[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]




 
 EVAPORATING PROSPERITY: HOW FEDERAL ACTIONS ARE DRIVING UP WATER AND 
   POWER COSTS, THREATENING JOBS AND LEAVING ARIZONANS HIGH AND DRY

=======================================================================

                        OVERSIGHT FIELD HEARING

                               before the

                    SUBCOMMITTEE ON WATER AND POWER

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

               Monday, June 4, 2012, in Phoenix, Arizona

                               __________

                           Serial No. 112-115

                               __________

       Printed for the use of the Committee on Natural Resources



         Available via the World Wide Web: http://www.fdsys.gov
                                   or
          Committee address: http://naturalresources.house.gov



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                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
            EDWARD J. MARKEY, MA, Ranking Democratic Member

Don Young, AK                        Dale E. Kildee, MI
John J. Duncan, Jr., TN              Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F.H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush D. Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Mike Coffman, CO                     Jim Costa, CA
Tom McClintock, CA                   Dan Boren, OK
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Jeff Denham, CA                          CNMI
Dan Benishek, MI                     Martin Heinrich, NM
David Rivera, FL                     Ben Ray Lujan, NM
Jeff Duncan, SC                      Betty Sutton, OH
Scott R. Tipton, CO                  Niki Tsongas, MA
Paul A. Gosar, AZ                    Pedro R. Pierluisi, PR
Raul R. Labrador, ID                 John Garamendi, CA
Kristi L. Noem, SD                   Colleen W. Hanabusa, HI
Steve Southerland II, FL             Paul Tonko, NY
Bill Flores, TX                      Vacancy
Andy Harris, MD
Jeffrey M. Landry, LA
Jon Runyan, NJ
Bill Johnson, OH
Mark Amodei, NV

                       Todd Young, Chief of Staff
                      Lisa Pittman, Chief Counsel
               Jeffrey Duncan, Democratic Staff Director
                David Watkins, Democratic Chief Counsel
                                 ------                                

                    SUBCOMMITTEE ON WATER AND POWER

                      TOM McCLINTOCK, CA, Chairman
           GRACE F. NAPOLITANO, CA, Ranking Democratic Member

Louie Gohmert, TX                    Raul M. Grijalva, AZ
Jeff Denham, CA                      Jim Costa, CA
Scott R. Tipton, CO                  Ben Ray Lujan, NM
Paul A. Gosar, AZ                    John Garamendi, CA
Raul R. Labrador, ID                 Edward J. Markey, MA, ex officio
Kristi L. Noem, SD
Doc Hastings, WA, ex officio

                                 ------                                
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Monday, June 4, 2012.............................     1

Statement of Members:
    Gosar, Hon. Paul A., a Representative in Congress from the 
      State of Arizona...........................................     5
        Prepared statement of....................................     7
    McClintock, Hon. Tom, a Representative in Congress from the 
      State of California........................................     2
        Prepared statement of....................................     4
    Schweikert, Hon. David, a Representative in Congress from the 
      State of Arizona...........................................     8
        Prepared statement of....................................     9

Statement of Witnesses:
    Griffin, Hon. Gail, State Senator, Arizona State Senate, 
      Hereford, Arizona..........................................    16
        Prepared statement of....................................    18
    Groseta, P. Andrew, President, Arizona Cattle Growers' 
      Association, Cottonwood, Arizona...........................    33
        Prepared statement of....................................    35
    Horseherder, Nicole, Dine', To Nizhoni Ani, Black Mesa, 
      Arizona....................................................    27
        Prepared statement of....................................    29
    Jones, Tom, Chief Executive Officer, Grand Canyon State 
      Electric Cooperative Association, Inc., Tempe, Arizona.....    37
        Prepared statement of....................................    38
    Mendoza, Hon. Gregory, Governor, Gila River Indian Community, 
      Sacaton, Arizona...........................................    10
        Prepared statement of....................................    11
    Reeve, Hon. Amanda A., State Representative, District 6, 
      Arizona House of Representatives, Phoenix, Arizona.........    19
        Prepared statement of....................................    21
    Sullivan, John F., Associate General Manager & Chief 
      Resources Executive, Salt River Project Agricultural 
      Improvement and Power District, Phoenix, Arizona...........    42
        Prepared statement of....................................    44
    Von Gausig, Hon. Doug, Mayor, City of Clarkdale, Arizona.....    22
        Prepared statement of....................................    24

                                     



     OVERSIGHT FIELD HEARING IN PHOENIX, ARIZONA, ON ``EVAPORATING 
 PROSPERITY: HOW FEDERAL ACTIONS ARE DRIVING UP WATER AND POWER COSTS, 
         THREATENING JOBS AND LEAVING ARIZONANS HIGH AND DRY.''

                              ----------                              


                          Monday, June 4, 2012

                     U.S. House of Representatives

                    Subcommittee on Water and Power

                     Committee on Natural Resources

                            Phoenix, Arizona

                              ----------                              

    The Subcommittee met, pursuant to call, at 10 a.m., House 
Hearing Room 3, Arizona State Capitol, 1700 West Washington 
Street, Phoenix, Arizona, Hon. Tom McClintock [Chairman of the 
Subcommittee] presiding.
    Present: Representatives McClintock and Gosar.
    Also present: Representative Schweikert.
    Mr. McClintock. The House Subcommittee on Water and Power 
will come to order.
    Welcome to all of you. I am Congressman Tom McClintock of 
California. I am Chairman of the Water and Power Subcommittee. 
I have come to visit our Colorado River water. That's a joke.
    No, I actually----
    Mr. Schweikert. Did you notice the dead look?
    Mr. McClintock. Well, it is a little sore on our side of 
the border as well. But actually we were----
    Voice. The sound system, please, we can't hear you. Can you 
fix the sound system?
    Mr. McClintock. How is that?
    Voice. Yes.
    Mr. Schweikert. It was actually very funny what you missed.
    Mr. McClintock. But I am not going to repeat it for fear 
that I will get the same reaction.
    Actually, we are here at the request of Arizona Congressmen 
Paul Gosar, David Schweikert, and their Republican colleagues 
from Arizona. We are meeting here today on a hearing entitled 
``Evaporating Prosperity: How Federal Actions Are Driving Up 
Water and Power Costs, Threatening Jobs and Leaving Arizonans 
High and Dry.''
    I first ask unanimous consent that Mr. Schweikert be 
allowed to sit on the Subcommittee and participate in the 
hearing. Without objection?.
    Dr. Gosar. No objection.
    Mr. McClintock. So ordered.
    To begin today's hearing, I would like to defer to our 
distinguished colleague, Congressman Paul Gosar, for a few 
introductions.
    Dr. Gosar. First of all, I would like to thank the Honor 
Guard from Casa Grande from the VFW Post 1677 for their service 
to our country. This is an honor to have them here with us 
today.
    I would like to take a moment to introduce each of the 
members:
    First of all, Mr. Bill Zimmer, a Vietnam veteran, served 
from 1968 to 1969 and comes to us from the home of the U.S. 
Army TACOM Life Cycle Management Command in Warren, Michigan; 
Mr. Gary Erickson, a Vietnam War Marine Corps veteran who 
served from 1966 to 1967 and hails from the City of Lakes, 
Minneapolis, Minnesota; Mr. Bill Reed, Vietnam War Army veteran 
who served in 1968 during the Tet Offensive. He comes to us 
from Big Sky Country, Billings, Montana; and last but not 
least, Mr. Bradley Hazel, an Iraqi War Marine Corps veteran who 
served in Iraq from 2003, 2004, and 2005, and is a Purple Heart 
recipient. He is an Arizona guy from Wildcat Country in Tucson.
    Let me welcome all you distinguished guests.
    [An honor proceeding was held.]
    [whereupon, the Pledge of Allegiance was recited.]
    Mr. McClintock. Be seated. Thank you, Mr. Gosar.
    We will now begin with five-minute opening statements 
beginning with mine.

   STATEMENT OF THE HON. TOM McCLINTOCK, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. McClintock. Today's hearing, as I said, is convened at 
the request of Congressman Gosar and his Arizona colleagues to 
hear testimony on Federal policies that are causing increasing 
scarcity and skyrocketing prices of water and electricity in 
the southwestern United States.
    One aspect is a concerted effort from the left to close the 
Navajo Generating Station. Another is the memo by the Secretary 
of Energy that would force consumers to bear staggering rate 
increases to subsidize the Left's ideological fascination with 
wind and solar power. Yet another is Federal land management 
policies of benign neglect that are impeding water deliveries 
and causing uncontrolled overgrowth of our public resulting in 
catastrophic wildfires.
    The radical Left wants to close the coal-fired Navajo 
Generating Station and replace it with wind and solar power. 
Coal is one of the cheapest and most reliable forms of energy 
available to us while solar is the most expensive. Indeed, in 
more than 170 years since the invention of solar panels, we 
have not yet invented a more expensive way of producing 
electricity. That's why the Left wants to hide its true cost to 
consumers through their taxes and through other people's 
electricity bills.
    One of the Democratic witnesses invited today calls wind 
and solar reliable. In fact, at a moment's notice a passing 
cloud bank or sudden calm can drop generation to zero. 
Electricity grids collapse unless the amount of power put into 
the system constantly matches the amount drawn from it. So 
consumers end up paying to keep conventional plants at constant 
standby to replace the lost power at a moment's notice.
    Because of the low output of wind and solar and the 
distance the electricity must often be conveyed, existing AC 
transmission systems must be replaced with extremely expensive, 
special high-tension direct current lines to accommodate them.
    A generation ago, the objective of our Federal water and 
power policy could be summed up in a single word, abundance. 
This policy laid a foundation for the prosperity of the 
southwest and literally made Arizona bloom from the desert.
    But beginning in the 1970s, a radical and retrograde 
ideology began to seep into our public policy. It abandoned 
abundance as our objective and replaced it with the rationing 
of shortages.
    A few months ago, the Administration boasted that it would, 
quote, ``increase available water supply in the western United 
States by 730,000 acre-feet.'' But they weren't talking about 
increasing our water supplies, they were talking about reducing 
human consumption by that amount.
    In today's testimony, a Democratic witness touts negawatts, 
electricity we don't use, as if it added to our capacity. The 
future they are planning is one where families are encouraged, 
threatened, and, if need be, forced to reduce consumption 
through higher water and electricity bills, higher taxes and 
fines, and intrusive government regulations.
    Ironically, they see nothing wrong with spilling millions 
of gallons of water from the Glen Canyon Dam and sacrificing 
enough electricity to power a million homes a year to simulate 
spring floods. But they are aghast that a family might actually 
prefer a toilet that works or light bulbs that don't give them 
headaches.
    I find the future advocated by the environmental Left to be 
indescribably dreary and depressing. It is a future of 
increasingly severe government-induced shortages, higher and 
higher electricity and water prices, massive taxpayer subsidies 
to politically well connected companies, increasingly severe 
wildfires, and a permanently declining quality of life for our 
children, who will be required to stretch and ration every drop 
of water and every watt of electricity in their dimly lit, 
sweltering, and parched homes.
    I see a different future for our nation. I see an era of 
clean, cheap, and abundant electricity. I see great new 
reservoirs to store water in wet years to assure abundance in 
dry ones. I see a future in which families can enjoy the 
prosperity that abundant water and electricity provides, and 
the quality of life that comes from that prosperity. I see a 
nation whose children can look forward to a backyard garden, a 
family swimming pool, affordable air conditioning in the summer 
and heating in the winter, brightly lit homes and cities, and 
abundant and affordable groceries from America's agricultural 
cornucopia.
    These are two very different visions of America, and a 
choice must be made, not just by this Subcommittee or this 
Congress, but by the American people, over which vision guides 
our nation into the future.
    And with that, I will yield back my two seconds and 
recognize my colleague from Arizona, Mr. Gosar.
    [The prepared statement of Mr. McClintock follows:]

         Statement of The Honorable Tom McClintock, Chairman, 
                    Subcommittee on Water and Power

    Today's hearing is convened at the request of Congressman Paul 
Gosar and his Arizona colleagues to hear testimony on Federal policies 
that are causing increasing scarcity--and skyrocketing prices--of water 
and electricity in the Southwestern United States.
    One aspect is a concerted effort from the Left to close the Navajo 
Generating Station. Another is the memo by the Secretary of Energy that 
would force consumers to bear staggering rate increases to subsidize 
the Left's ideological fascination with wind and solar power. Yet 
another is federal land management policies of benign neglect that are 
impeding water deliveries and causing uncontrolled overgrowth of our 
public lands resulting in catastrophic wild fires.
    The radical left wants to close the coal-fired Navajo Generating 
Station and replace it with wind and solar power. Coal is one of the 
cheapest and most reliable forms of energy available to us while solar 
is the most expensive. Indeed, in the more than 170 years since the 
invention of solar panels, we have not yet invented a more expensive 
way of producing electricity. That's why the Left wants to hide the 
true cost to consumers through their taxes--and other people's 
electricity bills.
    One of the Democratic witnesses calls wind and solar ``reliable.'' 
In fact, at a moment's notice a passing cloudbank or a sudden calm can 
drop generation to zero. Electricity grids collapse unless the amount 
of power put into the system constantly matches the amount drawn from 
it. So consumers end up paying to keep conventional plants at constant 
stand-by to replace the lost power at a moment's notice.
    Because of the low output of wind and solar and the distance the 
electricity must often be conveyed, existing AC transmission systems 
must be replaced with extremely expensive special high-tension direct-
current lines to accommodate them.
    A generation ago, the objective of our federal water and power 
policy could be summed up in a single word: abundance. This policy laid 
a foundation for the prosperity of the Southwest and literally made 
Arizona bloom from the desert.
    But beginning in the 1970's, a radical and retrograde ideology 
began to seep into our public policy. It abandoned abundance as our 
objective and replaced it with the rationing of shortages.
    A few months ago, the Administration boasted that it would--quote--
``...increase available water supply...in the western United States by 
730,000 acre feet.'' But they weren't talking about increasing our 
water supplies--they were talking about reducing human consumption by 
that amount. In today's testimony, a Democratic witness touts 
``negawatts''--electricity we don't use--as if it added to our 
capacity.
    The future they are planning is one where families are encouraged, 
threatened and, if need be, forced to reduce consumption through higher 
water and electricity bills, higher taxes and fines and intrusive 
government regulations.
    Ironically, they see nothing wrong with spilling millions of 
gallons of water from the Glen Canyon dam (and sacrificing enough 
electricity to power a million homes for a year) to ``simulate'' spring 
floods. But they are aghast that a family might actually prefer a 
toilet that works or light bulbs that don't give them headaches.
    I find the future advocated by the environmental Left to be 
indescribably dreary and depressing. It is a future of increasingly 
severe government-induced shortages, higher and higher electricity and 
water prices, massive taxpayer subsidies to politically well-connected 
companies, increasingly severe wildfires and a permanently declining 
quality of life for our children--who will be required to stretch and 
ration every drop of water and every watt of electricity in their dimly 
lit, sweltering, and parched homes.
    I see a different future for our nation: I see a new era of clean, 
cheap and abundant electricity. I see great new reservoirs to store 
water in wet years to assure abundance in dry ones. I see a future in 
which families can enjoy the prosperity that abundant water and 
electricity provides; and the quality of life that comes from that 
prosperity. I see a nation whose children can look forward to a 
backyard garden, a family swimming pool, affordable air-conditioning in 
the summer and heating in the winter, brightly lit homes and cities and 
abundant and affordable groceries from America's agricultural 
cornucopia.
    These are two very different visions of America, and a choice must 
be made--not just by this sub-Committee or this Congress, but by the 
American people, over which vision guides our nation into the future.
                                 ______
                                 

   STATEMENT OF THE HON. PAUL A. GOSAR, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Dr. Gosar. Well, first of all, I would like to thank 
Chairman McClintock for making the trip to Arizona and holding 
today's hearing. I strongly believe House Committees should 
periodically come out to Members' home states and hear straight 
from the horse's mouth the struggles our constituents are faced 
with on a day-to-day basis. Today's testimonies will provide 
our Committee firsthand accounts of the grave impacts that the 
Federal Government's actions are having on Arizona's economic 
and ecological health, and the information collected will prove 
invaluable in our fight to restore common sense to Federal 
natural resources policy.
    I would also like to thank my colleague Congressman David 
Schweikert for being here. Over the past year and a half, David 
has been a staunch ally as we have tackled the far-reaching 
resources issues facing our state. Additionally, he has emerged 
as a prominent voice on the House Financial Services Committee, 
fighting for pro-market solutions to our state and country's 
foreclosure problems and advocating for policies that will help 
encourage job growth and economic expansion.
    Arizona, like many states across the west, is facing the 
brunt of the Obama Administration's misguided policies. Nowhere 
is this more true than in the natural resources realm. One does 
not have to look far to see the struggles our constituents are 
experiencing.
    Last year nearly 1 million acres of Arizona's forests 
burned, one of the worst fire seasons in the state's history. 
This year has not been much better. Since last April, over 
45,000 acres of forest in Arizona have been destroyed by 
wildfires. The largest one was the Sunflower Fire, which burned 
over 17,000 acres. The second largest, the Gladiator Fire, was 
16,240 acres, and it injured eight people, destroyed six homes, 
and forced the evacuation of three communities.
    Arizonans are tired of being victims of avoidable wildfire 
conditions. It is clear that the current process under existing 
Federal law of planning, studying, consulting, litigating, 
appealing, and collaborating are failing us and our forests. 
These fires kill endangered species, destroy habitats, and 
pollute our air and waterways more than any human activity. 
Additionally, they cost Federal Government millions of dollars 
in immediate fire response and many millions more in 
restoration and rehabilitation.
    We must first remove bureaucratic red tape, reform forest 
health policy, and put a stop to endless litigation that 
stymies important forest projects. The Wallow Fire proved that 
stewardship projects and grazing projects are just what we 
need.
    I have introduced legislation, the Catastrophic Wildfire 
Prevention Act, which will streamline the review process and 
allow the U.S. Forest Service to utilize the emergency 
provisions of existing regulations so that our forests could be 
maintained and provide for economic opportunities for rural 
communities.
    I am also encouraged by the recent announcement that the 
Four Forest Restoration Initiative, known as 4-FRI, will move 
forward. I hope litigation will not slow its success. These 
stewardship projects restore the environment, improve public 
safety, and put people back to work. Proactively treating our 
forests is the only way to go forward.
    As I travel throughout my congressional district, I am 
frequently asked about the future of the Navajo Generating 
Station. Whether it is a farmer in Pinal County, a member of 
the Navajo Nation employed at the plant, or just the everyday 
citizen concerned about our state's water security, everyone 
expresses concern about the potential job loss and economic 
impacts of proposed EPA mandates on the Navajo Generating 
Station.
    For those who do not know, this unique facility provides 
over 90 percent of the power for the Central Arizona Project, 
or CAP, which is the largest supplier of renewable water in the 
state, and supports over 80 percent of Arizona's population and 
economic activity. Additionally, the sale of the plant's excess 
power is critical to the Federal Government's ability to uphold 
previously enacted and future Native American water 
settlements. In short, it is a vital and irreplaceable piece of 
our state's short and long-term water and power security whose 
impact stretches to nearly every citizen of our state.
    Last year this Committee held a hearing in Washington 
specifically on this issue, underscoring the importance of the 
facility. I look forward to hearing more information from some 
of our witnesses and remain steadfast in my efforts to ensure 
this vital asset does not become a victim of misguided policies 
or junk science.
    I would be remiss if I didn't mention one other issue that 
our Committee just recently began delving into that have vast 
impacts throughout your state.
    On March 16th, 2012, the Secretary of Energy issued a 
memorandum for power marketing administrators. This memo, 
commonly referred to as the Chu Memorandum, has created a great 
deal of concern among those who rely on Power Marketing 
Administrations, or PMAs, for affordable and reliable energy.
    The Secretary's memo directed the PMAs to act in areas 
involving transmission expansion, renewable energy, energy 
efficiency and cyber security. And they are all laudable goals, 
goals that on the surface I support. In fact, I have strongly 
advocated for the expansion of transmission on this Committee. 
However, I believe the Secretary's means of these goals, the 
Chu Memo, would implement a top-down approach that could most 
certainly impose greater costs and risks that outweigh benefits 
and could force national directives that could supersede or 
conflict with existing PMA statutory authority.
    I have recently led a letter in Congress respectfully 
urging the Secretary to pursue meaningful collaboration with 
stakeholders, including ratepayers and Congress, prior to 
moving forward with these new initiatives. Currently that 
letter has been signed by over 140 U.S. Senators and 
congressmen, ranging from Chairman McClintock to Congressman 
Jim McDermott of Washington, prominent Democrat in the House.
    Additionally, the House Appropriations approved a policy 
rider introduced by Congressman Denny Rehberg of Montana and 
supported by Arizona Democrat Congressman and Energy and Water 
Subcommittee Ranking Member Ed Pastor barring the Secretary 
from implementing the Chu directive. It is clear Members from 
both sides of the aisle are concerned about how the Chu 
Memorandum will be implemented. Hopefully today's discussions 
will continue the debate and enhance the Committee's ability to 
exercise its oversight authority on this important public power 
issue.
    In conclusion, Arizona has strong and innovative leaders. 
Working together, we have found a number of solutions that will 
put Arizonans back to work. Arizona can be a national model for 
economic recovery driven by sustainable resource development. 
The Federal Government just needs to get out of the way.
    And I thank the Chairman for allowing me to speak.
    Mr. McClintock. You are very welcome. And you owe the 
Committee one minute, 18 seconds, which I will put on your tab.
    [The prepared statement of Dr. Gosar follows:]

