substantial amounts of water
during the fall, and winter and parts of spring. However, despite being the middle-of-the-road
option—offering both full operation during peak summer hours and conserving water in off
hours—there has never been an application for this type of power plant in Arizona
Dry-Cooling and the La Paz Generating Facility
Although there are no operational dry cooled power plants in Arizona, dry cooling has
been explored as an option by the ACC on merchant power plant applications. Allegheny
Energy’s proposed La Paz generator could have been the first dry-cooled power plant in Arizona,
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but the Corporation Commissioners voted down three dry cooling amendments to the La Paz
application introduced by then Corporation Commission Chairman William Mundell (Mundell).
Subsequently Mundell did not approve the La Paz generating facility’s CEC, however the
application still received a majority vote. The power plant, which is yet to be built, is a 1,080
MW generating station reliant on groundwater (Mundell). The amount of groundwater that
power plant will demand is uncertain as there is no mention of water demand in the CEC (ACC
Decision #64718). However, Allegheny Energy supply is required to retire and recharge
100,000 acre-feet of water, which may give a proxy for water demand (ACC Decision #64718).
The La Paz power plant further complicates the issue of dry cooling in Arizona since La
Paz County is very rural. The power capacity of this facility far exceeds La Paz County’s
electricity demand and, due to its proximity to the Palo Verde-Devers #1 transmission line (ACC
Decision #65476), the question arises, “How much of this power is intended for Arizona’s use?”
To safe guard against this, the ACC typically requires that merchant generators give Arizona
utilities and ratepayers the right of first refusal before merchant generators can sell electricity on
the wholesale market (Mundell). But only a few regions in Arizona have deregulated electricity
and with so many other new power plants, La Paz power may be unneeded in Arizona. Except
for APS who services the inhabited areas of La Paz County and neighboring parts of Yavapai,
Maricopa and Yuma Counties, there are no deregulated Arizona electricity markets nearby
(http://www.aps.com). The remaining deregulated markets are hundreds of miles away and
much of Arizona’s intra-state transmission is under capacity (Mundell, Wray). Furthermore,
nearby transmission lines already transmit electricity generated at the Palo Verde Nuclear
Generating Station to California and wholesale markets. Therefore, it is reasonable to assume
that much of the power at the La Paz facility would be sold on the wholesale market at the
expense of Arizona’s water resources.
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It is illegal to deny electricity sales to the wholesale market, so no power plant in Arizona
can generate solely for Arizona’s electricity demands (Mundell). But the effect that merchant
generators, intending to sell electricity on the wholesale market, have on Arizona’s water
resources should be mitigated to provide more water to other economic sectors in Arizona or to
protect sensitive environmental areas.
Additionally, since the population has grown so rapidly in Arizona during a prolonged
drought and since the CAP has junior status on the Colorado River, this policy in effect would
help ensure adequate water supplies for Arizona and power generation. Of the 19 proposed
power plants, the overwhelming majority utilize groundwater as the primary water source, as
shown by Figure 3. Therefore, the adoption of dry cooled power plants, or hybrid wet/dry
power plants, would reduce the need for land subsidence and groundwater monitoring programs
and translate into huge reductions in groundwater use. If within an AMA, the Arizona Water
Banking Authority could bank this water. Overall, these power plants would reduce the
depletion of groundwater resources attributable to power plants, reduce land subsidence, reduce
wastewater and help mitigate its impacts on the environment, and provide Arizona the ability to
diversify the use of scarce water resources.
The Big Sandy
The Big Sandy power
plant, a 720 MW generating
facility that would have required
3,200 af/yr, proposed by
Caithness Big Sandy LLC
21
(Caithness), was the first power plant to be denied a CEC in Arizona history (Mundell). This
landmark decision took place because there was question about whether the power plant would
negatively affect the habitat of the Southwestern Desert Willow Flycatcher, an endangered
species (Mundell). Interestingly, the power plant’s impact on the Flycatcher was not due to air
emissions, or the physical location of the plant, rather it was due to the plant’s reliance on
groundwater and the effect it would have on the Big Sandy River, the Flycatchers habitat
(Mundell). Drawdown of the Big Sandy due to nearby groundwater pumping would have
impaired the Flycatcher’s habitat, thus precluding the application from fulfilling the requirements
set forth in the LSC’s mandate. Despite the endangered species, Caithness was willing to go to
extreme lengths to protect the riparian habitat for the Flycatcher (ACC Decision #64217). But
the problem with the Big Sandy application was more than the Flycatcher; the Big Sandy
application carried with it the stigma of transforming Arizona into a power farm (Mundell).
