Lamar Repowering Project, Seeking Title V Air Permit from State Health Department

Lamar, Colorado – The Lamar Utilities Board and the Colorado Department of Public Health and Environment (CDPHE) have agreed to the terms of a Compliance Order to resolve all outstanding air quality permit violations at the Lamar Repowering Project, a coal-fired power plant operated by the Lamar Utilities Board on behalf of the Arkansas River Power Authority (ARPA). The Compliance Order spells out the environmental compliance criteria and operational requirements for the Lamar Plant to restart operations and lays out a plan to resolve the plant’s air quality permit violations.

The agreement comes after ARPA and the Lamar Utilities Board (LUB) suspended plant operations in December 2010. ARPA and LUB had identified and self-reported exceedences for nitrogen oxide, sulfur dioxide and particulates to CDPHE. In negotiating the Compliance Order, ARPA and the Lamar Utilities Board worked closely with CDPHE to provide necessary data and to address all air quality violations at the plant.

“Providing reliable power in an environmentally responsible manner is paramount to our operations,” said Bill Leung, general manager for ARPA. “Our boiler contractor is undertaking modifications and technical upgrades to our facility to ensure that, when restarted, the Lamar Repowering Project reliably, consistently generates electricity while keeping our air and water clean.”

The Lamar Utilities Board agreed to pay $86,000 as part of the consent order. The funds will likely be contributed to a project to benefit environmental projects in the region. The consent order notes the LUB’s extensive efforts to correct technical and design problems with the plan, as well as its good faith effort to comply with the permit and its full and prompt cooperation with CDPHE.

“We worked closely with the CDPHE throughout the whole process. We kept them informed on our continuing effort to bring the plant emissions into compliance, every step along the way,” said Rick Rigel, the Superintendent of LUB and the Project Manager. Plant operations are currently suspended while the LUB and the boiler manufacturer make engineering and design adjustments to the boiler in order to bring emissions into compliance. ARPA anticipates restarting the plant in a test phase in June of 2011.

ARPA recently released an information flyer explaining the financial aspects of the Lamar Repowering Projects cost in light of the plant shutdown:

“Mothballing” the plant would not improve ARPA’s financial situation; it would actually be detrimental. Members would be walking away from an $155 million investment and still have an obligation to repay the outstanding bonds over the next 30+years. Costs to restart the plant, once “mothballed” would be significant and permitting may be a challenging issue as well.

If ARPA were to dissolve, ARPA members would still be liable for the repayment of the principal and interest on the outstanding bonds to the bondholders with their revenues from the sale of electricity to their respective retail customers.

 

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