      Statement of The Honorable Paul A. Gosar, a Representative 
                 in Congress from the State of Arizona

    First, I would like to thank Chairman McClintock for making the 
trip to Arizona and holding today's hearing. I strongly believe House 
committees should periodically comes out to its members' home states 
and hear straight from the horse's mouth the struggles our constituents 
are faced with on a day-to-day basis. Today's testimonies will provide 
our committee first-hand accounts of the grave impacts the federal 
government's actions are having on Arizona's economic and ecological 
health, and the information collected will prove invaluable in our 
fight to restore common sense to federal natural resources policy.
    I would also like to thank my colleague Congressman David 
Schweikert for being here. Over the past year-and-a-half, David has 
been a staunch ally as we have tackled the far-reaching resources 
issues facing our state. Additionally, he has emerged as a prominent 
voice on the House Financial Services Committee, fighting for pro-
market solutions to our state and country's foreclosure problems and 
advocating for policies that will help encourage job growth and 
economic expansion.
    Arizona, like many other states across the west, is facing the 
brunt of the Obama Administration's misguided policies. Nowhere is this 
more true than in the natural resources realm.
    One does not have to look far to see the struggles our constituents 
are experiencing. Last year, nearly one million acres of Arizona's 
forests burned, one of the worst fire seasons in our state's history. 
This year has not been any better. Since late April, over 45,000 acres 
of forest in Arizona have been destroyed due to wildfires. The largest 
one was the Sunflower Fire which burned over 17,000 acres. The second-
largest Gladiator Fire was 16,240 acres and it injured eight people, 
destroyed six homes, and forced the evacuation of three communities.
    Arizonans are tired of being victims of avoidable wildfire 
conditions. It is clear that the current process, under existing 
federal law, of planning, studying, consulting, litigating, appealing, 
and collaborating are failing us and our forests. These fires kill 
endangered species, destroy habitats, and pollute our air and waterways 
more than any human activity. Additionally, they cost the federal 
government millions of dollars in immediate fire response and many 
millions more in restoration and rehabilitation
    We must remove bureaucratic red tape, reform forest health policy, 
and put a stop to endless litigation that stymies important forest 
projects. The Wallow Fire proved that stewardship projects and grazing 
works, we just need more of it. I have introduced legislation, the 
Catastrophic Wildfire Prevent Act, which will streamline the review 
process and allow the U.S. Forest Service to utilize the emergency 
provisions of existing regulations, so that our forests could be 
maintained and provide economic opportunities for rural communities. I 
am also encouraged by the recent announcement that the Four Forest 
Restoration Initiative, known as 4-FRI, will move forward. I hope 
litigation will not slow its success. These stewardship projects 
restore the environment, improve public safety, and put people back to 
work. Pro-actively treating our forests is the only way forward.
    As I travel throughout my Congressional District, I am frequently 
asked about the future of the Navajo Generating Station. Whether it's a 
farmer in Pinal County, a member of the Navajo Nation employed at the 
plant, or just the everyday citizen concerned about our state's water 
security, everyone expresses concern about the potential job loss and 
economic impacts of proposed EPA mandates on the Navajo Generating 
Station. For those who do not know, this unique facility provides over 
90 percent of the power for the Central Arizona Project (CAP), which is 
the largest supplier of renewable water in the state, and supports over 
80 percent of Arizona's population and economic activity. Additionally, 
the sale of the plant's excess power is critical to the federal 
government's ability to uphold previously enacted and future Native 
American water settlements. In short, it is a vital and irreplaceable 
piece of our state's short and long-term water and power security, 
whose impacted stretches to nearly every citizen of our state.
    Last year, this committee held a hearing in Washington specifically 
on this issue, underscoring the importance of the facility. I look 
forward to hearing new information from some of our witnesses and 
remain steadfast in my efforts to ensure this vital asset does not 
become a victim of misguided policies and junk science.
    I would be remiss if I did not briefly mention one other issue that 
our committee just recently began delving into that would have vast 
impacts throughout our state. On March 16, 2012, The Secretary of 
Energy issued a ``Memorandum for Power Marketing Administrators.'' This 
memo, commonly referred to as the ``Chu Memorandum'' has created a 
great deal of concern among those who rely on Power Marketing 
Administrations (PMAs) for affordable and reliable energy.
    The Secretary's memos direct the PMAs to act in areas involving 
transmission expansion, renewable energy, energy efficiency, and cyber 
security--all laudable goals--goals that, on the surface, I support. In 
fact, I have strongly advocated for the expansion of transmission on 
this committee. However, I believe the Secretary's means of these 
goals, ``the Chu Memo,'' would implement a top-down approach that could 
most certainly impose greater costs and risks that outweigh benefits 
and could force national directives that would supersede or conflict 
with existing PMA statutory authority.
    I have recently led a letter in Congress respectfully urging the 
Secretary to pursue meaningful collaboration with stakeholders, 
including ratepayers and Congress, prior to moving forward with these 
new initiatives. Currently, that letter has been signed by over 140 
U.S. Senators and Congressman ranging from the Chairman McClintock to 
Congressman Jim McDermott of Washington, a prominent Democrat in the 
House. Additionally, the House Appropriations Committee recently 
approved a policy rider, introduced by Congressman Denny Rehberg of 
Montana and supported by Arizona Democrat Congressman and Energy and 
Water Subcommittee Ranking Member Ed Pastor, barring the Secretary from 
implementing the Chu directives. It is clear members from both sides of 
the aisle are concerned about how the Chu Memorandum would be 
implemented. Hopefully today's discussions will continue the debate and 
enhance the committee's ability to exercise its oversight authority on 
this important public power issue.
    In conclusion, Arizona has strong and innovative leaders. Working 
together, we have found a number of solutions that will put Arizonans 
back to work. Arizona can be a national model for economic recovery 
driven by sustainable resource development. The federal government just 
needs to get out of the way.
    Thank you again everyone for being with us here today. It is great 
to see so many constituents in the crowd who have traveled into town 
from all stretches of rural Arizona to take part in today's hearing. 
Together, we are going to get our country back on track.
                                 ______
                                 
    Mr. McClintock. I am very pleased to introduce my colleague 
from Arizona, Mr. Schweikert.

  STATEMENT OF THE HON. DAVID SCHWEIKERT, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF ARIZONA

    Mr. Schweikert. Well, I will make it up by being fairly 
short. And, Mr. Chairman, thank you for being here. And I see 
many friends out there.
    You know, this is sort of coming home. Think of it. 21 
years ago I was sitting in this chair and part of the 
conversation we are about to have is the same one we were 
having 21 years ago. But at that time, we actually had a 
partner in the Federal Government. And then in 1993, I will 
tell you, I believe it turned hostile. And I remember actually 
those of us in leadership going back to Washington, D.C. To lay 
our claim and our story of we are from the desert, do you 
understand how we live, how things work, and basically looking 
at blank faces and then were ushered out of the meeting because 
we were from a small state that had not voted for that 
administration. And I believe that same sort of hostility is 
still woven within the bureaucracy.
    What you are doing here today is incredibly important. And 
this is not theater. This is actually we need to tell our 
story. In my 16 months back in D.C., I have learned they really 
have no understanding how the west works. They have no 
understanding how vast our territories are, the infrastructure 
that we have struggled and bled to build, and how that 
infrastructure running through the top part of the state is 
vital to what is happening in the southern part of the state. 
We need to tell our story. But it is not only for those of us 
here to tell our story why this is crucial, why these policies, 
why the bureaucracy can be so devastating to our future. But we 
also, for those of us in these urban areas, let's face it, a 
lot of our brothers and sisters on the other side of this 
building here in the Grand Imperial State of Maricopa County--
OK, that was funny--have no understanding of the economic 
threats that are functionally coming through the bureaucracy to 
the state and to our future growth. And to each of you here, it 
is not only understanding your testimony, understanding your 
vision of what you see happening, we have to tell the story. We 
have to get this information out, because, if not, I believe 
the bureaucracies are going to do some very, very bad things to 
the future of the southwest.
    And, Mr. Chairman, with that, I yield back.
    Mr. McClintock. Thank you.
    [The prepared statement of Mr. Schweikert follows:]

     Statement of The Honorable David Schweikert, a Representative 
                 in Congress from the State of Arizona

    Well, I'll make it up by being fairly short. Mr. Chairman, thank 
you for being here. I see many friends out there. This is sort of 
coming home--think of this--twenty-one years ago I was sitting in this 
chair and part of the conversation we're about to have--is the same one 
we were having twenty-one years ago. But at that time, we actually had 
a partner in the federal government. And then in 1993, I will tell you, 
I believe it turned hostile. And I remember those of us in leadership 
going back to Washington DC to lay our claim and our story, ``We're 
from the desert, do you understand how we live, how things work?''and 
basically looking at blank faces. Then we were ushered out of the 
meeting because we were from a small state that had not voted for that 
administration and I believe that same sort of hostility is still woven 
within the bureaucracy. What you're doing here today is incredibly 
important. This is not theater. We need to tell our story. In my 
sixteen months here in DC I've learned they really have no 
understanding of how the west works. They have no understanding how 
vast our territory is. The infrastructure we have struggled and bled to 
build. And how that infrastructure running through the top part of the 
state is vital to what's happening in the southern part of the state. 
We need to tell our story. But it's not only for those of us here to 
tell our story--why this is crucial, why these policies, why the 
bureaucracy can be so devastating to our future--but we also for those 
of us in these urban areas. Let's face it, a lot of our brothers and 
sisters on the other side of this building here in the ``Grand Imperial 
State of Maricopa County''--OK that was funny--have no understanding of 
the economic threats that are functionally coming through the 
bureaucracy to the state to our future growth. And for each of you 
here, it `s not only understanding your testimony, understanding your 
vision of what you see happening. We have to tell the story. We have to 
get this information out because if not I believe the bureaucracies are 
going to do some very, very bad things to the future of the southwest 
and Mr. Chairman with that, I yield back.
                                 ______
                                 
    Mr. McClintock. Before I recognize today's witnesses, I 
would urge those in attendance to submit their own testimony 
for the record since we are limited in terms of how many 
witnesses we can hear today. You can do so by filling out your 
thoughts on the paper at the table or please see a staff member 
on how to submit comments electronically. Your input is very 
important to us.
    We will now hear from our panel of witnesses. Each witness' 
written testimony will appear in full in the hearing record. I 
would ask each witness to keep his or her oral statement to 
five minutes as outlined in our invitation letter under 
Committee Rule 4A.
    I also want to explain how our timing lights work. When you 
begin to speak, our clerk will start the timer. A green light 
will appear. At that time you have all the time in the world, 
or at least four minutes. After four minutes a yellow light 
will appear. And at that time you should start talking very, 
very fast. And after five minutes the red light will come up. 
Now, the red light means that we have all stopped listening, so 
you might as well stop talking. But we welcome any additional 
testimony you might want to submit for the record. And if there 
is any consolation, all the Members are bound by that same 
five-minute rule. Apparently somebody figured out a long time 
ago that five minutes is about the maximum attention span of a 
Member of Congress.
    So with that, I will recognize The Honorable Gregory 
Mendoza, Governor of the Gila River Indian Community from 
Sacaton, Arizona to testify.

  STATEMENT OF THE HON. GREGORY MENDOZA, GOVERNOR, GILA RIVER 
               INDIAN COMMUNITY, SACATON, ARIZONA

    Governor Mendoza. Good morning, Chairman McClintock. Thank 
you for the opportunity to address the Subcommittee today.
    I am Gregory Mendoza, the Governor of the Gila River Indian 
Community. We are an Indian Nation of over 20,000 members 
located south of Phoenix metropolitan area.
    The Community sees the issue before you today from the 
vantage point of the largest customer of Central Arizona 
Project, or CAP, water. Critical to the Community's economy, 
the Navajo Generating Station plays an integral role in 
delivering Colorado River water to central and southern Arizona 
through CAP and meeting Federal trust responsibilities under 
the Community's 2004 water settlement.
    Should the cost of emission controls at NGS make CAP water 
unaffordable, the Community's water rights would be 
significantly diminished and it would suffer significant 
economic hardship. As we previously testified before this 
Subcommittee, this result would be especially troubling given 
the clear history of my people and the Gila River.
    During the May 24, 2011 hearing, we expressed our concerns 
about the potential consequences for the Community that could 
occur if EPA's Best Available Retrofit Technology, or BART, 
determination at NGS requires selective catalytic reduction, or 
SCR. After that hearing, the Community actively engaged with 
the EPA, the Department of the Interior, and the Department of 
Energy in order to express the Community's concerns in a 
government-to-government capacity. In addition, the community 
took the proactive steps of hiring an economist to determine 
the possible economic impacts on the Community under the 
different BART scenarios at NGS.
    Our study confirmed the Community's worst fears, that EPA's 
BART determination, without a mitigation plan, would devastate 
the Community's agricultural economy and undermined our water 
settlement.
    NGS supplies approximately 95 percent of the power to 
deliver the CAP water to the Community. Our study looked at a 
number of BART scenarios and how they would increase the cost 
of CAP water. The study also looked at what BART may do to 
decrease the future revenue generated from the fund created to 
reduce the Community's cost of obtaining and using its CAP 
water allocation.
    All told, if SCR is installed at NGS, without a mitigation 
plan, we estimate that the total monetary loss to the Community 
through 2044 would be over $757 million. If the NGS shuts down, 
our total monetary loss would be over 2 billion. We have 
provided our study to EPA and the Interior.
    More importantly, during the Community consultation 
sessions with DOI and EPA, both acknowledge that NGS is unlike 
any other electrical generating facility in the southwest 
because of its importance to many tribal economies. We believe 
this acknowledgment by DOI and EPA requires that a BART 
decision at NGS include a pragmatic plan to mitigate the 
negative impact BART would have on tribal economies. Indeed, in 
EPA Administrator Jackson's February 16, 2012, letters to 
Secretary Salazar and Secretary Chu, she expressed a desire to 
find a creative solution with respect to BART at NGS. We 
applaud such an approach.
    In an effort to be a part of the solution, the Community 
has provided to EPA, DOI, and DOE a preliminary proposal for 
the development of a solar facility located on the Gila River 
Indian Reservation. The revenues from this solar facility would 
be used to offset the impacts caused to all CAP settling tribes 
due to increases in the cost of CAP water caused by BART.
    The Community is open to other viable solutions as well, 
but we believe that any proposed BART will need to include a 
mitigation plan that all stakeholders can support.
    At the end of the day, we ask the United States to keep its 
word and not to take action that would negatively affect the 
economy and cultures of CAP tribes and the United States' trust 
responsibility to those and other tribes and rights 
specifically bargained for and granted for Federal legislation.
    Thank you for the opportunity to be heard.
    Mr. McClintock. Good. Thank you, Governor Mendoza.
    [The prepared statement of Governor Mendoza follows:]

         Statement of The Honorable Gregory Mendoza, Governor, 
                      Gila River Indian Community

