Water-Energy Nexus in Arizona

An interesting article in The Arizona Republic begins with the following ominous quote from Sharon Megdal, the Director of the University of Arizona’s Water Resources Research Center: “People say water will get more expensive in the future, but what they mean is it’s going to get more expensive to provide it, to move it, to treat it. Energy costs are going to be huge, and I don’t think people understand it.”

The article, headlined Cleaning air risks costlier Arizona water, is apparently spurred by the EPA’s proposal a few months ago to require the Navajo Generating Station to install air scrubbing equipment to reduce toxic air emissions. The tone of the article seems to propagate the age old meme that enviros are forcing costly and unnecessary regulations to protect nature at the expense of people. Perhaps I'm just biased, but that was the sense I got.

For years the power plant – identified by the EPA as the nation’s third largest emitter of nitrogen oxides - has been bellowing pollution while providing cheap electricity to the Central Arizona Project Canal (CAP), which provides imported water to Arizona's populations centers in Phoenix and Tucson.

CAP water is pumped 3,000 feet uphill from the Colorado River and thanks to subsidized electricity from the Navajo Generating Station, Phoenix and Tucson have been able to quench the thirsts of their growing populations and green lawns alike in the once desolate desert region at a relatively low cost. As the article describes, CAP is a pretty remarkable work of engineering and an incredible user of energy:

The Navajo Generating Station was built to provide a power supply for the canal, which snakes 336 miles from the Colorado River near Lake Havasu City to Phoenix and Tucson. The power feeds a series of pumps that move 1.5 million acre-feet of water a year - almost 500 billion gallons - as much as half the water used by cities and farms in Maricopa, Pinal and Pima counties.

The canal must lift the water a total of almost 3,000 feet in elevation, a task that consumes 2.8 million megawatt-hours of electricity, enough to supply about 200,000 homes.

That makes the CAP the largest single electricity user in Arizona, and it raises the stakes if Navajo's operations are put at risk.

The article notes that under a worst case scenario, the price of water in Phoenix and Tucson could quadruple. A number of harrowing quotes from Arizona water managers are included to make the case that implementing the EPA’s clean air regulations would be detrimental to communities in Arizona:

"We do not have an alternative," said Susan Bitter Smith, president of the elected board that oversees the canal. "This is a survival issue for us. We need the EPA to work with us in a rational, logical way that takes into consideration all of the consequences."
…
Phoenix and other cities have written letters urging the EPA to consider the effects of its proposal beyond air quality, to look at the potential for higher water costs.

"We're just asking them to weigh the equities as they look at protecting the visibility around the plant," said Tom Buschatzke, water adviser for the city of Phoenix. "We're trying to make EPA understand the importance of the issue, the way regional and local economies are suffering right now."

The CAP Canal accounts for 43 percent of Phoenix's water supply, so the city probably couldn't absorb the higher charges, Buschatzke said, meaning at least some of the cost would be passed down to ratepayers.

The long-term effects could grow worse. Phoenix and other cities rely on the state Water Banking Authority to help store water as a hedge against future droughts. The Legislature already has slashed the bank's budget, and if the bank can't buy water, the cities would lose that backup supply.

Higher costs also would affect agricultural users, who now pay below-market prices for CAP water as part of a deal that will make their supplies available to cities by 2030

Clearly, there would be costs to implementing the new rules but I believe these costs are greatly exaggerated in this article. For one, conservation, efficiency and water reuse aren’t mentioned anywhere in the article as strategies to help hedge against the costs of electricity rate increases. I’m not suggesting that conservation is the silver bullet to Arizona’s water woes, but you’d think it would be mentioned as a cost-effective alternative to CAP water - especially if costs skyrocket as high as the article warns.

Furthermore, just because much of Arizona was built on the promise of cheap water, doesn’t mean that cheap water will be around for ever; even if the plant upgrades aren’t required, other factors could limit supplies of CAP water or raise their costs. Remember climate change? A price on carbon? Recent studies have shown that flows in the Colorado River are expected to decline so there is no guarantee that the same amount of CAP water will be available - especially if power plants like the Navajo Generating Station continue spewing greenhouse gas emissions unabated. Plus, if climate legislation passes the price of electricity from coal would undoubtedly go up. Arizona is a great location for developing solar power, so why not take the capital investments that would go into cleaning up the NGS and put them into renewable energy?

The article does mention the implications of pending climate legislation and it hints at the prospect of using alternative sources of energy to reduce pollution and save water:

Environmental groups also say the EPA plan is just the first of a one-two punch the power plant will likely face in the coming years. If Congress passes a climate-change bill that includes a cap-and-trade plan to reduce pollutants, Navajo will get hit with the equivalent of a carbon tax.

Clark and others say CAP should invest in alternative energy. Cover the canal with solar panels, for example, and connect them to the transmission lines that already supply the pumping stations along the route.

Covering the canal also would help reduce evaporation from the channel. CAP estimates that it loses about 16,000 acre-feet, or about 5 billion gallons, a year to canal evaporation.

So finally, after all the doom and gloom about expensive water we see that there really are alternatives to dirty, old water-guzzling coal-fired power plants. The amount of water required to cool the Navajo Generating Station, as well as the impairments to water quality in the region caused by the plant’s pollution, are externalities that don’t seem to get mentioned when discussing energy options. It's a shame that the article didn't further explore the benefits of powering the CAP project with renewable energy, which over it's lifetime might cost very little to operate and save precious water.

The one concern over the new regulations that resonates the most with me is the potential loss of jobs if the power plant closes, and the economic burden that would fall on nearby indigenous communities who mine the coal to fuel the Navajo Generating Station. While the article focuses on the jobs that would be lost if the power plant closes, there is no mention of the jobs that could be created from developing and maintaining a new clean energy infrastructure.

It will be interesting to see what happens with this situation. Hopefully demand-side water management and alternative energy and water supplies - not to mention the jobs that green investments can create - will be considered in any analysis that seeks to establish the costs and benefits of the EPA’s new regulations on Arizona’s citizens.

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