The intent of the Caithness’ Big Sandy power plant was clear in the written arguments for
CEC approval:
What is better for Arizona: a state-of-the-art electric generating facility with
water use strictly regulated to ensure that flow in the nearby Big Sandy River and
associated riparian habitat is protected – or some other, unregulated agricultural or
industrial user of the same land and water that could destroy this area without
consequence? […] The answer is clear: protection of riparian habitat, clean and efficient
electric power, and economic benefit to a depressed community (ACC Decision #64217).
Caithness, a New York based company, makes a simple charge: if the ACC wants economic
recovery in the Wikieup area, they must approve the Big Sandy power plant. The influx of
workers into the area for the power plant's construction, operation and maintenance would
provide economic stimulus to the town’s service economy, but this stimulus would only be
22
temporary. This economic stimulus for the community cited by Caithness would, most likely,
exist only for the operational lifetime of a power plant. While this is not necessarily a bad
outcome—40 years of economic stimulus—what would become of Wikieup after the power
plant closes? After the plant’s lifetime is complete, the jobs would leave, along with the area’s
economic stimulus. Like the mining towns of the old west before it, Wikieup would have been
transformed into a boomtown with no long lasting economic stimulus.
Furthermore, massive infrastructure upgrades would be needed in the Wikieup area to
accommodate the influx of population. However, since this would take years of construction and
millions of dollars in investments, power plant workers would most likely live in nearby cities
such as Wickenburg and Kingman. Both these cities offer the conveniences of living in a
moderately sized city—such as hospitals and high schools—and a manageable 60 to 90 minute
commute. While some workers may want to live in Wikieup, the majority would probably live
in nearby cities and commute.
As for the power plant’s effects on the surrounding environment, Caithness claimed the
power plant would actually enhance both riparian and Flycatcher habitat (ACC Decision
#64217). To further mitigate the impact of the power plant, construction would only take place
at certain times of the day and during certain parts of seasons to abate effects on wildlife and
vegetation (ACC Decision #64217). Furthermore, Caithness performed conservative
groundwater models at 4,850 af/yr—instead of the estimated use of 3,200 af/yr—to analyze
potential drawdown due to groundwater pumping. While the results of this model found that
drawdown would be less 1-foot per year (ACC Decision #64217), cumulatively over the lifetime
of the plant (assuming a 40 to 50 year operational life) drawdown in the area could be as much as
40 to 50 feet. It is unknown how this would have affected sensitive riparian areas and Flycatcher
habitat. Furthermore, this model does not take into account the projected growth of Wikieup as a
23
result from the power plant. It is reasonable to assume that if Caithness claimed that the Big
Sandy plant would revive the Wikieup economy, there would be concomitant growth in
population and water demand in Wikieup. The sum of the increased water demand would most
likely increase the rate of drawdown near the Big Sandy beyond the 1 foot per year estimate and
thus further endanger riparian and Flycatcher habitat.
Endangered species and riparian areas were not the only issues complicating the Big
Sandy power plant application. While the Flycatcher ultimately killed the application, the
application carried implications of Arizona turning into a power farm for the Southwest. As
stated before, water is scarce in Arizona and rapid population growth increases demands for
electricity and water. Caithness claimed that the Big Sandy power plant would help Arizona
meet its future power demand, but is this true? Commissioner Mundell felt that it was
questionable how much of Big Sandy’s power would actually go towards meeting Arizona’s
needs (Mundell). The Big Sandy plant would have been located near the transmission lines that
once connected the Mohave Generating Station in Laughlin, NV to the Phoenix metropolitan
area (ACC Decision #64217). In other words, there would be direct access to the wholesale
market while Arizona power needs are, by and large, met by existing merchant generators.