    My name is Gregory Mendoza and I am Governor of the Gila River 
Indian Community. The Community is an Indian Nation located south of 
Phoenix, Arizona, encompassing 372,000 acres and with over 20,000 
tribal members. On behalf of the Community, I want to thank the 
Subcommittee for its continued interest in this issue that could have a 
very profound effect on all water users in the State of Arizona. In 
particular, I want to thank the members of the Arizona delegation for 
their support and efforts to have Congress take an active oversight 
role to ensure that the detrimental effects of the proposed 
environmental measures for the Navajo Generating Station (NGS) are 
taken into account by the EPA before it seeks to implement them.
    The Community last testified on this matter on May 24, 2011, at 
which time we informed the Subcommittee that the Community agreed to 
settle its water rights claims based upon the promise that affordable 
Central Arizona Project (CAP) water would be available to the Community 
on a long term basis. Congressional approval of the Arizona Water 
Settlements Act of 2004 (AWSA) codified that promise and made the 
Community the largest customer of CAP water in the State of Arizona. 
Because of this promise, the EPA's decision must be consistent with the 
legal rights granted under AWSA, and the United States, including the 
EPA, must uphold its trust obligation to ensure the Community's access 
to affordable annual deliveries of CAP water.
    In our May 24, 2011, testimony the Community conveyed its concerns 
about the potentially catastrophic consequences for Arizona Indian 
tribes, especially for the Community, that could occur if EPA requires 
Selective Catalytic Reduction (SCR) as the Best Available Retrofit 
Technology (BART) for NGS. EPA's BART determination for NGS has the 
potential--unlike any other Clean Air Act determination that we are 
aware of--to profoundly affect the economy and culture of the Community 
and all other similarly situated Arizona tribes with water rights 
settlements, the United States' trust responsibility to these tribes, 
and rights specifically bargained for and granted in Federal 
legislation.
    Since the Subcommittee's May 24, 2011, hearing the Community has 
been actively engaged with the EPA, the Department of Interior (DOI) 
and the Department of Energy (DOE) to express the Community's concerns 
in a government-to-government capacity, provide data regarding the 
economic impact of different BART scenarios, and offer possible 
solutions to mitigate the negative impacts of BART on CAP settling 
tribes. Further, during the later part of 2011 DOI and DOE collaborated 
in a report conducted by the National Renewable Energy Laboratory 
(NREL). The NREL report was intended to inform EPA of the impacts of 
the different BART scenarios. As part of this study NREL gathered data 
from Arizona tribes to determine the impact on tribal economies.
    In an effort to better inform NREL, DOI and EPA the Community 
engaged Harvey Economics to determine the economic impact the different 
BART scenarios would have on the Community. The Harvey Economics study 
confirmed the Community's fears that BART, without a mitigation plan, 
would devastate the Community's agricultural economy and undermine the 
carefully balanced water settlement in AWSA.
    The NREL and Harvey Economics study confirmed that BART could have 
a profound negative impact on tribal economies in Arizona. Moreover, 
during the Community's consultation sessions with DOI and EPA, both 
acknowledged that NGS is unlike any other electrical generating 
facility in the Southwest because of its importance to many tribal 
economies. In our opinion this acknowledgement by DOI and EPA requires 
that any proposal to ensure visibility in our national parks and 
wilderness areas include a pragmatic plan to mitigate the negative 
impact BART would have on tribal economies. Indeed, in Administrator 
Lisa Jackson's February 16, 2012, letters to Secretary Salazar and 
Secretary Chu, the EPA expressed a desire to find a creative solution 
with respect to BART at NGS.\1\
---------------------------------------------------------------------------
    \1\ Attachment 1, February 16, 2012 letters from EPA Administrator 
Lisa Jackson to Secretary of Interior Kenneth Salazar and Secretary of 
Energy Dr. Steven Chu.
---------------------------------------------------------------------------
    The Community has been encouraged by the engagement and support it 
has had from the DOI in particular, and heartened by the Federal 
acknowledgement that NGS was unique and needed a creative solution. In 
response to this news the Community began to explore a possible 
mitigation plan that would allow NGS to stay open, meet Clean Air Act 
standards for haze in the northern Arizona region and lessen the impact 
of BART on CAP settling tribes. This plan was shared with DOI, EPA and 
DOE officials in March and April 2012 and will be discussed below.
1. BART's Economic Impact on the Community
    When I took office I also took on a solemn trust to protect the 
water rights for which we had fought so long to obtain. From the 
beginning of time, the entire life and identify of our people, the 
Akimel O'otham or the ``River People,'' involved the Gila River. We 
drank from the river, irrigated our farms, fished for food and depended 
on the River for many spiritual ceremonies. At the beginning of the 
1900's, farmers upstream of from our lands diverted nearly all the 
water from the Gila River, depriving the Community of water to support 
the Community's agricultural economy, and causing dramatic and 
detrimental changes to our diet, lifestyle, economy, culture and 
spiritual well-being.
    The Community began fighting for its water rights in the early 
1930's, and finally in 2004 Congress approved the Community's 
settlement of its claims to water. This settlement was at the time the 
largest Indian water rights settlement in United States history. The 
Community's settlement was enacted as law in the AWSA. In the 
settlement approved in the AWSA, the Community agreed to waive its 
claims to additional water from the Gila River in exchange for the 
promise of long-term affordable CAP water. The use of CAP water to 
fulfill the entitlements of the Community to Gila River water is an 
essential component its settlement.
    The Community's settlement allocates 311,800 acre feet of CAP water 
to the Community each year, making the Community the single largest CAP 
contractor. The Community's settlement, through the AWSA, also provides 
funds to subsidize the costs of delivering CAP water to the Community, 
and to construct, operate and maintain the facilities necessary to 
allow the Community to fully utilize our allocated water. The AWSA's 
funding mechanism is a fund, entitled the Lower Colorado River Basin 
Development Fund (Development Fund), which pays ``annually the fixed 
operation, maintenance, and replacement charges associated with the 
delivery of [CAP] water held under long-term contracts for use by 
Arizona Indian tribes.'' One of the sources of revenue for the 
Development Fund to pay these costs for CAP settling tribes is the sale 
of surplus power generated from NGS.
    NGS supplies approximately 95% of the power to deliver the CAP 
water to the Community and other CAP customers. Requiring NGS to 
install and operate SCR technology as BART will both significantly 
increase the cost of CAP water and decrease the future revenue 
generated for the Development Fund. These two impacts will 
substantially undermine the benefits that the Community specifically 
bargained for and relied upon in agreeing to settle our water claims 
and claims against the United States.
    In an effort to determine how the different BART scenarios would 
impact the cost of CAP water the Community hired Harvey Economics in 
August 2011 to complete an economic impact study. Harvey Economics 
looked at different BART which included Low Nox Burners 
(LNB), Selective Non-Catalytic Reduction (SNCR), SCR, SCR plus 
Baghouses, and NGS closure. On November 16, 2011, Harvey Economics 
completed draft findings related to the possible BART scenarios.\2\ The 
draft report was based on the information about BART technologies 
available at the time. Harvey Economics updated its report on February 
28, 2012.\3\ On March 15, 2012, Harvey Economics provided another 
update to its report that included revised assumptions provided by the 
NGS operator regarding average cost of capital for all NGS owners.\4\ 
The findings of the final report are summarized as follows.
---------------------------------------------------------------------------
    \2\ Attachment 2, November 16, 2011 letter from Edward F. Harvey to 
Linus Everling.
    \3\ Attachment 3, February 28, 2012 letter from Edward F. Harvey to 
Linus Everling.
    \4\ Attachment 4, March 15, 2012 letter from Edward F. Harvey to 
Linus Everling [hereinafter Final Report].
---------------------------------------------------------------------------
a. Increased Cost of CAP Water
    As the largest CAP contractor the Community will be impacted by the 
increased cost of CAP water more than any other entity in the State. 
LNB have already been installed at NGS. This means that the Community 
is already facing increased CAP water costs for environmental 
mitigation measures at NGS.\5\ If SCR were installed at NGS the 
increase in direct costs for CAP water for the Community alone would 
increase by $35.4 Million over this same period. If the NGS were shut 
down the Community's CAP costs would increase by nearly $290 
Million.\6\
---------------------------------------------------------------------------
    \5\ Final Report at 27.
    \6\ Id.
---------------------------------------------------------------------------
    Given that the Community's agricultural enterprises operate on 
small margins large increases in CAP water would jeopardize the 
viability of the Community's irrigated agriculture. Loss of Community 
cropland would result in loss of Community member employment, personal 
income and hundreds of millions of dollars of Federal investment into 
the Community's irrigation infrastructure.
b. The Revenue to the Lower Colorado River Basin Development Fund will 
        be Substantially Reduced by the Increased Cost of SCR
    Revenue from the sale of excess NGS power is to be used to 
supplement the Development Fund. A determination by EPA to impose SCR 
as the BART would substantially increase the cost of excess NGS power, 
essentially eating away any potential profit from such sales, thereby 
eroding over $60 Million of estimated revenues that the Community and 
other CAP settling tribes counted on to enable the Development Fund to 
subsidize CAP water delivery at least through 2044.\7\ Not only does 
this impact the Community's settlement, the loss of the revenue from 
the sale of excess NGS power threatens the continued viability of all 
current Indian water rights settlements in Arizona, and jeopardizes the 
ability of the United States to settle with other Tribes in on-going 
water rights settlement negotiations. If the NGS was shutdown Harvey 
Economics estimated that reduce revenues to the Development Fund from 
the sale of surplus NGS power would be nearly $500 Million.\8\
---------------------------------------------------------------------------
    \7\ Id.
    \8\ Id.
---------------------------------------------------------------------------
c. Total impact to the Community.
    Should the cost of emissions controls at NGS render CAP water 
unaffordable, the Community's water rights would be significantly 
diminished and the Community would suffer significant economic 
hardship. For example, if SCR is installed at NGS without a mitigation 
plan Harvey Economics estimates that the total monetary loss to the 
Community through 2044 would be over $757 Million.\9\ If the NGS shut 
down total monetary loss would be over $2 Billion.\10\
---------------------------------------------------------------------------
    \9\ Id.
    \10\ Id.
---------------------------------------------------------------------------
    Such monetary loss would be comparable to the original wrongs done 
to the Community when non-Indian farmers upstream on the Gila River 
illegally diverted the flows of the River to the point that it stopped 
running. The uniqueness of NGS dictates that any EPA rulemaking be 
coupled with a mitigation plan to ensure that the economies of Arizona 
tribes are not undermined.
2. NREL Study
    Although the NREL study did show substantial increase to CAP water 
costs it underestimated the impact of the proposed BART implementation 
scenarios on the Development Fund and made some assumptions that were 
very different than in the Harvey Economic Study.
    The scenarios adopted for the NREL report mostly overlap with the 
Harvey Economic study. NREL included scenarios of SNCR, SCR, SCR plus 
Baghouses, and NGS closure in various chapters of the report. NREL did 
not include a LnB alternative, which Harvey Economics did.
    For example, SNCR capital costs and operating cost assumptions in 
the NREL report are substantially different than in the Harvey 
Economics study. NREL assumes capital costs of about $7 Million, 
whereas Harvey Economics assumes capital costs of about $20 Million. 
Further, Harvey Economics' Operation & Maintenance costs are also $8.4 
Million per year versus $4.3 Million per year, under the NREL report. 
Whereas the NREL report data sources were not apparent; Harvey Economic 
obtained its SNCR information from the plant operator, SRP.
    Capital and operating cost assumptions for SCR, under the NREL 
report, are almost exactly the same as those in the Harvey Economic 
study. Both costs were drawn from the Sargent and Lundy study. However, 
NREL provided a range of costs for SCR, including both the National 
Park Service estimates of capital and operating costs and the figures 
from the Sargent and Lundy reports.
    The largest discrepancy was the NREL's estimated impacts on the 
Development Fund. Because the impacts on the Development Fund were 
estimated improperly, the important, negative effects on the Community 
and the other CAP settling tribes from reduced monies into the 
Development fund were missed.
    This shortcoming is explained by the incorrect assumption in the 
NREL report related to the relationship between the cost of NGS power 
generation and the price of NGS surplus power. NREL assumes the cost 
and price which existed at the time of their study would continue over 
the long term. In fact, costs of NGS power have recently been high due 
in part to spiking coal prices (nearly double nationwide since 2000), 
and a depressed market price for power due to economic conditions, 
among other factors.
    For example, the NREL impact estimates on the Development Fund 
assume that the current NGS surplus power sales price will stay at 
current levels. The current market ranges between $19 per megawatt-hour 
(MWH) off-peak to $35MWH on-peak. This is compared with the market 
price five or so years ago when power was selling for $40--$45 for MWH 
power off-peak, $80 per MWH on-peak. Because the NREL study fixed in 
place the cost and price of NGS surplus power, the negative effects of 
the BART scenarios on the Development fund are not apparent. However, 
projecting even a return to more normal market conditions, much less 
power price escalation over the long term, would reveal the diminished 
revenues to the Development Fund from the proposed BART scenarios.
    Why is this important to the Community and the other CAP Indian 
tribes? A primary purpose of the Development Fund is to pay the tribal 
portion of CAP fixed operations, maintenance and replacement costs for 
CAP water. If the Development Fund cannot pay those obligations, then 
the Community and other CAP settling tribes would be obligated to do 
so, which would result in a tripling of CAP water costs at current 
rates. Such an increase would render CAP water use by the Community and 
other tribes to be infeasible.
3. United States Recognition that NGS is Unique
    In its meetings with both DOI and EPA the Community was encouraged 
that that there was a recognition that the NGS facility is unique due 
to the Bureau of Reclamation's partial ownership of the facility, and 
the dual purposes to provide economic development opportunities to the 
Navajo Nation and Hopi Tribe, and provide energy to deliver CAP water 
to central Arizona for use by tribes and other non-Indian water users. 
Federal officials also acknowledged that because of NGS' unique nature 
BART implementation would require a creative thinking so as to minimize 
the negative economic impact on tribes.
    In February Administrator Jackson sent letters to Secretary Chu and 
Secretary Salazar asking for agency collaboration to work toward a 
clean energy future with respect to NGS and CAP tribes The Community 
applauds this suggestion for two reasons. First, it is an 
acknowledgement that EPA's BART determination at NGS requires a 
pragmatic approach because of the Federal trust responsibility to 
tribes. Second, the Community believes that over time the source of the 
Development Fund needs to be separated from NGS and NGS as a power 
source for delivery of CAP needs to be minimized because the Federal 
government has a conflict with respect to its trust responsibility to 
tribes affected by NGS. On one hand, the United States needs to support 
the Navajo Nation in increasing the coal and lease revenue at NGS. This 
benefits the Navajo Nation but increases the price of CAP energy, which 
the United States has an interest in keeping low for CAP settling 
tribes.
    This inherent conflict can be mitigated if CAP energy and the 
source of Development Funds are decoupled from NGS over a long period 
of time. Further, the Community believes that alternative energy 
sources should be cleaner in order to avoid future negative impacts of 
energy regulation, and that CAP tribes should have more direct 
involvement in the source of subsidies that may be necessary to 
mitigate the impact of BART.
    To our knowledge, the meeting suggested by Administrator Jackson 
has not yet come to pass. The Community urges these agencies to work 
more actively to provide a solution. To assist them in this effort, the 
Community has provided all three agencies with its own thoughts on how 
to mitigate the negative impacts of BART.
4. Community Proposed Solution
    The Community has provided to EPA, DOI and DOE a preliminary 
proposal for the development of a solar facility located on the Gila 
River Indian Reservation (Reservation), the revenues from which would 
be used to offset the impacts caused to CAP settling tribes due to 
increases in the cost of CAP water that are over and above reasonable 
expectation of baseline increases in the CAP energy costs. The facility 
would be located on the Community's Reservation, but the revenues would 
be used to reduce the CAP energy charges for all CAP settling tribes 
using their CAP entitlements under congressionally approved water 
settlements.
    The proposed facility would be expected to produce at least 20MW of 
solar power a year. The size of the facility would increase if the 
agreed upon impact and benefits from early transition to renewable 
energy-based subsidies are deemed sufficiently large to justify them.
    The Community has identified two locations on Reservation that 
could serve easily as the site for such a facility. The Community has 
undertaken, with others, a preliminary feasibility analysis of the 
proposed site, including the cost and engineering work necessary for 
inter connecting the site to the SRP network.
    All net revenues from the facility would be deposited in a special 
account dedicated to payment of the CAP Energy Charges actually charged 
to CAP settling tribes during any given year. The account would be held 
by a suitable entity for purposes of distribution of these net revenues 
annually. Some of the benefits of such a proposal:
          Support from CAP Settling Tribes for an agreement on 
        BART at an appropriate level.
          Acceleration of the transition from a coal-based 
        subsidy to a renewable source of subsidy.
          Combining the interests of tribes in the generation 
        of a subsidy with the interests of the intended beneficiaries 
        of that subsidy, avoiding the conflict of trust 
        responsibilities that currently exist at NGS.
    The Community provided this proposal in an effort to be part of the 
solution. We are open to other viable solutions as well and believe 
that any proposed BART will need to include a mitigation plan that all 
stakeholders can support.
Conclusion
    Once again, the Community appreciates the Subcommittee's continued 
oversight of this critical issue. The timing of this hearing is 
critical as the EPA moves toward the preliminary BART determination in 
the coming weeks.
                                 ______
                                 
    Mr. McClintock. I now recognize The Honorable Gail Griffin, 
Arizona State Senator from Hereford, Arizona, to testify.

         STATEMENT OF THE HON. GAIL GRIFFIN, SENATOR, 
            ARIZONA STATE SENATE, HEREFORD, ARIZONA

    Ms. Griffin. Thank you, Mr. Chairman and Honorable Members 
of the Subcommittee on Water and Power.
    First I would like to talk about a situation in the ``Town 
Too Tough to Die,'' Tombstone, Arizona.
    In May of 2011, the Monument Fire engulfed approximately 
223,000 acres of the Coronado National Forest. 70 homes and 
home structures were destroyed and people's lives were 
disrupted forever. Following the fires, our monsoons occurred 
and further destruction to additional properties occurred.
    Tombstone's water infrastructure is located in the Coronado 
National Forest. And they support the adequate safe drinking 
water and fire suppression. Tombstone's water rights date back 
130 years and prior to the designation of land by the Forest 
Service. Huge mudslides forced boulders, some the size of 
Volkswagens, to tumble down the mountainsides, crushing 
Tombstone's water lines and destroying reservoirs, shutting off 
Tombstone's main water source.
    Arizona Governor Jan Brewer declared a state of emergency 
for the town. Tombstone proceeded to take reasonable action to 
repair their century-old Huachuca Mountain water 
infrastructure. They initially, initially were allowed to use 
mechanized equipment to repair two of Tombstone's 25 
catchments.
    The Forest Service has denied any further use of mechanized 
equipment and motorized vehicles that had been used to maintain 
the water system for decades. The Forest Service has stated 
that Tombstone can only use hand tools and nonmechanized 
equipment to restore their springs and infrastructure. I am 
told that wheelbarrows are too mechanized. Horses, mules, and 
shovels are permitted.
    The whole Town of Tombstone is at risk. Should a fire 
occur, Tombstone is gone, destroyed, history. Tombstone does 
not have enough water to fight a major fire. The people in 
Tombstone deserve better than to have a Federal agency block 
their rights to restore their water.
    Congress established the Forest Service in 1905 to provide 
quality water and timber for the nation's benefit. The Forest 
Service was originally structured to properly manage forests 
for multiple uses and for the benefit of the renewable 
resources such as water, forage, recreation, and production. 
The Forest Service's motto is: Caring for the land and serving 
the people. They have done neither in this case.
    Unlike the national parks, which were created primarily to 
preserve natural beauty and unique outdoor recreation, the 
founders of early national forests envisioned them as working 
forests with multiple objectives. Quote, ``no national forest 
shall be established, except to improve and protect the forest 
within the boundaries or for the purpose of securing favorable 
conditions of water flows and to furnish a continuous supply of 
timber for the use and necessities of citizens of the United 
States,'' unquote, the Organic Administration Act of 1987.
    The forest service is supposed to accomplish the protection 
of management of our natural resources on National Forest 
lands. The proper management of our lands would produce jobs 
and a healthy environment and we would not be experiencing the 
catastrophic fires raging through this country. Please do not 
allow the Federal Government to acquire any more land. They 
have proven they can't take care of what they have now.
    In another matter, the Bureau of Land Management submitted 
a stunning ultimatum to the State of Arizona and the Department 
of Water Resources to stop development in Cochise County near 
the San Pedro National Conservation area. This development in 
Sierra Vista has been on the drawing board for over six years 
and includes a water treatment plant capable of allowing 4 
million gallons of water to be recharged into the aquifer each 
day. In spite of this, BLM claims that the project should not 
be permitted because its sufficient water supply is not legally 
available.
    The agency's letter and the choice of words, legally 
available, has chilling implications for all residents, 
property owners, and property rights advocates, as well as the 
entire country, claiming the sufficient water for the 
development is physically available but legally the property is 
to the Federal Government. This Administration is signaling its 
determination to control water, not only in the San Pedro 
River, but anywhere near it.
    The additional comments are included in your package. And I 
see the yellow light on. So I would refer you to the maps that 
I have brought.
    And if we could have the one on the right turned around, 
what you see in the red and white map, what is in white is all 
Arizona has in private hands. The Arizona Farm Bureau in 1997 
did an analysis. And that little yellow map, if it was all 
consolidated in one location, that's what it would look like. 
They have determined that less than 13 percent of Arizona is in 
private hands. The one on the left, if you flip the whole map 
over, shows you what the Arizona Geological Survey has--yeah, 
turn the paper completely around. Yeah, the board, turn the 
board around.
    This shows Arizona's oil and gas potential. And if you take 
a look at the locations of where the Federal Government has 
frozen our natural resources, that tells the story right there.
    We have, we have formed a study Committee this session to 
identify in each county how much land is in private hands, how 
much land is tax exempt, and how much land is in conservation. 
So our tax base is being eroded by Federal regulations.
    Thank you.
    [The prepared statement of Ms. Griffin follows:]

