APS 2013 Annual Report Download - page 25

Table of Contents
deadline litigation filed a consent decree with the court obligating EPA to make a final decision by December 2014 whether or not to adopt the Subtitle D option
for CCR. The consent decree does not foreclose EPA from adopting the Subtitle C option. We cannot currently predict the timing or content of EPA’s final
rule or whether this action will have a material adverse impact on our financial position, results of operations, or cash flows.
Effluent Limitation Guidelines. On April 19, 2013, EPA proposed revised effluent limitation guidelines establishing technology-based wastewater
discharge limitations for fossil-fired electric generating units. EPA’s proposal offers numerous options (four of which are “preferred alternatives”) that target
metals and other pollutants in wastewater streams originating from fly ash and bottom ash handling activities, scrubber activities, and non-chemical metal
cleaning wastes operations. The preferred alternatives differ with respect to the scope of requirements that would be applicable to existing discharges of
pollutants found in wastestreams generated at existing power plants. All four alternatives would establish a “zero discharge” effluent limit for all pollutants in
fly ash transport water. However, requirements governing bottom ash transport water differ depending on which alternative EPA ultimately chooses and could
range from effluent limits based on Best Available Technology Economically Achievable to “zero discharge” effluent limits. Depending on which alternative
EPA finalizes, Four Corners may be required to change equipment and operating practices affecting boilers and ash handling systems, as well as change its
waste disposal techniques. We cannot currently predict the shape of EPA’s final rule or whether this action will have a material adverse impact on our
financial position, results of operations, or cash flows. EPA is currently subject to a consent decree deadline to finalize the revised guidelines by May 2014,
although it is in negotiations to obtain an extension of time.
Ozone National Ambient Air Quality Standards. In March 2008, EPA adopted new, more stringent eight-hour ozone standards, known as
national ambient air quality standards (“NAAQS”). In January 2010, EPA proposed to adopt even more stringent eight-hour ozone NAAQS. However, the
following year, President Obama decided to withdraw EPA’s revised ozone standards until completion of the next review. EPA had a March 2013 deadline to
complete its review of the 2008 ozone NAAQS, but failed to meet it. Although EPA has not announced a timeline for its review, it may release new proposed
standards in the second half of 2014. As ozone standards become more stringent, our fossil generation units may come under increasing pressure to reduce
emissions of nitrogen oxides and volatile organic compounds and/or to generate emission offsets for new projects or facility expansions located in ozone
nonattainment areas. At this time, APS is unable to predict the timing of the final standards or what impact the adoption of these standards may have on its
financial position, results of operations, or cash flows.
New Source Review. On April 6, 2009, APS received a request from EPA under Section 114 of the Clean Air Act seeking detailed information
regarding projects at and operations of Four Corners. This request is part of an enforcement initiative that EPA has undertaken under the Clean Air Act. EPA
has taken the position that many utilities have made certain physical or operational changes at their plants that should have triggered additional regulatory
requirements under the NSR provisions of the Clean Air Act. Other electric utilities have received and responded to similar Section 114 requests, and several
of them have been the subject of notices of violation and lawsuits by EPA. APS responded to EPA’s request in August 2009 and is currently unable to predict
any resulting actions the EPA may take, including any potential litigation.
Clean Air Act Citizen Lawsuit. On October 4, 2011, Earthjustice, on behalf of several environmental non-governmental organizations, filed a
lawsuit in the United States District Court for the District of New
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