Arizona utilities and consumers would have had the right of first refusal, but with 11 power
plants already approved in the previous three years the necessity of the Big Sandy power plant
for Arizona users comes into question. At the time of application, other power plant applications
were pending in much less sensitive areas that would provide Arizona with a more direct benefit
than the Big Sandy power plant.
Instead, the Big Sandy power plant sought to capitalize on cheap groundwater in a
biologically sensitive area with easy transmission to the Western wholesale electricity market.
Furthermore, the remedial actions proposed by Caithness, which would be to convert nearby
24
stream flow rights to in-stream water rights in order to dump treated wastewater back into the
river only accounted for a fraction of the water the power plant would pump annually (ACC
Decision #64217). In this case, the power plant’s effect on surrounding water resources became
a contentious issue because it was uncertain as to the extent to which endangered species habitat
would be impaired. Regardless of the many concerns surrounding the Big Sandy power plant
proposal, without the Flycatcher habitat the Big Sandy power plant would have had no legal
hurdles.
Conclusion
The ACC and LSC do not have to consider water consumption while deliberating the fate
of a power plant application. This approach to approving power plants is shortsighted because it
does not require the approving bodies to take into account alternative uses for the water that
would otherwise be used for electrical generation. This places no impetus on the utilities and
merchant generators to adopt more water efficient technologies because it is not cost effective.
Since water is such a limiting factor in Arizona, it does not seem wise that power plants are not
as water efficient as possible, since Arizona is dependent on abundant electricity to maintain and
sustain growth. However, it is illegal to deny interstate electricity flow and it is hypocritical of
Arizona to slight power farming since a percentage of Arizona’s electricity is generated out of
state using another state’s water, labor and clean air. Furthermore, many power plants are
natural gas fired and no such resources are available in Arizona (Wray). Therefore, new policies
must balance electrical generation for in-state and out-of-sate purposes while minding Arizona’s
water resources and Arizona’s dependency on other states for electrical power and natural gas.
Technologies such as dry cooling systems and hybrid wet/dry cooling systems ought to
be the norm for new power plants in Arizona. These technologies hold the potential to reduce
25
power plant water demand for cooling ten-fold, or even eliminating demand altogether. These
power plants can generate electricity economically and reliably while freeing up water resources
for other economic uses, such as water banking, environmental uses and human needs. These
power plants pose no threat to cause groundwater depletion and land-subsidence in areas where
no renewable water resources are available. Furthermore, since many new power plants in
Arizona are merchant generators that sell electricity to the wholesale market, dry-cooled and
hybrid wet/dry cooled power plants ensure the economic benefit of interstate trade, while
allowing Arizona to do more with its water resources in-state.
The ACC should require proposed power plants to prove an adequate, reliable supply of
water for a plant’s operational life. However, since the ACC does not have the authority to
regulate water use outright such a policy is unlikely. Therefore, the ACC or the Arizona
Legislature should adopt policies that state a power plant's water demand should be less than the
water demands of previous land uses due its to de facto water conservation.
Implementing these two policies in concert will provide many benefits to ratepayers. (1)
Alternative cooling technologies will protect electrical generation against drought and shortages
declared on the Colorado River. (2) An assured water supply ensures that power generators will
be able to survive droughts blackout free and that electrical generators obtain water from
renewable sources, if available. (3) If renewable water sources are not available for electrical
generation the least groundwater intensive method of power generation is implemented. (4)
Jurisdictions avoid problems resulting from groundwater depletion and land subsidence due to a
power plant’s reliance on unsustainable amounts of groundwater. (5) These policies avoid the
dilemma of water for power superseding water for human needs.
In Arizona, growth, electricity and water resources are inextricably tied. However, the
relationships between these three are known and can be equitably balanced through proactive
26
land, electricity and water policies. Water is by far the most limiting factor in Arizona and it is
needed for human consumptive uses as well as electrical generation. Conversely, electricity
poses the problem of limiting water availability. To balance these three factors, power plants
must generate electricity in the most water efficient manner possible to provide for continued and
increased municipal and industrial water and electrical demand. This will have the effect of
liberating thousands of acre-feet per year to be used for municipal, industrial and environmental
uses while still allowing room for growth.
27
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