        Statement of The Honorable Gail Griffin, State Senator, 
                     District 25, State of Arizona

    Chairman Congressman McClintock and Honorable Members of your 
Subcommittee on Water and Power:
    Thank you for being here today and your willingness to listen and 
hopefully take action on what you hear at this hearing.
    My name is Gail Griffin and I'm the State Senator for District 25 
which incorporates portions of five Arizona counties. I represent two 
thirds of Arizona border communities. I'm here today to talk about 
issues of great concern to my constituents and the State of Arizona.
    First, I would like to talk about the situation of the ``Town to 
Tough to Die'', Tombstone, Arizona.
    In May 2011 the Monument Fire engulfed approximately 222,954 acres 
in the Coronado National Forest. Seventy homes and structures were 
totally destroyed and people's lives disrupted forever. Following the 
fires, our monsoons occurred and further destruction to additional 
properties occurred.
    Tombstone's water infrastructure is located in the Coronado 
National Forest which supports both adequate safe drinking water and 
fire suppression. Tombstone's water rights date back 130 years prior to 
any designation of land by the Forest Service.
    Huge mudslides forced boulders, some the size of Volkswagens, to 
tumble down mountainsides crushing Tombstone's water lines and 
destroying reservoirs, shutting off Tombstone's main water source.
    Arizona Governor, Jan Brewer, declared a State of Emergency for the 
town. Tombstone proceeded to take reasonable action to repair their 
century-old Huachuca Mountain water infrastructure. They initially were 
allowed to use mechanized equipment to repair two of Tombstone's 25 
catchments.
    The Forest Service has denied any further use of mechanized 
equipment and motorized vehicles that had been used to maintain their 
water systems for decades. The Forest Service has stated that Tombstone 
can only use hand tools and non-mechanized equipment to restore their 
springs and infrastructure. Wheel barrels are too mechanized; horses, 
mules and shovels are permitted.
    The whole town of Tombstone is at risk. Should a fire occur, 
Tombstone structures could be history. . .gone. Tombstone does not have 
the water to fight a major fire. The people of Tombstone deserve better 
than to have a federal agency block their rights to restore their 
water!
    Congress established the Forest Service in 1905 to provide quality 
water and timber for the Nation's benefit. The Forest Service was 
originally structured to properly manage for multiple uses and for 
benefit of our renewable resources such as water, forage, recreation 
and production. The Forest Service's motto is, ``caring for the land 
and serving people.'' They have done neither in this case.
    The Forest Service is supposed to accomplish the protection and 
management of our natural resources on National Forest lands. The 
proper management of our lands would produce jobs and a healthy 
environment and we would not be experiencing the catastrophic fires 
raging through this country. Please do not allow any more federal 
acquisition of land. They have proven they can't take care of what they 
have.
    In another matter, the Bureau of Land Management submitted a 
stunning ultimatum to this State of Arizona (Department of Water 
Resources) to stop a development in Cochise County near the San Pedro 
National Conservation Area. This development in Sierra Vista has been 
on the drawing board for over six years and includes a water treatment 
plant capable of allowing four million gallons of water to be recharged 
into the aquifer each day. In spite of this, the BLM claims that the 
project should not be permitted because, ``a sufficient water supply is 
not legally available.''
    The agency letter and its choice of words--legally available--has 
chilling implications for all residents, property owners and property 
rights advocates as well as the entire country by claiming the 
sufficient water for the development is physically available, but 
legally the property of the federal government. This administration is 
signaling its determination to control the water not only in the San 
Pedro River but anywhere near it as well.
    This blatant attempt to steal Arizona's water begins a new chapter 
in decades of struggles over property rights and water rights in 
Cochise County and the State of Arizona. To allow the federal 
government to usurp a person's property and water rights and thereby 
taking their freedoms to use their property is unacceptable. Certainly, 
this is not the kind of government our Founders envisioned when they 
crafted our Constitution, with property rights as one of its core 
principles.
    Both of these situations address water issues for our local 
communities. It's not enough to put in place regulations and 
restrictions on property and water rights but the additional layers of 
unreasonable regulations on air standards will also cripple electricity 
providers. Costs will skyrocket and people will not be able to afford 
the standard of living they desire.
    In my district that borders Mexico we have to deal with tires 
burning in landfills across the border. Arizona is a desert and we have 
wind and dust storms that are Acts of God and out of our control. The 
one size fits all policies that are expected from the Environmental 
Protection Agency and other federal agencies/departments do not work 
here. We in Arizona know how to properly manage our lands, our water, 
our air and our lives. State authority and states right are being 
usurped by federal agencies.
    We respectfully ask that you allow us to define our future and 
allow us to properly manage our lands, water, energy and air. Please 
look at the maps in your package and here displayed. Arizona has less 
than 13% of our lands in private property. Look at the map where oil 
and gas potential is. Most of the natural resources are buried in 
federal regulations.
    Thank you for allowing me to testify before you today and thank you 
for being here and listening to our frustrations.
                                 ______
                                 
    Mr. McClintock. By the way, Senator, you might find it 
interesting to note that the District of Columbia, with all of 
its government buildings, its sprawling mall, monuments, and 
parks, the Federal Government owns 25 percent of the land area 
of Washington, D.C. Thank you for the testimony.
    The Chair is now pleased to welcome Representative Amanda 
Reeve from Arizona's District 6 here in Phoenix to testify. I 
won't welcome you since you are already here.

       STATEMENT OF THE HON. AMANDA A. REEVE, DISTRICT 6 
  REPRESENTATIVE, ARIZONA HOUSE OF REPRESENTATIVES, PHOENIX, 
                            ARIZONA

    Ms. Reeve. Thank you, Mr. Chairman and members of the 
Arizona congressional delegation who requested this field 
hearing. I want to thank you for this opportunity to appear 
before you today to discuss with you the concerns regarding the 
impact the Federal actions are having on the State of Arizona.
    I understand the purpose of this hearing is to provide you 
with a firsthand account as to how the actions taken by the 
Federal Government threaten Arizona's water security and 
affordable power supply. It is my experience that our greatest 
threat to these areas of interest is actually tied to our 
state's air quality. Having spent the past two years working 
with Arizona Department of Air Quality, ADEQ, on significant 
air quality issues, I have become very familiar with the 
challenges imposed by the regulations pertaining to regional 
haze, particulate matter, and the Clean Air Act in general, and 
the very significant impact that they have on our water 
security and power supply.
    In the May 12, 2012, letter addressed to Chairmen Hastings 
and McClintock from several Arizona congressional delegates, a 
considerable amount of focus was put on the Navajo Generating 
Station near Page, Arizona, because it is in jeopardy of 
shutting down due to the potential implementation of certain 
Federal regulations. The Regional Haze Rule is at the heart of 
the situation. And NGS is not the only power plant at risk. In 
fact, Cholla power plant near Joseph City, Arizona and the Four 
Corners power plant located near Farmington, New Mexico are 
also uncertain of their future as a result of the Regional Haze 
Rule. All three of these plants are uncertain about their 
future due to the Environmental Protection Agency's, EPA's, 
Regional Haze Rule and what constitutes Best Availability 
Retrofit Technology, or BART.
    ADEQ is challenging EPA on regional haze jurisdiction and 
emission control technologies. Under Section 169A and B of the 
Clean Air Act, certain states have until 2064, Arizona being 
one of them, to attain natural visibility conditions to Class I 
Federal areas through means and procedures established in a 
State Implementation Plan, or SIP, as crafted by the state. 
Arizona submitted its regional haze SIP in December 2003 and 
continued to amend and update it until January 2009.
    Having not received approval or disapproval, but having 
received some comment, Arizona, in February 2011, submitted a 
new regional haze SIP, which EPA has yet to rule on. Meanwhile, 
several environmental organizations filed a lawsuit against EPA 
for not acting more expeditiously in addressing regional haze. 
In an effort to reach an agreement with the environmental 
groups, EPA began having settlement meetings with them but did 
not invite the potentially impacted states to join the 
negotiations.
    In December 2011, Arizona filed a request to intervene in 
the lawsuit. And while we were successful with that request, it 
still did not secure us a seat at the negotiation table. On 
March 30th, 2012, EPA entered into a consent decree for final 
approval by the court. Arizona filed a memorandum in opposition 
to entry of consent decree on April 10th, 2012, citing that the 
imposition of a regional haze FIP, Federally implemented plan, 
on the state, as stipulated in the consent decree, is not 
authorized in accordance with Section 110(c)(1) of the Clean 
Air Act.
    In order for EPA to promulgate a FIP, it first has to find 
that Arizona failed to submit a regional haze SIP, or that 
Arizona's SIP failed to satisfy the minimum criteria for a 
complete regional haze SIP under Section 110(k)(1) of the Clean 
Air Act, or it had to disapprove of Arizona's regional haze 
SIP, none of which occurred.
    If EPA is allowed to promulgate a FIP without just cause, 
then they are effectively undermining our state primacy as 
established in the Clean Air Act. Furthermore, EPA, and not the 
state, will dictate what BART will be imposed on facilities, 
such as the three aforementioned power plants, to control 
emissions contributing to regional haze.
    ADEQ and EPA fundamentally disagree on what constitutes as 
BART. According to ADEQ, low NOx burners and over 
fire air technologies, both of which NGS recently had 
installed, are adequate emission controls. While EPA has not 
made an official decision regarding BART, we do believe that it 
will require facilities to retrofit with the selective 
catalytic reduction, SCR, technologies, which is far more 
costly than those technologies of which ADEQ approves. ADEQ 
states that studies of the SCR technologies do not provide 
sufficient evidence that it is superior or more effective in 
reducing emissions and improving visibility.
    It is clear that EPA has the potential of causing 
irreparable harm to Arizona's water security, power supply, and 
economy should it actually impose a regional haze FIP. 
Furthermore, their actions in this particular situation are 
undeniable encroachment upon our state primacy as guaranteed 
under the Clean Air Act.
    Again, I thank you for this opportunity to discuss these 
important issues with you. And with that, I am available for 
questions.
    Mr. McClintock. Great. Thank you very much, Representative.
    [The prepared statement of Ms. Reeve follows:]

    Statement of The Honorable Amanda Reeve, State Representative, 
                    Arizona House of Representatives

    Mr. Chairman, members of the subcommittee, and members of the 
Arizona Congressional Delegation whom requested this field hearing, I 
want to thank you for this opportunity to appear before you today and 
discuss with you the concerns regarding the impact that federal actions 
are having on the State of Arizona.
    I am Amanda Reeve, State Representative, currently of Legislative 
District 6; and I am the Chair of the Arizona House Environment 
Committee, and a member of the House Energy & Natural Resources 
Committee.
    I understand the purpose of this hearing is to provide you with 
first-hand accounts as to how the actions taken by the federal 
government threaten Arizona's water security and affordable power 
supply. It is my experience that our greatest threat to these two areas 
of interest is actually tied to our State's air quality. Having spent 
the past two years working with the Arizona Department of Environmental 
Quality (``ADEQ'') on significant air quality issues, I have become 
very familiar with the challenges imposed by the regulations pertaining 
to regional haze, particulate matter, and the Clean Air Act (``CAA''); 
and the very significant impact they have on our water security and 
power supply.
    In the May 12, 2012 letter addressed to Chairmen Hastings and 
McClintock from several Arizona Congressional Delegates, a considerable 
amount of focus was put on the Navajo Generating Station (``NGS'') near 
Page, Arizona, because it is in jeopardy of shutting down due to 
potential implementation of certain federal regulations. The Regional 
Haze Rule is at the heart of this situation, and NGS is not the only 
power plant at risk. In fact, Cholla Power Plant near Joseph City, 
Arizona; and the Four Corners Power Plant located near Farmington, New 
Mexico are also uncertain of their future as a result of the Regional 
Haze Rule.
    NGS was constructed in the early 1970s and includes three coal-
fired units with a total net output of 2,250 megawatts. It is operated 
by the Salt River Project (``SRP'') on behalf of six owners. The plant 
provides power to millions of homes and businesses in the Southwest. It 
provides over 90 percent of the power for Central Arizona Project 
(``CAP''), which is the largest supplier of renewable water in the 
state and supports over 80 percent of Arizona's population and economic 
activity. NGS employs over 500 people, and the Kayenta Mine, which 
supplies coal to NGS, has over 400 employees. So, the economic benefit 
to Northern Arizona, alone, is very significant. The state, as a whole, 
experiences substantial broader economic benefits. For example, 
according to a recent study, Arizona State University estimated that 
the NGS and the Kayenta Mine will account for over $20 billion in Gross 
State Product over the next 30 years, and contribute to over 3,000 jobs 
statewide each year.
    The Cholla Power Plant, commissioned in 1962, includes four coal-
fired units with a total net output of 995 megawatts. Arizona Public 
Service (``APS'') owns three of the units, while the fourth and largest 
unit is owned by PacificCorp (``PAC''). Approximately 400 people are 
employed at the plant; and McKinley Mine, which supplies the coal to 
Cholla, employs over 300 people. Cholla provides power to Arizona, 
Nevada, California, New Mexico and the Pacific Northwest.
    The Four Corners Power Plant, commissioned in 1963, includes five 
coal-fired units that generate a total net output of 2,040 megawatts. 
This plant is also mostly operated by APS, employs over 580 people, of 
which nearly 80 percent are Native American, and provides power to 
about 300,000 households in New Mexico, Arizona, California, and Texas. 
Navajo Mine, which supplies the low-sulfur coal to this plant, employs 
over 900 people, of which about 65 percent are Native American.
    All three of these plants are uncertain about their future due to 
the Environmental Protection Agency's (``EPA'') Regional Haze Rule and 
what constitutes Best Available Retrofit Technology (``BART''). The 
situation is more complicated for NGS, because the plant's lease and 
right-of-way agreements are set to expire in 2019. If the additional 
emissions controls are required before the lease and right-of-way 
agreements are extended, owners would need to decide whether to gamble 
on making large capital investments without the certainty of knowing if 
the lease and agreements are extended thereby allowing the plant to 
maintain operations.
    The Regional Haze Rule is a secondary standard meant to improve 
visibility in Class I areas. It is not a health based primary standard 
intended to reduce emissions for public health. Equally true, it is not 
intended to force the implementation of the most stringent available 
controls measures. In the late 1990s, NGS installed wet limestone 
scrubbers in a landmark settlement with environmental interests at a 
total cost of $420 million and voluntarily installed low-NOx 
burners and separated over fire air technology (LNB/SOFA) on the three 
units that reduces nitrogen oxide emissions by 40 percent. That 
installation was completed last year at a cost of $45 million.
    The reason that these three power plants are uncertain of their 
future is because ADEQ is challenging EPA on regional haze jurisdiction 
and emission control technologies. Under Sections 169A & B of the CAA, 
certain states have until 2064 to attain natural visibility conditions 
to Class I Federal areas through means and procedures established in a 
State Implementation Plan (``SIP'') as crafted by the State. Arizona 
submitted its Regional Haze SIP in December 2003 and continued to amend 
and update it until January 2009. EPA did not give approval, nor 
provide feedback on the SIP until January 2009 when it made the 
determination that parts of the plan were incomplete. In February 2011, 
Arizona submitted a new Regional Haze SIP, which EPA has yet to rule 
on. Meanwhile, several environmental organizations filed a lawsuit 
against EPA for not acting more expeditiously in addressing regional 
haze. In an effort to reach an agreement with the environmental groups, 
EPA began having settlement meetings with them, but did not invite the 
potentially impacted State to join the negotiations.
    In December 2011, Arizona filed a request to intervene in the 
lawsuit; and while we were successful with that request, it still did 
not secure us a seat in the negotiations. On March 30, 2012, EPA 
entered into a consent decree for final approval by the court. Arizona 
filed a Memorandum In Opposition to Entry of Consent Decree on April 
10, 2012, citing that the imposition of a Regional Haze FIP on the 
State, as stipulated in the Consent Decree, is not authorized in 
accordance with Section 110(c)(1) of the CAA.
    In order for EPA to promulgate a FIP, it first has to find that 
Arizona failed to submit a Regional Haze SIP, or that Arizona's SIP 
failed to satisfy the minimum criteria for a complete Regional Haze SIP 
under Section 110(k)(1) of the CAA, or it had to disapprove of 
Arizona's Regional Haze SIP, none of which occurred. If EPA is allowed 
to promulgate a FIP without just cause, then they are affectively 
undermining our State primacy as established in the CAA. Furthermore, 
EPA, and not the State, will dictate what BART will be imposed on 
facilities, such as the three aforementioned power plants, to control 
emissions contributing to regional haze.
    ADEQ and EPA fundamentally disagree on what constitutes as BART. 
According to ADEQ, ``Low-NOx burners'' and ``over fire air'' 
technologies, both of which NGS recently had installed, are adequate 
emission controls. However, EPA is requiring that facilities retrofit 
with selective catalytic reduction (``SCR'') technologies, which is far 
more costly than those technologies of which ADEQ approves. ADEQ states 
that studies of the SCR technologies do not provide sufficient evidence 
that it is superior or more effective in reducing emissions and 
improving visibility.
    It is clear that EPA has the potential of causing irreparable harm 
to Arizona's water security, power supply, and economy should it 
actually impose a Regional Haze FIP. Furthermore, their actions in this 
particular situation are an undeniable encroachment upon our State 
primacy as guaranteed under the Clean Air Act.
    Again, I thank you for this opportunity to discuss these important 
issues with you; and with that, I am available for questions.
                                 ______
                                 
    Mr. McClintock. I now recognize The Honorable Doug Von 
Gausig, Mayor of Clarkdale, to testify.

            STATEMENT OF THE HON. DOUG VON GAUSIG, 
               MAYOR, CITY OF CLARKDALE, ARIZONA

    Mr. Von Gausig. Thank you, Mr. Chairman, and thank you to 
the members of the Committee for allowing me to testify today. 
I am Doug Von Gausig. I am the Mayor of Clarkdale, Arizona, 
which is up in the Verde Valley about 100 miles north of where 
we are right now. And I am also the president of the Arizona 
League of Cities and Towns; although, I am representing my town 
specifically.
    As the Mayor of Clarkdale and as a current president of the 
Arizona League of Cities and Towns, I strongly advocate 
increasing the amount of renewable energy that is produced and 
consumed by our state's cities and towns.
    Because we know the value of renewable energy, in my Town 
of Clarkdale, we have several initiatives underway that are 
designed to create the kind of environment that will be 
attractive to developers of renewable energy projects. We are 
also investigating the creation of a renewable energy park 
which would bring renewable energy developers to Clarkdale. And 
we are currently exploring the implementation of community 
solar projects, solar farms some call them, that will bring the 
benefits of solar energy to a wider, more inclusive portion of 
our population.
    I am aware, however, that these efforts by me and my town 
are not enough to spur the kind of renewable energy projects 
that could truly become game changers for my town as well as 
for northern Arizona. What we need now is a reliable, 21st 
century transmission grid designed to carry renewable energy, 
and all electrons, throughout the west. We currently do not 
have that transmission system in Arizona or the southwest, and 
I believe that much of what the Department of Energy has 
proposed in its memorandum covering power management agencies 
like WAPA would help renovate our transmission system and get 
it in shape to build more renewables in the west, create a 
secure electrical system that can withstand unexpected events, 
and bring greater prosperity to towns like Clarkdale.
    It is noteworthy that many of the reforms that have been 
proposed by the Department of Energy in its memorandum are 
things that Arizona's regulated utilities like Arizona Public 
Service Company have been implementing for years, and doing so 
without much difficulty. In fact, energy efficiency and 
transmission upgrades for renewable energy are both encouraged 
by the Arizona Corporation Commission. I ask myself why, if the 
private sector can get this done under the supervision of state 
public utility commissions, why can't the Federal power 
utilities, under the guidance of Congress and DOE, do the same 
thing.
    I believe that the failure to modernize the grid will also 
stand in the way of Arizona's efforts to become the solar 
energy capital of the world, an objective that has been stated 
many times by Republican and Democratic leaders alike in our 
state, including most notably Arizona's Republican Governor, 
Jan Brewer. The cost of doing nothing will ultimately harm 
ratepayers by preventing our utilities from balancing their 
energy portfolios with diverse sources of energy, including 
renewables. It is also notable that in large, that large rate 
increases have not resulted from the efforts of companies like 
APS to modernize the grid, build renewables, and implement 
energy efficiency practices. Arizona Public Service has been 
able to do all of these things while keeping rates competitive.
    From a job creation standpoint, a healthy, reliable 
transmission system that is capable of interconnecting new 
energy projects while maintaining quality electrical service is 
of importance to mayors and other local elected officials. 
Arizona this year ranked third in the Nation for job creation 
from solar energy and was third in the Nation for the total 
amount of solar rooftops installed. We can climb even higher in 
those rankings, but only if we have the modern transmission 
system that allows us to do so.
    Ratepayers will be the beneficiary of the DOE's efforts to 
encourage PMAs to improve energy efficiency. Energy efficiency 
is something that we have promoted and implemented in Arizona 
for almost a decade now, primarily because we know that 
conserved energy is the cheapest form of energy. In 2010 the 
Arizona Corporation Commission, comprised of a majority of 
Republicans, passed the nation's most ambitious energy 
efficiency resource standard. This 22 percent EERS standard 
will save Arizona ratepayers an estimated $9 billion over the 
course of the next few decades because we will not need to 
build a single new base-load capacity plant until 2030 as a 
result of improving our cost effective energy efficiency.
    Finally, virtually every public opinion poll that has been 
taken in Arizona in the last five years shows overwhelmingly 
that Arizonans want more renewable energy, not less. 
Republicans and Democrats alike are in favor of solar energy, 
and solar has become increasingly popular all across the state, 
even in the most conservative corners. In fact, the community 
that is growing the fastest in terms of installed solar 
rooftops is Sun City, hardly a liberal stronghold.
    The point is this is not a political issue but it is about 
Arizona's long-term ability to meet the growing energy demand 
in the most practical, efficient, and economical way. I urge 
you to support the DOE's efforts to modernize the PMAs, 
including WAPA.
    Thank you much, very much once again for allowing me to 
testify.
    Mr. McClintock. Thank you, Mr. Mayor.
    [The prepared statement of Mr. Von Gausig follows:]

 Statement of The Honorable Doug Von Gausig, Mayor, Clarkdale, Arizona

    I am pleased to offer this testimony to the House of 
Representatives' Natural Resources Committee's Subcommittee on Water 
and Power.
    As the Mayor of Clarkdale, Arizona and as the current President of 
the Arizona League of Cities and Towns, I am a strong advocate of 
increasing the amount of renewable energy that is produced in and 
consumed by our state's cities and towns. Utility-scale renewable 
energy projects benefit not only each and every resident of my town, 
because they are a clean and reliable source of energy, and will 
ultimately become a stabilizing and lowering force on utility rates by 
diversifying the fuels that are used by utilities to create energy. We 
also know in Clarkdale that renewable energy projects can be a boon to 
economic development, by bringing much needed new tax revenues into our 
city, and potentially, new jobs.
    Because we know the value of renewable energy, in Clarkdale we have 
several initiatives underway that are designed to create the kind of 
environment that will be attractive to the developers of renewable 
energy projects. We have investigated the possibility of creating a 
``renewable energy park'' or zone in Clarkdale, which would bring 
renewable energy developers to Clarkdale, and we have looked at the 
possibility of doing community solar projects in my town, in which 
buildings could be aggregated, solarized and net metered, making solar 
even more affordable for the town and its taxpayers. This kind of 
aggregate metering development can lower the cost of solar 
installations by more than one-third and make the benefits of solar 
energy available in neighborhoods where it was previously impractical.. 
The residents of Clarkdale have time and time again told their elected 
leaders that they expect these kinds on initiatives on renewable 
energy, they support them, and they want to see more of them.
    I am aware, however, that the efforts taken by me and my town are 
not enough to spur the kind of renewable energy projects that could 
truly be game changers for Clarkdale, as well as for northern Arizona. 
What we need the most is a reliable, 21st century transmission grid 
that is designed to carry renewable energy, and frankly, all electrons, 
throughout the West. We currently do not have that transmission system 
in Arizona or in the Southwest, and I believe that much of what the 
Department of Energy has proposed in its memorandum covering the Power 
Management Agencies, or PMA's would help get our transmission system in 
the shape needed to build out renewables in the West and bring greater 
prosperity to towns like Clarkdale.
    More specifically, the memorandum, written by Secretary Chu on 
March 12, lays out several initiatives that would modernize Power 
Marketing Administrations (PMA's) like the Western Area Power 
Authority, which owns and operates several transmission lines that run 
through my county. According to that memo, the DOE has taken the modest 
step of asking the PMA's to consider modernizing their rate designs to 
promote energy efficiency; actually move forward with implementing 
several programs that would spur new transmission that Congress itself 
gave the PMA's years ago; improve coordination with other grid 
operators; and provide WAPA greater ability to govern its own 
expenditures, making it easier for the agency to conduct critical 
repairs and upgrades to its system. While the details of how the PMAs 
are to move forward are unclear and stakeholder participation as part 
of that plan is essential, I believe these measures are efficient 
reasonable, and similar to the kinds of reforms and governance 
improvements that cities and towns across America have had to make to 
remain competitive and solvent. I also understand that the leaders of 
both WAPA and the Bonneville Power Authority have stated they can 
comply with the DOE's requests and that they intend to do so.
    While much of the transmission system in the West is operated by 
investor-owned utilities, a very significant portion of the 
transmission system in my state is operated by the Western Area Power 
Authority. WAPA is particularly important in rural portions of Arizona, 
where it often serves as the backbone infrastructure for other 
utilities, and runs through areas that are ideal for new renewable 
energy projects. It is my understanding that WAPA transmission lines 
have not been modernized in many years, and certainly are not vigorous 
or plentiful enough to allow for renewable energy developers to get 
their projects online, and get those electrons moving throughout the 
Southwest.
    As the mayor of a town in Arizona, I regularly interact with 
members of the Arizona Corporation Commission, the body of government 
that oversees Arizona utilities, and I often interact with the 
utilities themselves. I do find it noteworthy that many of the reforms 
that have been proposed by the Department of Energy in its memorandum 
are things that regulated utilities in Arizona like the Arizona Public 
Service Company (``APS'') have been implementing for years, and without 
much difficulty. In fact, energy efficiency, transmission upgrades for 
renewable energy, to name just two, are regularly approved and 
encouraged by the Arizona Corporation Commission for the utilities they 
regulate. And this is not unique to Arizona. Investor-owned utilities 
across the West have been investing in the future by investing in 
energy efficiency and new transmission for more than a decade. You have 
to ask yourself the question: if the private sector can get it done, 
under the supervision of state Public Utility Commissions, why can't 
these federal power utilities, under the guidance of Congress and the 
DOE? I was encouraged to see the DOE finally take steps to reform the 
Power Marketing Administrations, and pretty disheartened when I learned 
that some members of this Congressional Committee are fighting them on 
actions the rest of the electricity sector have already undertaken and 
the market has dictated.
    I know some on this Committee believe that the Department of 
Energy's plans will somehow cause rate increases for customers. There 
is no doubt that building new infrastructure will cost money. But I 
would ask you to consider the much higher cost of NOT building new 
transmission and NOT repairing and replacing a transmission system that 
badly needs it. The costs of not modernizing WAPA and the other PMA's 
includes the risk of future power outages, and even blackouts that 
could affect not just the town of Clarkdale, but the entire Western 
grid, and our economies. The cost of not modernizing the grid also 
prevents new energy projects from coming online, which will harm the 
ability of towns like mine to carry through on our plans to build a 
more sustainable energy environment while bringing in new jobs. Failure 
to modernize the grid will stand in the way of Arizona's efforts to 
become the solar energy capitol of the world, an objective that has 
been stated many times by Republican and Democratic leaders alike, 
including most notably Arizona's Republican Governor Jan Brewer. The 
cost of not modernizing, will, I believe, also ultimately harm 
ratepayers by preventing our utilities from balancing their energy 
portfolios with multiple sources of energy, including renewables.
    Moreover, large rate increases have not resulted from the efforts 
like Arizona Public Service Company to modernize its grid, build 
renewables, and implement energy efficiency. APS has been able to do 
all of these things while keeping its rates competitive. In fact, as I 
discuss below, the energy efficiency efforts by APS and other electric 
utilities in Arizona will save our state's ratepayers billions of 
dollars over the next two decades. If WAPA fails to change its rate 
structures to allow that kind of energy efficiency, it stands to reason 
that this too will be a cost of not modernizing WAPA's system.
    From a policy standpoint, allowing the Western Area Power Authority 
to fall further and further behind other utilities would represent a 
hurdle to our state's ability to meet its objectives under our 
Renewable Energy Standard. As you may know, like 36 other states, 
Arizona has set out a plan for our utilities to produce or procure a 
certain percentage of our overall energy supplies from renewable 
sources, like solar and wind. In Arizona, under the RES established by 
the Arizona Corporation Commission, we must meet 15 percent by 2025 
renewables, and having a reliable transmission grid will be critical to 
meeting the objectives under Renewable Portfolio Standards, not just 
here but all across the West.
    From a job creation standpoint, a healthy, reliable transmission 
system that is capable of interconnecting new distributed energy 
projects while maintaining quality electrical service is of importance 
to mayors and other local elected officials. Indeed, it is not lost on 
us that Arizona's Renewable Energy Standard--and the solar projects it 
has spawned so far--is credited with helping to bring companies like 
Solon, Suntech, First Solar, Rio Glass, and many others, to our state. 
Arizona this year was third highest in the nation for job creation 
related to solar energy, and was third in the nation for the total 
amount of solar installed. We can climb even higher in those rankings, 
but only if we have the transmission system that allows us to do it. I 
believe that the DOE memorandum will lead to a transmission system that 
will support renewable and other energy projects, which I know will 
foster jobs. And I am not the only Mayor in Arizona looking to energy 
for job creation. Spurring renewable energy is a frequent subject of 
conversation among my fellow Mayors, and it is going to play a 
significant role in the upcoming annual meeting of the League of 
Arizona Cities and Towns.
    The DOE efforts to update the PMA's by asking them to engage in 
more energy efficiency, and altering their rate structures in such a 
way that the PMA's can accomplish this, strikes me as a real benefit to 
ratepayers. Energy efficiency is something that we have been doing in 
Arizona for almost a decade now, primarily because we know that it is 
the cheapest form of energy. It is estimated that energy efficiency 
programs which produce the ``negawatt''--or energy we don't consume to 
begin with--cost between 1 and 3 cents per kilowatt--far less than most 
forms of electricity, from coal, to nuclear to natural gas. In 2010, 
the Arizona Corporation Commission--comprised of a majority of 
Republicans--passed the nation's most ambitious Energy Efficiency 
Resource Standard, requiring our regulated utilities to conserve 22 
percent of their retail sales by 2020 through energy efficiency 
programs. This 22 percent EERS Standard is estimated to save Arizona 
ratepayers $9 billion over the course of the next several decades, 
because we are not going to have to build a single new base load power 
plant here until the year 2030 as a result of doing more cost-effective 
energy efficiency.
    Finally, let me touch for a moment on what clean energy means to my 
community and my state from the standpoint of our future and the kind 
of people we want to be and place we want to live in. Every public 
opinion poll that has been taken here in the past five years shows that 
overwhelmingly Arizonans want us to implement more renewable energy, 
not less. One poll taken in Arizona showed that almost as many 
Republicans as Democrats are in favor of solar energy, and solar has 
become incredibly popular all across the state. The people of Clarkdale 
are putting solar on their rooftops, and are supportive of our plans to 
do community solar. And renewables are popular even in the most 
conservative corners of the state: I am told that the fastest growing 
part of Arizona right now for the installation of rooftop solar systems 
is Sun City--hardly a liberal bastion.
    These polls don't ask about transmission, but my guess is that if 
folks knew how important this federal utility called WAPA is to our 
ability to build out our renewable energy economy, the majority of 
Arizonans would be in favor of the Department of Energy's plans. They 
certainly wouldn't think that we should stand in the way of efforts to 
make common sense investments in our nation's electrical 
infrastructure.
    As a mayor, I have the responsibility of ensuring that the roads, 
bridges, tunnels, and other critical infrastructure in my town are not 
only adequate to serve my town's current residents, but also are up to 
the task of serving future generations. In Clarkdale, we are focused on 
making sure that our infrastructure is sustainable in a manner that 
allows future generations to enjoy the beauty of the Verde Valley in 
the same way we do today, by promoting renewable energy, energy 
efficiency, and water conservation. At the state level, we have always 
been willing in Arizona to take the tough decisions and make the 
difficult investments in to make this the productive, innovative state 
it is. I believe Congress has a duty to similarly protect and expand 
the electrical infrastructure of the nation; Congress certainly 
shouldn't take our focus off the future by telling the Western Area 
Power Authority that it is appropriate for them to have a sub-par 
transmission system.
    I urge you to support the DOE's efforts to modernize the Power 
Marketing Administrations, including WAPA.
                                 ______
                                 
    Mr. McClintock. I now recognize Ms. Nicole Horseherder, 
Dine of To Nizhoni Ani, from Kykotsmovi, Arizona, to testify.
    Ms. Horseherder, go ahead.

               STATEMENT OF NICOLE HORSEHERDER, 
           DINE, TO NIZHONI ANI, KYKOTSMOVI, ARIZONA

    Ms. Horseherder. Mr. Chairman and members of the 
Subcommittee, thank you for this opportunity to speak before 
you today. My name is Nicole Horseherder. I am Dine Navajo from 
Dzilijiin, Black Mesa, Arizona. I am here as a member of To 
Nizhoni Ani and, recently, Moms Clean Air Force.
    And I am here as your constituent, Congressman Gosar. It is 
unfortunate that I am the only one here to express dissent 
before the Committee. I hope that others have the opportunity 
to submit testimony for the record.
    Since 1971 when NGS came on line and coal from Black Mesa 
was used, and there has been tremendous growth and prosperity 
for Phoenix and Tucson, there has been no real prosperity to 
the Navajo community surrounding the mine in NGS. While you 
hear that 80 percent of the jobs at NGS are Natives', this 
accounts for less than half a percent of the total jobs on the 
reservation.
    Prosperity for some has come to, has come at a cost to the 
Nation. The poverty rate continues to be high. 30 percent of 
Navajos continue to live without electricity and/or running 
water. Over 353 million gallons of pristine Navajo water from 
the N-aquifer was gone in 40 years. And water costs, and water 
costs of bringing--and the cost of bringing water to Black Mesa 
residents have increased as the water levels decline. In 
addition, NGS has enjoyed over 31,000 acre-feet of Navajo water 
per year free of charge for the last 40 years.
    Prosperity has also come at the cost of health. According 
to the EPA, asthma disproportionately affects children in 
families with lower incomes and minorities. Between 1972 and 
1974 and 1996 and '98 Navajo area age adjusted death rates for 
cancer have increased from 43.7 to 87.5 deaths per 100,000 
according to IHS.
    To Nizhoni Ani has engaged community members across the 
northwest and central region of the Navajo Nation, in the area 
of NGS, in a survey to assess the number of family members with 
asthma and respiratory problems. 141 surveys were returned from 
13 communities. Results show that 60 percent of families 
surveyed had at least one person who suffers from respiratory 
problems while 42 percent reported more than one family member 
with respiratory issues. Of those who have respiratory 
problems, half are under the age of 20. I myself have two 
children that suffer from asthma.
    Future prosperity for all calls for a transition. Beyond 
the tangible benefits, a transition away from the unfulfilling 
history of coal and toward clean energy aligns more closely 
with Dine fundamental laws and values.
    The Federal Government as our trustee and as majority owner 
of NGS must be part of meeting this goal. The transition cannot 
be done over night. But the continuation of NGS should be 
contingent on the commitment to renewable energy.
    Four out of five voters believe that coal should be 
replaced by other energy sources. A significant 79 percent of 
the electorate agrees with the statement that we should start 
replacing coal with other energy sources like wind and solar 
power. Three quarters, 75 percent, of APS customers and 84 
percent of SRP customers express agreement with the idea of 
starting to transition from coal to cleaner sources of energy. 
And I will submit that for the record, the study that shows 
that.
    To Nizhoni Ani, with other grassroots groups, are deploying 
the development of solar energy generation facilities on brown 
fields on Black Mesa. At least 6,000 acres of mined lands are 
available at this time. This alone is enough for more than a 
thousand megawatts of power.
    A total of 68,000 acres of land is still held in lease by 
Peabody Western. While some mining has been complete for more 
than 15 years, reclamation has not been completed by Peabody 
and none of the lands have been transferred back to the Nation.
    To Nizhoni also believes the decision EPA should require 
the BART, the Best Available Retrofit Technology, that require 
a minimum SCR for both the Four Corners power plant and the 
Navajo Generating Station, a decision that would reduce the 
health impacts from the pollutants for Navajos living in the 
region.
    Finally, water is scarce in the desert southwest. And large 
volumes of water is used to serve Kayenta Mine in NGS.
    The true cost associated with these environmental and 
public health impacts have never been internalized by the 
operators of the coal complex. It is disappointing to see that, 
as part of the water rights settlement legislation introduced 
in Congress recently, S 2109, and its companion bill, language 
is included to ensure that NGS and Peabody continue their 
operation for another 50 years instead of a meaningful 
transition.
    The Navajo Nation's prosperity has already evaporated with 
the Federal Government's and Arizona's problems. It is time for 
a renewable energy investment on the Navajo Nation. If the Dine 
are to see their existence into the future, they must develop 
clean energy economies instead of continuing to advance 
steadily declining coal based economies.
    Please turn your efforts away from diminishing the powers 
of EPA, which sets the rules that gives us clean air and safe 
power industry that protect all, especially our children and 
elders. Representative Gosar, now is the time for full 
compliance and a transition that must begin today. Let's get 
Arizona on the right path to true prosperity where the costs 
are shared by all who benefit.
    Thank you.
    Mr. McClintock. Thank you, Ms. Horseherder.
    [The prepared statement of Ms. Horseherder follows:]

  Statement of Nicole Horseherder, To Nizhoni Ani, Black Mesa, Arizona

Summary:
    For over fifty years, the Navajo Nation has been largely dependent 
on a coal-based industrial economy. While revenues from development of 
coal resources account for a substantial portion of tribal budgets, 
coal development has had a substantial, and some would say irreparable, 
impact on tribal health, culture, land, air, and water. Further, the 
impacts are not limited to tribal lands as the effects of hazardous air 
and green-house gas emissions, toxic water borne pollution, massive 
depredation of aquifers used for drinking water, and contamination of 
soil, air and water from toxic coal combustion waste (CCW) disposal has 
dispersed into adjacent non-indigenous communities.
    Situated in the Four Corners region of New Mexico and Arizona, the 
Dine homelands encompass an existing, sprawling coal-industrial 
complex. The Navajo Mine operated by BHP Billiton serves the Four 
Corners Power Plant (FCPP) in Fruitland, New Mexico; Kayenta and Black 
Mesa mines operated by Peabody Energy serves Navajo Generating Station 
(NGS) in Page, Arizona. The construction and operation of these 
facilities have been central in the economies of the Navajo Nation. 
Energy is exported from these facilities to Southern California, Texas, 
Southern Arizona, and Nevada.
    The Power Plants at NGS and FCPP will not sustain the Dine in 
perpetuity. Once the fossil fuel supplied by the tribes is extracted, 
the powerful utility companies will be looking for other locations to 
continue their operations. The Dine will have no leverage to level the 
playing field and no plan in place to sustain tribal governance as it 
currently exists.
    After decades of exploitation by mining and energy companies, a 
combination of factors make now the ideal time for the Navajo Nations 
to transition to a more sustainable clean-energy economy.
Best Available Retrofit Technology:
    Under the federal Clean Air Act (CAA), the Four Corners and Navajo 
power plants are subject to requirements for Best Available Retrofit 
Technology (BART) in order to comply with federal regional haze 
requirements. The proposed BART determination for the FCPP, which was 
issued by EPA Region 9 in October 2010, will likely require the 
installation of Selective Catalytic Reduction (SCR) at all five units. 
Estimated cost for the FCPP to install SCR is $717 million for all five 
units.
    The owners of the rapidly aging FCPP and NGS are faced with 
significant decisions about whether to commit financing to pollution-
control technology upgrades for the facilities, or retire them and 
replace their output with modern, clean energy sources. EPA has 
determined it is necessary for the owners of the FCPP to upgrade 
pollution controls to reduce haze in the region. The ruling proposal 
calls for the likely installation of selective catalytic reduction 
controls (SCR), which could cost hundreds of millions of dollars.
    Rather than incur such costly upgrades for plants that will 
eventually be phased out anyway, the Navajo and Hopi would benefit 
instead from a move toward newer, cleaner and more sustainable energy 
sources of which economic equity should be included.
    With significant investment to bring these plants into compliance 
with required regulatory protections, it is entirely possible that the 
owners will determine that the FCPP and NGS have exhausted their 
economically useful lives and that continuing to operate them would be 
unprofitable. Utilities around the country are having the same internal 
debates, and several major owners of FCPP and NGS have already made a 
decision to abandon their stakes in the projects.
    According the EPA website, asthma disproportionately affects 
children, families with lower incomes, and minorities. ``While asthma 
was a rare diagnosis in many HIS areas before 1975, asthma prevalence 
and hospitalizations increased dramatically among AI/AN populations 
during the 1980s.'' (IHS 2006). Between 1972-74 and 1996-98, Navajo 
Area age-adjusted death rates for cancer have increased from 43.7 to 
87.5 deaths per 100,000 populations (IHS 2006).
    In addition, TNA has engaged community members across the northwest 
and central region of the Navajo Nation (in the area of NGS) in a 
survey that is meant to assess the need for a more comprehensive health 
study primarily focused on respiratory and heart disease and may 
include cancer. 141 surveys were returned by adult community members 
from 13 communities in the Northwest region of the Navajo Nation 
(Kaibeto, Chilchinbito, Pinon, Navajo Mt. Coppermine, Lechee, 
Dennehotso, Kitsillie/Black Mesa, Tonalea, Tuba City, Bittersprings, 
CedarRidge, and Shonto). The survey was conducted from March to May, 
2011. The survey asks community members to assess the number of family 
members with asthma and respiratory problems and to identify the number 
of members with respiratory problems over the age of 25 years and under 
the age of 25 years. It also asks community members to identify 
distance to nearest hospital facilities and what other kinds of ways 
they address these problems besides modern methods.
Survey Results:

[GRAPHIC] [TIFF OMITTED] T4559.001


Coal Mining a Legacy of Non-Compliance:
    Part of the transition strategy is to compel meaningful and timely 
reclamation, closure, and clean-up of the tens-of-thousands of acres of 
mine lands used for coal-fired power plants. Actual clean-up and 
reclamation of mined lands (which could take decades) not only creates 
jobs and a transitional revenue stream, but in some instances may 
present important renewable energy site and location opportunities on 
mined-lands (i.e. brown fields).
    Peabody's Kayenta Mining Operation covers approximately 44,000 
acres and has produced approximately 8.5 million tons of coal per year. 
Peabody's 44,073 acre Kayenta Mine mining operation continues to supply 
coal exclusively to the Navajo Generation station and has done so since 
1973. NGS became operational in 1971 and was based in part on a 
resolution from Navajo Nation which waived claims of 50,000 acre feet 
of Navajo water in the upper Colorado River basin for 50 years or the 
life of Navajo Generating Station.
    Tens of millions of tons of coal combustion waste (CCW), the toxic 
by-product of burning coal in power plants, has been disposed of in 
insufficiently regulated landfills and dumped back into the mines or 
on-site on the Navajo Nation. This CCW contains toxic pollutants such 
as mercury, cadmium, barium, and arsenic, which cause cancer and 
various other serious health effects. These contaminants can leach into 
groundwater from the landfills and mines where they are dumped, and can 
migrate to drinking water sources, posing significant public health 
concerns.
    Peabody's 18,000 acre Black Mesa mining operation supplied coal to 
the Mohave Generating Station from 1970 to December 2005. The Black 
Mesa mine became non-operational in 2005 after closure of Mohave in 
2005 due to the Station's inability to comply with the Clean Air Act.
    In addition to the coal mining at the Black Mesa Mine, Peabody has 
also pumped an average of 4000-6000 acre-feet per year. That is more 
than 1.3 billion gallons of potable water annually from the Navajo 
Aquifer (N-Aquifer) between 1969 to 2005 a span of 35 years. This water 
was used to transport pulverized coal in a pipeline (Black Mesa 
Pipeline) 273 miles to the Laughlin, NV, and the location of the Mohave 
Generating Station.
    The N-aquifer is the primary source of water for municipal users 
and tribal members within the 5,400 square mile Black Mesa area. All of 
the Hopi and many of the Navajo who live in the region take their 
water, which they use for drinking, subsistence farming and for 
religious purposes, from the same source. Since Peabody began using N-
aquifer water for its coal slurry operations, water levels have 
decreased by more than 100 feet in some wells and discharge has 
slackened by more than 50 percent in majority of monitored springs. 
There are reports that washes along the mesa's southern cliffs are 
losing outflow. There are also signs that the aquifer is being 
contaminated in places by low-quality water from overlying basins, 
which leaks down in response to the stress caused by pumping. Peabody's 
ongoing groundwater pumping, which is not covered by a reclamation 
bond, undercuts the sustainability of North America's oldest cultures, 
and continues to have a significant impact on tribal communities 
throughout the region.
    In 2010, an independent scientist at the University of Arizona 
completed a study investigating both Peabody's mine and the tribal 
communities' impact on the N-aquifer. This study demonstrated the 
following mine-related impacts and OSM's (coincidental) discretionary 
decisions and actions:
        1.  In 1989, OSM set a damage-threshold for spring discharge at 
        a 10% reduction to discharge caused by the mine.
            As of 2009, Moenkopi Spring (sixty miles southwest of the 
        mine) had declined by more than 26%. OSM maintains, however, 
        that the decline is caused by tribal pumping or recent drought 
        conditions.
            The University of Arizona study demonstrated that the 
        declining rate of discharge from Moenkopi Spring expresses a 
        strong, statistically significant relationship with the rate of 
        Peabody's increasing withdrawals. Further, the spring has no 
        statistically significant relationship with either local 
        municipal withdrawals or local rates of precipitation.
            In 2008, OSM concluded that ``there have been and will be 
        no impacts to these springs attributable to mining'' (OSM-CHIA 
        2008: 86). Subsequently, OSM removed the oversight of Moenkopi 
        Spring from its regulatory review.
        2.  In 1989, OSM determined that water level decline at the 
        community of Kayenta (20 miles north of the mine) would be 
        caused almost entirely by Kayenta's groundwater pumping.
            As of 2009, the water level at Kayenta had dropped more 
        than 106 feet; the aquifer's structural stability is currently 
        at risk of compaction at Kayenta.
            The University of Arizona study demonstrated a 
        statistically significant relationship between Kayenta's 
        declining water level and Peabody's increasing withdrawals. 
        Further, there is no statistically significant relationship 
        between this decline and Kayenta's withdrawals. In fact, the 
        rate of Kayenta's withdrawals expresses a slightly decreasing 
        trend since 1984 although the water level has continued to 
        fall.
            In 2008, OSM concluded that the mine had not adversely 
        affected the N-aquifer and completely removed structural 
        stability from its regulatory purview.
        3.  In 2008, OSM implemented Peabody's $3 million groundwater 
        model for regulatory purposes.
            According to the model report, ``a regional scale model 
        cannot currently be developed for the basin that will 
        accurately predict the impacts of pumping on individual 
        springs'' (HSIGeoTrans & WEHE 1999: 5-23). Similarly, the model 
        cannot accurately simulate groundwater discharge to streams.
            Nonetheless, in 2008, OSM determined that, rather than 
        using actual groundwater monitoring data, it will use the 
        simulation results from Peabody's groundwater model for its 
        annual evaluation of the mine's impact on springs and streams.
    Water is scarce in the desert Southwest, and large volumes of water 
derived from local watersheds serve the needs of the mines and cool the 
coal plants, drawing down aquifers, degrading river water quality and 
depleting one of the region's most valuable and scarce resources. 
Fallout from smokestack pollution and the vast quantities of CCW that 
have been dumped into mines over the past 45-50 years have degraded the 
quality of the remaining water supplies. Health advisories have been 
issued for most streams, rivers and lakes in the Four Corners, warning 
the public against neurological and cardiovascular damage from 
consuming local fish due to mercury contamination (in part due to 
mercury emissions from FCPP and NGS). The true costs associated with 
these environmental and public health impacts have never been 
internalized by the operators of the coal complex.
    The following table illustrates only one example of the gap in 
water prices among Dine living on the Reservation and those living off 
the reservation. Dine in Pinon, Az. (central Navajo Reservation) pay at 
least 20 times more per gallon than do residents in Glendale, Az 
(Phoenix area).

[GRAPHIC] [TIFF OMITTED] T4559.002


Transition the Navajo Nation for the sustainability of all Nations:
    The Navajo Nation is the size of Scotland. It is blessed with an 
abundance of resources that could provide the foundation necessary for 
a transition to renewable energy development. The Navajo Nation 
encompasses regions with ample wind, solar, and geothermal resources, 
along with vast expanses of land, including large reclaimed coal-mining 
tracts that are ideal for locating renewable energy facilities. The 
region's solar potential is some of the best in the world and certain 
portions of reservation lands have wind resource ratings capable of 
supporting utility-scale projects. Additionally, as a result of all 
three power plants' extensive interconnections to the electric grid 
there is a network of power lines whose capacity would be freed up for 
an expansion of renewable energy by phasing out the three coal-burning 
plants.
    Utility-scale development of either wind or solar energy resources 
alone has potential to offset job and revenue losses from the phase-out 
of the existing coal plants. An analysis by the U.S. Department of 
Energy (DOE), for example, determined that constructing a wind energy 
project in Navajo County could generate up to 140 construction and 
operations jobs and more than $14 million in economic activity.
    If the Dine are to see their existence into the future they must 
develop clean energy economies instead continuing to advance a steadily 
declining coal-based economy.
    Beyond the tangible benefits, a transition away from the 
unfulfilling history of coal and toward clean energy aligns more 
closely to Dine fundamental laws and values.
    Building a new clean energy economy, one in which the viability of 
the Navajo Nation is included must be based on the following:
          Acknowledging the real value associated with land, 
        water, air and other natural resources on Dine lands.
          Acknowledging the significant adverse environmental 
        and health impacts of a coal based economy and the reliance on 
        the FCPP and NGS and related mine operations.
          Acknowledging that benefits from the sale of Dine raw 
        resources is directly disproportionate to the profits of the 
        sale or the recipient of cheap electricity.
          Creating legislation that would provide the Navajo 
        Nation the financial, political and regulatory means to pursue 
        real solutions in transitioning from fossil fuel electricity
          Developing privately-owned and tribal-owned clean 
        energy generation resources on Dine lands, such as wind and 
        solar; and,
          Subsidizing clean energy facilities rather than 
        fossil fuel facilities;
    The biggest question Dine face along with the rest of the world is, 
what happens after all the fossil fuel is gone. We have no choice but 
to embrace the renewable technology available and move forward with it.
Position of To Nizhoni Ani:
        1.  It is the position of To Nizhoni Ani that a decision by EPA 
        that would require the Maximum Available Control Technology 
        otherwise known as MACT that requires at minimum SCR for the 
        FCPP and NGS would be the most beneficial in terms of the 
        issues of the regional haze and visibility. More importantly, a 
        MACT decision would also reduce the health impacts from the 
        pollutants for Navajos living in the region.
        2.  In lieu of declining coal resources, the Navajo Nation must 
        work towards incorporating into recent expired leases, a plan 
        to transition these areas into a solar generation facility and 
        to target brownfields instead of undeveloped lands. The purpose 
        of this plan is 1) to ensure continued revenues and jobs for 
        the Navajo Nation and 2) to eliminate health impacts to the 
        people.
        3.  The Navajo Nation must begin incorporating a plan for 
        continued revenues and jobs in place of the declining coal 
        mined at Kayenta and the Navajo Mine. Currently the development 
        of a Solar Energy Generation Facility on brown fields, is being 
        explored by grassroots groups, Black Mesa Water Coalition and 
        To Nizhoni Ani. At least 6,000 aces of mined lands is available 
        at this time. This alone is enough for more than 1000 MW of 
        power. A total of 68,000 acres of land is held in lease by 
        Peabody Western Coal Company. While some mining on hundreds of 
        acres of lease land has been complete for more than 15 years, 
        reclamation has not been completed by Peabody and none of the 
        lands have been transferred back to the Navajo Nation, to be 
        given back to the local residents for use.
            Currently the Black Mesa Water Coalition and To Nizhoni Ani 
        has completed a Solar Potential Study, conducted dozens of 
        community meetings to residents in the mine lease area as well 
        as residents in communities throughout Black Mesa. The purpose 
        of these community meetings is to educate for the purpose of 
        mobilizing the community.
        4.  Installation of Solar facilities on the CAP canals to 
        provide additional power to power the pumps that push the water 
        to Phoenix and Tucson or other power users. This would help 
        eliminate the evaporation of 75,000 acre feet of water 
        annually.
        5.  Make CAP self-sufficient.
                                 ______
                                 
    Mr. McClintock. I just, to keep of the record straight, 
both you and Mayor Van Gausig were invited at the request of 
the minority Democrats on this Committee. I am sorry our 
democratic colleagues aren't here to welcome you, but we 
certainly thank you for your testimony.
    Ms. Horseherder. Thank you.
    Mr. McClintock. Our next witness is Mr. Andy Groseta, 
president of the Arizona Cattle Growers' Association from 
Cottonwood.

   STATEMENT OF P. ANDREW GROSETA, PRESIDENT, ARIZONA CATTLE 
           GROWERS' ASSOCIATION, COTTONWOOD, ARIZONA

    Mr. Groseta. Good morning. My name is Andy Groseta. I am 
here testifying on behalf of the Arizona Cattle Growers' 
Association.
    I would like to thank you for giving me the opportunity to 
testify in front of your Subcommittee today. It is my pleasure 
to enlighten the Committee on the failures of the Federal land 
management and how this has impacted our residents and economy 
in Arizona. But, more importantly, it is drying up our 
watersheds in the entire state.
    I am the current president of ACGA, a professional 
organization that represents over 100,000 ranchers from 
throughout Arizona. I am a third generation rancher, and our 
family has been ranching in the Verde Valley since 1922. We 
operate on Forest Service lands, state private lands. And we 
take our jobs seriously as being good stewards of the land. We 
collaborate with state and Federal agencies to maintain working 
landscapes that are vital to Arizona's economy and its 
citizens.
    Arizona's agricultural industry is a $10.3 billion 
industry, contributing to communities in every county in this 
state. This base industry relies on the stability of sunlight, 
soil, and water to produce the safest and most affordable food 
supply in the world.
    In 1955 ranchers, water users, Salt River Project 
officials, and employees of the United States Forest Service 
all met to discuss the conditions of Arizona's watershed and 
its future. 50 plus years ago these folks recognized the 
importance of water and how the management of land would impact 
agriculture, industry, and a growing city. From this meeting 
and local collaboration, the Beaver Creek Watershed Evaluation 
Program began. The emphasis was to determine how much water 
yield could be increased by managing and controlling vegetation 
on the landscape. At the same time, the project would analyze 
livestock foraging, wildlife, soil types, and recreational 
values. The project encompassed tens of thousands of acres with 
real on-the-ground work. And it went far beyond the computer 
models that we rely on today.
    This type of work contributed to real data over time and 
revealed the benefits of basic landscape stewardship to our 
watersheds. The project continues on today but is not well 
known and does not focus much on the actual on-the-ground work 
of managing vegetation because of over regulation on Federal 
lands and a process that can easily last 10 plus years.
    Now, today, 50 years later, I have the pleasure of coming 
before you again to talk about the same issue that our 
predecessors had the foresight to begin evaluating and 
initiating solutions. However, after 50 years of analyzing and 
collecting data, it is Federal regulations and mountains of 
bureaucratic processes that have kept us from implementing any 
type or practical solutions that would benefit all the citizens 
of Arizona.
    These former leaders understood that there were major 
ecosystem functions that our forest lands provided for: The 
water cycle, the mineral cycle, energy flow, and biological 
succession. They also understand that management, or the lack 
thereof, can have a profound effect on the very important 
functions.
    Recently, over the past 20 years, we have witnessed a 
diminished land, health, and productivity, most especially the 
diminishment of water yields from a now unhealthy water cycle. 
The current lack of action and on-the-ground management has 
diminished the water on our forest lands, which is the water 
that these lands yield to several million people here who live 
in the Valley of the Sun.
    Part of the reason our forests are yielding less water is 
the U.S. Forest is caught up in a process predicament, a 
framework of statutory and regulatory and administrative 
procedures that has rendered the agency ineffective in 
addressing the rapidly declining forest health. The Forest 
Service spends the majority of its time managing lawsuits today 
and job promotions. It has no real time to dedicate to actual 
landscape management. We are literally studying our forests to 
death caused by catastrophic wildfires that threaten our 
communities, destroy our local economies, destroy wildlife 
habitat, and drastically change an ecosystem for a lifetime.
    It was not long ago that many springs and creeks along the 
Mogollon Rim produced twice as much water as they do today. And 
these rural communities were abuzz, were abuzz from the sounds 
of chainsaws and the bells of cows. We had healthy working 
landscapes that provided jobs and safe places for our citizens 
to work and recreate.
    At one time Apache County in northeastern Arizona was one 
of the richest counties in the nation. Federal regulations such 
as the National Environmental Policy Act, the Endangered 
Species Act has become a tool that radical environmental groups 
have used to close our forests down to all mankind. Commercial 
logging no longer exists in Arizona and has not for more than a 
decade. Now Apache County is one of the poorest counties of the 
Nation as Federal regulations have driven families and entire 
industries out of business.
    The cattle industry is struggling to hold on as we continue 
to lose valuable and productive grasslands to overgrown 
forests. And with this, it takes a lot of money to repair and 
restore the damage that these catastrophic wildfires do on our 
Federal lands.
    I would just like to say in closing that the Arizona Cattle 
Growers' Association requests that Congress takes immediate 
action--time is of the essence--to do something to correct the 
Federal land management practices, to create a balanced model 
that recognizes communities, economies, industry, recreation, 
habitat and wildlife. It is possible and it can be done. But 
the bottom line is our forest desperately needs on-the-ground 
management. And that's where we need man and management to 
return to the land.
    Thank you for giving me this opportunity.
    Mr. McClintock. Thank you, Mr. Groseta. I would let you go 
on except I can't put that on Mr. Gosar's tab; it is already 
full, so--but I do thank you for your testimony.
    [The prepared statement of Mr. Groseta follows:]

              Statement of P. Andrew Groseta, President, 
                  Arizona Cattle Growers' Association

    My name is Andy Groseta and I am testifying on behalf of the 
Arizona Cattle Growers' Association. I would like to thank the 
Honorable Tom McClintock, the Honorable Paul Gosar and the Honorable 
Trent Franks for the opportunity to testify in front of the Water and 
Power Subcommittee today. It is my pleasure to enlighten the committee 
on the failures of federal land management and how that has impacted 
our residence and economy, but more importantly it is drying up our 
watershed. I am the current President of the Arizona Cattle Growers' 
Association, a professional organization dedicated to Arizona's Cattle 
Industry and representing over one thousand ranchers across Arizona. I 
am a 3rd generation rancher and our family has been ranching in the 
Verde Valley along the Verde River since 1922. We operate on forest 
service, state and private lands and take our jobs as stewards of the 
land very seriously--in respect for those who have enjoyed them before 
us and to ensure that continues for future generations. We collaborate 
with state and federal agencies to maintain the working landscapes that 
are vital to Arizona's economy and its citizens. Arizona's agricultural 
industry is a 10.3 billion dollar economic engine, contributing to 
communities in every county in the state. This base industry relies on 
the stability of sunlight, soil and water to produce the safest, most 
affordable and reliable food and fiber supply in the world.
    In 1955 ranchers, water users, Salt River Project Officials and 
employees of the United States Forest Service all met to discuss the 
conditions of Arizona's watershed and the future. Fifty plus years ago 
these folks recognized the importance of water and how the management 
of lands would impact agriculture, industry and the people of a growing 
city. From this meeting and local collaboration the Beaver Creek 
Watershed Evaluation Program began. The emphasis was to determine how 
much water yield could be increased by managing and controlling 
vegetation on the landscape. At the same time the project would analyze 
livestock foraging, wildlife, soil types and recreational values. The 
project encompassed tens of thousands of acres with real on-the-ground 
work; it went beyond the computer models we rely on today. This type of 
work contributed real data over time and revealed the benefits of basic 
landscape stewardship to our watershed. The project continues on today 
but is not well known and does not focus much on actual on-the-ground 
work of managing vegetation because of over regulation on federal lands 
and a process that can easily last ten plus years. Now fifty years 
later I have the pleasure of coming before you today to talk about the 
same issue that our predecessor had the insight to begin evaluating and 
initiating solutions. However, after Fifty years of analyzing and 
collecting data it is federal regulation and mountains of bureaucratic 
process that has kept us from implementing any type of practical 
solution that would benefit all the citizens of Arizona.
    These former leaders understood that there were major ecosystem 
functions that our Forest lands provided for: the water cycle, mineral 
cycle, energy flow and biological succession. They also understood that 
management--or the lack thereof--can have a profound effect on these 
very important functions. Recently--over the past two decades--we have 
witnessed a diminished land health and productivity--most especially 
the diminishment of water yields from a now unhealthy water cycle. The 
current lack of action and on the ground management has diminished the 
water our forest lands yield to the several million people who live in 
the ``Valley of the Sun.''
    Part of the reason our forests are yielding less water is that the 
U.S. Forest Service is caught in a process predicament, a frame work of 
statutory, regulatory and administrative procedure that has rendered 
the agency ineffective in addressing the rapidly declining forest 
health. This is absolute fact; the United States Forest Service 
recognizes this issue in a report they issued in 2002. The Forest 
Service spends a majority of its time managing lawsuits and job 
promotions and has no real time to dedicate to the actual landscapes 
and ecosystems that support wildlife, communities and industry. We are 
literally studying our forest to death, a death caused by catastrophic 
wildfires that threatens communities, destroys economies, wildlife 
habitat and drastically changes an ecosystem for a lifetime.
    It was not long ago that many of the springs and creeks along the 
``Mogollon Rim'' produced twice as much water as they do today and the 
rural communities nestled in the middle of the Ponderosa Pines were a 
buzz from the sounds of chainsaws and the bellow of cows. We had 
healthy working landscapes that provided jobs and safe places for 
citizens to recreate all year round. At one time Apache County was one 
of the richest counties in the nation. Federal regulation such as the 
National Environmental Policy Act and the Endangered Species Act has 
become a tool for radical environmental groups used to close our forest 
to all mankind. Commercial scale logging no longer exists in Arizona 
and has not for more than a decade. Apache County has become one of the 
poorest counties in the nation as federal regulation has driven 
families and entire industries out of business. You no longer see semi-
trucks full of logs moving down the highways, forest equipment 
businesses, or the local family owned chainsaw repair shops. You would 
be hard pressed to even find a chainsaw in those northern communities 
anymore. The cattle industry is struggling to hold on as we continue to 
lose grasslands to over grown forests and infrastructure to massive 
wildfires that take more and more resources to repair.
    The overgrown forest, that is growing as we speak, with no tools to 
properly manage timber and forage is slowly cutting the water supply of 
the sixth largest city in the nation, Phoenix. For decades we have 
allowed our forest to become dense with trees sucking up water before 
it hits the river and the arid climate is unable to support such a 
forest in periods of drought. We have left an unnatural forest at the 
hands of Mother Nature and now we are faced with massive wildfires 
charring forests to bare ground. The Wallow fire is a perfect example 
an after fire crew mopped up the hot spots and left, the summer rains 
came causing massive soil erosion and flash floods. Mismanagement of 
federal lands has caused massive wildfire that changed the landscape 
for a lifetime and has now polluted our watershed killing a whole 
generation of fish, frogs and owls.
    Just recently the U.S. Forest Service patted itself on the back for 
issuing the largest stewardship contract in history working with a 
collaborative group called Four Forest Restoration Initiative (4FRI). 
While we all hope this will become a reality quickly the contract that 
was issued has not run the gauntlet of the National Environmental 
Policy Act. At the same time, so called partners in the program have 
issued statements alluding to potential lawsuits. Once again process 
predicament will raise its ugly head while our forest health continues 
to deteriorate.
    It is long past due that we take immediate action to correct 
federal land management to create a balanced model that recognizes 
communities, economies, industry, recreation, habitat and wildlife. It 
is possible and can be done but we have to be sure that it is driven by 
local residents that live and work with the consequences of decisions 
made from DC. The bottom line is our forest desperately needs on the 
ground management and for that we need man to return to our forest with 
chainsaws and cows. It is imperative that we actively manage the 
renewable resources that we have been provided before we allow Mother 
Nature to do it for us.
    I want to thank you for taking the time to come to Arizona today 
and allowing me to testify before the committee. I would be happy to 
entertain any questions.
                                 ______
                                 
    Mr. McClintock. And our next witness is Mr. Tom Jones, who 
is the chief executive officer for the Grand Canyon State 
Electric Cooperative Association from Tempe, Arizona, to 
testify.

STATEMENT OF TOM JONES, GRAND CANYON STATE ELECTRIC COOPERATIVE 
                  ASSOCIATION, TEMPE, ARIZONA

    Mr. Jones. Chairman McClintock, Representative Gosar, Mr. 
Schweikert, thank you for holding this hearing and thank you 
for allowing me an opportunity to testify. My name is Tom 
Jones. I am CEO of Grand Canyon State Electrical Cooperative 
Association, a regional service organization representing the 
interests of cooperative electric utilities and their 
consumers.
    In Arizona 10 electric cooperatives serve more than 220,000 
consumers in 10 of Arizona's 15 counties and employing nearly 
900 people. Electric cooperatives in Arizona average just 12 
customers per mile of electrical distribution line, by far the 
lowest density in the industry. Electric cooperatives were some 
of the first purchasers of Federal hydropower, and today more 
than 600 electric cooperatives in 34 states are PMA customers. 
In Arizona six distribution customers, a generation 
cooperative, and a transmission cooperative serving more than 
220 homes, farms, ranches, and businesses are PMA customers in 
the desert southwestern region of the Western Area Power 
Administration.
    Secretary Chu's memo directs the administrators of PMAs to 
begin a process to fundamentally change the way they do 
business, which will increase electricity rates for millions of 
rural Americans and may not provide meaningful benefits.
    The long-standing partnership between the PMAs and their 
customers in providing access to power produced at Federal dams 
is guided by a statutory requirement that electricity is sold 
at the lowest possible cost to consumers.
    The Energy Department acknowledges that changes proposed in 
its memo will likely be costly. Since incomes of electric 
cooperative customers in Arizona lag 21 percent below the 
national average and 17 percent behind the state average, 
electric cooperatives work daily to keep rates affordable for 
their consumer-members at all times.
    In the memo, Secretary Chu states PMAs will become involved 
in a wide range of businesses, including test bids for cyber 
security, advancing electric car deployment, and energy 
efficiency. These are valid policy goals and, in fact, are ones 
that many electric cooperatives are pursuing. However, asking 
current consumers and taxpayers to foot the bill for these 
pursuits is stepping well outside the PMAs' statutory mission. 
This mission created for the PMAs would be bad public policy.
    The Secretary's memo strikes for some of us as a solution 
looking for a problem, and a potentially costly solution for 
PMA customers, too. The Federal power program pays its own way. 
Indeed the PMAs have consistently operated under the principle 
of beneficiary pays. To hear the Secretary's proposal described 
as a modest step strikes me as a game change for the PMAs to 
one where costs don't matter as long as they are covered by 
OPM, other people's money.
    It is relevant to note that the PMAs control just 6 percent 
of all transmission in the U.S. And barely 10 percent in the 
Western Electricity Coordinating Council area where we are 
located.
    The Secretary's efforts to spur innovation in the 
transmission field using such a small percentage of the grid is 
misplaced at best. In fact, the better agency to do this would 
be the Federal Energy Regulatory Commission.
    Arizona electric co-ops support increasing energy 
efficiency, demand response, and renewable generation. Arizona 
has one of the strongest energy efficiency standards in the 
nation. However, the Secretary's direction to the PMAs to 
participate in an energy balanced market presumably as a tool 
to help with the integration of renewable variable energy 
resources is not necessary at this time. An EIM may be a 
beneficial term but it is just one option among many to help 
efficiently integrate these resources.
    It is interesting to note that the California ISO consumers 
pay a rate that is 26 percent higher for electricity than those 
of us in Arizona.
    We disagree with assertions in the Secretary's memo and 
that have been made here today by some earlier witnesses that 
the WAPA transmission system is outdated and incapable of 
integrating renewable energy resources. I would refer you to 
the attachment in my written testimony that discusses several 
of the mechanisms in use today by owner-operators.
    Congress should exercise its oversight of any proposals 
that alter the statutory mission of the PMAs. By working 
together, Congress, the Administration, and the Federal power 
customers can address the multiple goals of the Federal 
hydropower resource.
    Let me conclude by thanking Congressman Gosar and the other 
two Congressmen on the stage for signing the letter to 
Congress, to Secretary Chu expressing concerns about his memo. 
More than 150 signers in a bipartisan effort, including 18 
Members of the Natural Resources Committee, and eight Members 
of the Water and Power Subcommittee, signed on to that letter.
    I also want to very briefly mention our concerns about coal 
combustion residuals.
    Mr. McClintock. I think we will probably have to ask you to 
defer that to----
    Mr. Jones. Thank you very much.
    Mr. McClintock.--the question and answer period. Thank you, 
Mr. Jones.
    [The prepared statement of Mr. Jones follows:]

           Statement of Tom Jones, Chief Executive Officer, 
       Grand Canyon State Electric Cooperative Association, Inc.

    Mr. Chairman and members of the Subcommittee, thank you for holding 
this hearing and for providing me the opportunity to testify. My 
testimony will mainly focus on the March 16, 2012 memorandum (Memo) 
from Secretary of Energy Steven Chu to the administrators of the four 
Power Marketing Administrations (PMAs) and on the U.S. Environmental 
Protection Agency (EPA) proposed federal regulations governing the 
disposal of Coal Combustion Residuals (CCRs) under the Resource 
Conservation and Recovery Act.
    The Grand Canyon State Electric Cooperative Association (GCSECA) is 
a regional service organization representing the interests of 
cooperative electric utilities and their consumers. Electric 
cooperatives are not-for-profit, private businesses governed by their 
consumers who are members of their cooperative. There are more than 900 
electric cooperatives which serve more than 42 million consumers in 47 
states. In Arizona, 10 electric cooperatives serve more than 220,000 
consumers in 10 of Arizona's 15 counties and employ nearly 900 people. 
Electric cooperatives in Arizona average just 12 customers per mile of 
electrical distribution line, by far the lowest density in the 
industry. These low population densities, the challenge of traversing 
vast, remote stretches of often rugged topography, and the increasing 
uncertainty in the electric marketplace pose a daily challenge to our 
mission: to provide a stable, reliable supply of affordable power to 
our members, your constituents.
Power Marketing Administrations
    Electric cooperatives were some of the first purchasers of federal 
hydropower, and today more than 600 rural electric cooperatives in 34 
states are PMA power customers. In Arizona, six distribution 
cooperatives, a generation cooperative and a transmission cooperative 
serving more than 220,000 homes, farms, ranches and businesses are PMA 
customers in the Desert Southwest Region of the Western Area Power 
Administration (WAPA).
    Secretary Chu's Memo directs the administrators of the PMAs to 
begin a process to fundamentally change the way they do business which 
will increase electricity rates for millions of rural Americans and may 
not provide meaningful benefits.
    The Memo's general policy guideline to ``modernize'' PMA operations 
will needlessly undermine their historic partnership with not-for-
profit electric cooperatives and others in providing affordable and 
reliable electricity that benefits consumers and taxpayers. This 
longstanding partnership in providing access to power produced at 
federal dams is guided by a statutory requirement that electricity is 
sold at ``the lowest possible cost to consumers.''
    The Energy Department acknowledges that changes in its Memo will 
likely be costly. Rising electric bills hurt American families and 
businesses. Since incomes of electric co-op customers in Arizona lag 21 
percent below the national average and 17 percent behind the state 
average, electric cooperatives work to keep rates affordable for their 
consumer-members at all times. Each time input costs increase for an 
electric co-op, their consumer-members electric bills must also 
increase to make up the difference. If changes are made that increase 
the costs of PMA-marketed electricity, customers' cost-based rates will 
also increase.
    While the Memo suggests that increased costs will be ``phased in'' 
to minimize disruption, phasing in expenses does not address the issue 
of increasing costs to consumers with no associated benefits. The 
Energy Department sought no input from PMA customers before initiating 
this effort and many important questions remain to be answered.
    In addition to providing consumers across the country with 
reliable, affordable electricity, the PMA-customer partnership is also 
a good deal to taxpayers. The federal power program pays its own way. 
It provides a mechanism through which dam operation costs are covered 
by federal power customers, including:
          Capital investment costs, including renewals and 
        replacements, with interest;
          Power-related annual operating and dam maintenance 
        costs;
          Transmission and marketing of federal power;
          Financial support of some non-power related authorized 
        project purposes.
    In the Memo, Secretary Chu states PMAs will become involved in a 
wide range of businesses including test beds for cyber security, 
advancing electric car deployment, and energy efficiency. These are 
valid policy goals, and in fact they are ones that many electric 
cooperatives are pursuing. However, asking current consumers and 
taxpayers to foot the bill for these pursuits is stepping well outside 
the PMAs' mission. It would be bad public policy to use the PMAs as 
technology laboratories, forgetting their primary mission of marketing 
federal power.
    It is relevant to note that the PMAs control just six (6) percent 
of all transmission. The Secretary's effort to spur innovation in the 
transmission field, using such a small percentage of the transmission 
sector, is misplaced at best. The agency with direct jurisdiction over 
the majority of transmission facilities in the United States, the 
Federal Energy Regulatory Commission, is better equipped to give policy 
leadership in this context.
    The Energy Department proposal also overlooks the widely-recognized 
leadership of electric cooperatives across the country in smart grid 
technology efforts. Electric co-ops are also actively incorporating 
demand response and reducing load through energy efficiency programs. 
Electric co-ops are both developing renewable energy projects and 
purchasing renewable energy that totals more than 4,000 MW of wind, 
solar, geothermal, biomass and clean renewable hydropower capacity.
    Arizona electric co-ops support increasing energy efficiency, 
demand response and renewable generation. Arizona has one of the 
strongest energy efficiency standards in the nation.
    The Secretary's direction to the PMA's to participate in an Energy 
Imbalance Market (EIM), presumably as a tool to help with the 
integration of renewable/variable energy resources, is not necessary at 
this time. An EIM may be a beneficial tool but it is just one option 
among many to help efficiently integrate these resources. To impose an 
EIM on WAPA while a number of parties are still studying the costs and 
benefits is premature. The costs associated with implementing an EIM 
are significant. We are very concerned about the impact of those costs 
on the rates of PMA customers.
    Transmission owners and operators in the west are currently 
implementing a number of tools to effectively incorporate variable 
generation and increase coordination and cooperation among industry 
players, including the PMAs. We believe that further development of 
these mechanisms, while continuing to study the complexities and costs 
associated with an EIM, is a better approach than hastily creating an 
EIM without sufficient analysis of need or assessment of benefits. Such 
an approach will also aid the PMAs in continuing to provide federal 
hydropower and transmission service at the lowest possible rates.
    Here is a brief description of the mechanisms in use today in the 
west. A more detailed description of these initiatives is included as 
an attachment.
          Intra-hour transmission scheduling--Currently generation 
        is scheduled hourly. However, variable energy resources do not 
        have level production throughout an entire hour. Intra-hour 
        scheduling beginning with thirty-minute schedules has been 
        implemented as a tool to help address this problem.
          Dynamic Scheduling System (DSS)--The output of variable 
        energy resources varies throughout the hour. Schedules must be 
        tracked in real time to know what has actually been purchased. 
        DSS utilizes advanced communications to facilitate intra-hour 
        schedules and dynamic schedules.
          Area Control Error (ACE) Diversity Interchange and 
        Reliability Based Controls (RBC)--Variable generation can 
        increase frequency within an electrical system. ACE and RBC 
        allow operators to balance multiple generating units over a 
        broader electrical area to maintain reliable system frequency.
          Intra-hour transaction scheduling platform--Allows for 
        buyers and sellers to consummate bilateral trades of variable 
        generation from renewable resources within the operating hour.
          Implementation of lower cost local energy efficiency and 
        demand response programs.
    We believe that further development of these mechanisms, while 
continuing to study the complexities and costs associated with an EIM, 
is a better approach than hastily creating an EIM without sufficient 
analysis of need or assessment of benefits. Such an approach will also 
aid the PMAs in continuing to provide federal hydropower and 
transmission service at the lowest possible rates.
    Any changes to the PMAs' strategic planning processes should be 
carefully considered, and new capital expenditures should be 
specifically discussed with the customers who will pay those expenses. 
There should be a full and open public process with opportunities for 
PMA customers to provide input before any changes in existing policy 
and direction are undertaken. Congress should exercise its oversight of 
any proposals that alter the statutory mission of the PMAs. The Energy 
Department should remember three simple principles in its management of 
the PMAs: affordability; fairness; and upholding the PMAs' core 
mission.
    Congress and the Administration could make a significant impact in 
our nation's energy security by working with PMA customers to improve 
federal hydropower resources. These efforts should include:
          Using existing authorities to prudently integrate newly 
        developed resources into federal transmission systems, while 
        improving reliability;
          Improving access to federal lands to speed construction 
        of transmission and distribution lines;
          Recognizing the importance of clean, renewable, 
        affordable hydropower as an important part of our nation's 
        energy policy;
          Making a greater federal commitment to our hydropower 
        resources. The President's budget request and congressional 
        appropriations must prioritize the safety and efficiency of 
        federal dams and power-related resources as a priority.
    The federal power program pays its own way. Unlike most other 
federal programs, appropriations for the federal power program are 
repaid to the U.S. Treasury by federal power customers. Some years ago, 
Congress recognized this fact and decided to change the scoring for the 
PMAs purchased power and wheeling and direct program expenses. Indeed, 
the Congressional Budget Committees, the Congressional Budget Office, 
and the Office of Management and Budget all agreed to change the 
scoring for the PMAs because they recover their expenses in the year in 
which they are incurred.
    From a budget scoring perspective, the PMAs are considered neutral 
and not a draw on the Treasury which means the Secretary's proposals in 
the Memo would hide the true expense of these new initiatives by 
rolling them into the PMAs budget. If the Secretary was to propose 
these initiatives as stand-alone measures, they would have scoring 
impacts which would have to be paid for through spending reductions in 
other programs.
    Historically, deficit reduction measures have curtailed 
appropriations for the federal power program, despite the fact that all 
of the costs of the federal power program are repaid. These 
curtailments threaten the reliability and efficiency of federal 
hydropower assets. However, the federal power customers, in partnership 
with the PMAs and generating agencies, have contributed funds to reduce 
this threat. Continued federal appropriations must remain the primary 
support for sustaining the federal power program, but should not 
preclude alternative funding methods to complement these 
appropriations.
    By working together, Congress, the Administration, and the federal 
power customers can address the multiple goals of the federal 
hydropower resource and the PMAs, and maximize the benefit of the 
system for all.
    Let me conclude this portion of my testimony regarding the PMAs by 
joining Mr. Sullivan in thanking the members of the Committee for their 
support regarding this issue, especially Congressmen Gosar and Matheson 
for their leadership in the House on the forthcoming Congressional 
letter to Secretary Chu. This has truly been a bi-partisan effort.
Coal Combustion Residuals
    Another issue which threatens to profoundly impact electric bills 
of our member-owners is the regulation of Coal Combustion Residuals 
(CCRs). CCRs are materials produced when coal is burned to generate 
electricity. These materials are used beneficially in a variety of 
applications including sustainable construction practices. For example, 
CCRs are used to enhance the strength and durability of concrete. The 
volume of CCRs being recycled and put to beneficial use amounts to 
about 43 percent of all CCRs produced nationally.
    The U.S. Environmental Protection Agency (EPA) has proposed federal 
regulations governing the disposal of CCRs under the Resource 
Conservation and Recovery Act (RCRA). Whether to regulate CCRs as 
hazardous has been researched for nearly three decades and the 
overwhelming conclusion is that CCRs do not warrant hazardous 
regulatory treatment. EPA itself, in two prior reports to Congress and 
two related regulatory determinations, confirmed that regulating CCRs 
under RCRA Subtitle C is not necessary to protect public health and the 
environment.
    Adding to the regulatory uncertainty is a lawsuit filed against EPA 
on April 5, 2012 by a coalition of environmental groups advocating for 
hazardous regulation of CCRs. The lawsuit is designed to force a hard 
legal deadline for release of the rule which could limit EPA's ability 
to fully and carefully select the proper regulatory path forward for 
CCRs.
    In order to resolve the regulatory uncertainty associated with this 
issue, electric co-ops actively support the Coal Residuals Reuse and 
Management Act (H.R. 2273/S. 1751). The legislation would establish a 
federal regulatory program to ensure the safe management of CCRs as a 
non-hazardous material. H.R. 2273 was passed by the U.S. House of 
Representatives on October 14, 2011 on a strong bipartisan vote. S. 
1751, was introduced with bipartisan backing in the U.S. Senate on 
October 20, 2011 but has since stalled in the Senate Environment & 
Public Works Committee.
    Prospects for this legislation improved when the House recently 
voted to include its CCR bill (H.R. 2273) as an amendment to the 
Surface Transportation bill. H.R. 2273 would have the states administer 
a performance-based Subtitle D regulatory program for CCR patterned 
after the criteria for municipal solid waste landfills. In 
circumstances where a state does not implement a CCR permit program, or 
where EPA finds a particular state program to be deficient under a 
defined set of criteria, EPA would administer and enforce the non-
hazardous waste permit program using the same defined set of criteria. 
The bill does not authorize EPA to establish new federal regulations 
for CCR.
    Arizona's electric co-ops agree that regulating CCRs under the RCRA 
hazardous waste rules is not warranted and we oppose the hazardous 
regulatory option set forth in EPA's proposed rule. In addition to 
reducing the rate of beneficial use, hazardous regulatory treatment of 
CCRs will create significant compliance costs at coal-based generation 
facilities. These costs could be sufficiently high to render some units 
uneconomic with plant closure the only viable option.
    Arizona Electric Power Cooperative, Inc. (AEPCO) is the owner/
operator of Apache Generating Station. Approximately 90 percent of the 
180,000 tons of CCRs produced annually at Apache Station are sold for 
beneficial use. The unsold portion is stored at the plant site in a 
lined facility that became operational in 1995 with a projected life 
expectancy of 20 years. Due to the high demand for beneficial reuse of 
CCRs, AEPCO has been able to extend the life expectancy of the waste 
disposal facility.
    The waste disposal facility was designed and constructed in 
accordance with strict regulatory standards under the direction of a 
registered professional civil engineering firm. Safety inspections and 
monitoring of the waste disposal facilities are performed by AEPCO 
internally under the supervision of a registered professional engineer 
on a weekly, monthly and quarterly basis.
    If EPA were to classify CCRs as hazardous waste, AEPCO would be 
forced to close its existing waste disposal facility at a cost of 
approximately $14.5 million. Then, at an estimated initial capital cost 
of $20 million (these costs are without complete detailed engineering), 
AEPCO would have to shift from wet management of CCRs to dry 
management.
    Under Subtitle C, AEPCO would be forced to ship its CCRs to an 
approved off-site landfill for final disposal. Because of AEPCO's 
remote location in southeast Arizona, the costs of trucking and 
disposal of such material would be a significant increase of 
approximately $18.1 million in AEPCO's annual operational cost. This 
figure does not include the cost that will result from the shortage of 
off-site disposal facilities that is likely to occur from a dramatic 
increase in need by AEPCO and many other electric generators.
    The CCRs disposal facility also provides the benefit of wastewater 
compliance for the facility. In order to replace this benefit, which 
will no longer exist if the waste disposal facility was to be closed 
under Subtitle C, AEPCO would need to construct a new evaporation 
surface area to support plant operations. Preliminary estimates 
indicate the new evaporation surface area will need to be approximately 
200 acres for a total estimated capital cost of $20 million.
    All of these costs would flow to customers who would see dramatic 
increases in their electric bills.
    I want to conclude by thanking the Chairman and Committee Members 
for holding this hearing and for the opportunity to address the 
significant impacts these proposals could have on the electric 
cooperative members in Arizona.
                                 ______
                                 
    Mr. McClintock. On a personal note, I want to thank you for 
recognizing the damage that these policies have already done to 
consumers in California and to thank all of you Arizonans for 
welcoming the steady stream of refugees from that economy.
    And with that, our final witness is Mr. John Sullivan, a 
familiar personage to the Subcommittee--we are pleased to 
welcome him back; he is the associate general manager and chief 
resources executive for the Salt River Project of Phoenix, 
Arizona--to testify.

STATEMENT OF JOHN SULLIVAN, ASSOCIATE GENERAL MANAGER AND CHIEF 
   RESOURCES EXECUTIVE, SALT RIVER PROJECT, PHOENIX, ARIZONA

    Mr. Sullivan. Chairman McClintock, members of the 
Subcommittee, Congressman Schweikert, thank you for the 
opportunity to testify at today's hearing. I would also like to 
thank Representative Gosar for his continued interest and 
involvement on many issues of importance to water and power 
users in the State of Arizona.
    My written testimony includes our views on a number of 
issues being discussed at the hearing today. However, I will 
focus the majority of my comments this morning on the 
activities and issues associated with the Navajo Generating 
Station, or NGS.
    I appreciate the comments provided this morning by Governor 
Mendoza and Representative Reeve on NGS.
    The Committee heard last May from Dick Silverman, former 
general manager of SRP, regarding the history of NGS and the 
importance generally to the southwest. As you have heard, the 
issues facing NGS are complex. In order to keep NGS operating 
we must complete the lease extension rights-of-way renewals, 
negotiation of key agreements, and compliance with numerous 
Federal laws.
    To address these challenges SRP has been working with 
Native American Tribes, CAWCD, other effective stakeholders to 
develop a resolution that will ensure the continued operation 
of this critical generating asset. We appreciate our 
relationship with these stakeholders and their continued 
engagement.
    A major outstanding factor is how EPA will move forward 
with its determination on what constitutes Best Available 
Retrofit Technology, or BART, for NGS. We remain hopeful that 
EPA will determine that BART for NGS is the emission controls 
the participants voluntarily installed at the plant over the 
past three years, but the timing of a decision is also 
important and we need EPA to make its preliminary determination 
this summer.
    Clearly the closure of NGS would have far-reaching adverse 
economic impacts to the State of Arizona as a whole and, more 
particularly, to Arizona's Indian Tribes. In fact, Arizona 
State University's Seidman Institute recently conducted a study 
that found NGS and the mine that serves it will contribute over 
$20 billion to Arizona's economy between 2011 and 2044 and 
contribute over 3,000 jobs each year throughout the state.
    I would like to reiterate the importance of a prompt 
decision by EPA to allow NGS participants to make appropriate 
plans moving forward.
    We are pleased the Committee also is looking at forest 
health. To SRP, unhealthy forests present a threat to our 
watershed and numerous electric and communications assets that 
cross these lands. The recent announcement of a landscape 
forest thinning contract in Arizona is a positive step. We hope 
that this is a first step in ongoing forest management. We 
remain committed to working with all the stakeholders and 
Federal agencies to ensure progress continues.
    SRP is also affected by several recent actions and ongoing 
processes impacting power generation at the Glen Canyon Dam. As 
detailed in my written testimony, major changes to Glen Canyon 
operations have complex and far reaching impacts. And the cost 
is largely borne by power customers.
    SRP believes that a balanced approach needs to be taken 
when looking at these issues and remains committed to working 
with the Federal agencies and with Congress.
    Last, I want to briefly address the policy changes that 
Secretary Chu of the Department of Energy is proposing for 
Power Marketing Administrations, beginning with WAPA. Like the 
cooperative association represented by Mr. Jones, SRP would be 
directly impacted by the policy changes that Secretary Chu is 
pursuing, and I agree with his comments.
    I would just add that a primary concern to SRP is the 
proposal to create an energy imbalance market, or EIM, in the 
west. We are concerned that this would have a high cost and 
limited benefits while the industry is developing implementing 
a number of lower cost initiatives to help with the integration 
of variable generation. We think a better approach is to 
continue the implementation and improvement of these tools 
while continuing to study the potential of an EIM.
    Mr. Chairman and members of the Subcommittee, I want to 
thank you for this opportunity to come before you again and 
would be happy to answer any questions at the appropriate time.
    Mr. McClintock. Great. Thank you.
    [The prepared statement of Mr. Sullivan follows:]

   Statement of John F. Sullivan, Associate General Manager & Chief 
 Resources Executive, Salt River Project Agricultural Improvement and 
                             Power District

    Chairman McClintock and Members of the Subcommittee on Water and 
Power, thank you for the opportunity to submit testimony today. I also 
would like to thank Representative Gosar for his interest and 
involvement with the Committee on many issues important to water and 
power users in Arizona.
    My name is John F. Sullivan. I am the Associate General Manager and 
Chief Resources Executive of the Salt River Project Agricultural 
Improvement and Power District (Salt River Project), a political 
subdivision of the State of Arizona that provides retail electric 
service to more than 950,000 residential, commercial, industrial, 
agricultural and mining customers in Arizona. Salt River Project 
operates or participates in a broad portfolio of generating resources, 
including nuclear, coal, natural gas, hydroelectric and renewable 
facilities. Salt River Project also operates a water delivery system 
providing the primary water supply for an area of approximately 250,000 
acres that includes major portions of the Arizona cities of Phoenix, 
Glendale, Mesa, Tempe, Chandler, Gilbert, Peoria, Scottsdale, and 
Tolleson. Salt River Project appreciates the Committee's steadfast 
interest in issues important to Arizona and the Southwest, including 
the issues being addressed today.
    My comments today will address at least briefly a number of the 
issues identified by the Committee for today's field hearing because 
SRP is impacted by many of them. Of most immediate concern to SRP due 
to significant timing constraints, however, is the continued operation 
of the Navajo Generating Station (NGS), so I will begin by addressing 
that subject.
Navajo Generating Station
    Salt River Project is the operating agent and one of six 
participants in NGS, a 2,250 MW generating station located on the 
Navajo Nation just outside of Page, Arizona. As the Committee is aware, 
Salt River Project and the other participants are addressing and 
responding to numerous issues and challenges relating to the continued 
operation of NGS. Last summer, Mr. Richard Silverman, then General 
Manager of Salt River Project, testified before this Committee. Mr. 
Silverman's testimony is attached for the Committee's reference. 
Although I will not repeat his testimony to this Committee today, I 
want to reiterate several key points that remain of significant to SRP, 
and to summarize new information that we recently developed regarding 
the economic benefit of NGS.
    NGS provides critical baseload energy to meet each of its utility 
owners' customer needs year round, and plays a key role in Central 
Arizona Water Conservation District's (CAWCD) delivery of water to 
Native American communities, farmers, and cities in Arizona. NGS cannot 
be simply or easily replaced. Yet, the participants currently are faced 
with a set of complex issues that threaten the long-term viability of 
the plant. Those issues include the need for lease extension and 
rights-of-way renewals, and the negotiation of key agreements, 
including for coal. To address these challenges, Salt River Project has 
been working closely with Native American Tribes, water and power 
users, and other affected stakeholders to develop a resolution that 
will ensure the continued operation of this critical generating asset. 
We greatly appreciate our relationship with these stakeholders and 
their continued engagement in issues affecting NGS.
    Unfortunately, while Salt River Project has been working diligently 
to secure the necessary agreements to keep NGS in operation, the U.S. 
Environmental Protection Agency (EPA) has been working to develop a 
regulation that could put the future of NGS in jeopardy. This 
regulation, called the Best Available Retrofit Technology (BART) rule, 
could require costly additional emission control technologies for the 
purpose of improving visibility in nearby national parks.
    Emissions from NGS currently are controlled by hot-side 
electrostatic precipitators (ESPs), wet limestone scrubbers, and Low-
NOx Burners and Separated Overfire Air (LNB/SOFA). The ESPs 
and scrubbers reduce particulate matter by 99% and the scrubbers reduce 
sulfur dioxide emissions by more than 95%. LNB/SOFA, which were 
voluntarily installed by the NGS owners at a cost of $45 million, have 
reduced nitrogen oxide emissions by approximately 40%.
    The total cost of the additional controls under consideration by 
EPA as part of the BART rule is estimated to be between $550 million 
and $1.1 billion. However, SRP's modeling results suggest that the 
visibility improvement that would be achieved from installing such 
controls would be imperceptible to the human eye. As a result, SRP 
believes that LNB/SOFA is BART for NGS.
    In addition to EPA's BART rule, several other Federal actions also 
could put the future viability of NGS at substantial risk:
          The initial term of the plant site lease expires in 
        2019. The extension of the lease and related agreements will 
        trigger a review under the National Environmental Policy Act 
        (NEPA) and the Endangered Species Act (ESA). NEPA could require 
        the preparation of an Environmental Impact Statement (EIS). The 
        development of an EIS could take several years to complete and 
        the outcome of that process is uncertain.
          Recently issued regulations and potential future 
        rules that are yet to be developed or finalized also could 
        impact the future economic viability of NGS. These include the 
        recently issued Mercury and Air Toxic Standards (MATS), as well 
        as potential future regulations on coal ash, ozone, and 
        greenhouse gases.
    Although the NGS participants are committed to securing all of the 
agreements and completing the reviews necessary to ensure the continued 
operation of NGS, it would be difficult for the participants to justify 
an investment of potentially more than $1 billion for emission controls 
given the uncertainties that the plant currently faces. As several of 
the NGS participants articulated to EPA in a March 12, 2012 letter, if 
the EPA imposes a requirement to install the most costly additional 
emission controls as BART before the lease is extended, other 
agreements are reached, and the NEPA and ESA processes are complete, 
the continuing viability of the plant is at substantial risk. A copy of 
the participants' letter to EPA is attached.
    Given the significance of this issue, SRP and the other NGS 
participants have more recently been engaged in several studies to 
quantify the overall economic benefit of NGS to the state of Arizona, 
and to evaluate the potential economic impacts of the EPA's pending 
BART rule.
    The economic contribution of NGS is substantial. NGS has over 500 
employees, more than 80% of whom are Navajo. NGS and the Kayenta Mine, 
which supplies the plant with coal, employ almost 1,000 people, with a 
combined annual operating budget of approximately $500 million. The 
plant and the mine provide significant economic benefit to the Navajo 
Nation and the Hopi Tribe through employment, scholarships, lease 
payments, and coal royalties.
    NGS and the mine also provide far reaching economic benefits to the 
state of Arizona as a whole. Arizona State University's Seidman 
Institute recently conducted a study that found that NGS and the mine 
will contribute over $20 billion to Arizona's economy between 2011 and 
2044, and contribute over 3,000 jobs each year throughout the state.
    In addition to providing electricity for millions of customers in 
the Southwest, NGS also provides 95% of the power used by CAWCD to pump 
water from the Colorado River to central Arizona. It provides funds for 
the repayment of the cost of constructing the Central Arizona Project 
(CAP), and for water rights settlements with multiple central Arizona 
Indian Tribes.
    A study conducted by Harvey Economics, a consulting firm 
specializing in water resource economics, estimated that the shutdown 
of NGS could result in a loss of over $3.5 billion between 2012 and 
2044 to the economies of the Central Arizona Tribes that depend on the 
affordable water received through the CAP.
    Clearly, the closure of NGS would have far-reaching adverse 
economic impacts to the State of Arizona as a whole, and more 
particularly to Arizona's Indian Tribes. SRP continues to strongly 
believe that LNB/SOFA is BART for NGS and that a prompt decision by EPA 
is critical for the NGS participants to make appropriate plans moving 
forward.
Forest Health
    We are pleased that the Committee also is looking at forest health, 
which is important in ensuring we are able to deliver a dependable and 
reliable water and power supply. Salt River Project has a long-standing 
commitment to forest health and restoration, and I would like to 
compliment the Forest Service for its commitment to the Four Forest 
Restoration Initiative (4FRI or Initiative), an endeavor that is sorely 
needed to prevent further catastrophic destruction of Arizona's 
forests, in particular those forests that are part of Salt River 
Project's 13,000 square mile watershed. 4FRI provides the framework for 
implementing forest management actions that will result in a 
``natural'' ecological regime less likely to be devastated by wildfires 
to ensure the forests continue to provide recreational, economical, 
hydrological and biological value into the future.
    An important step in moving the Initiative forward was the Forest 
Service's recent award of a contract to begin mechanized treatments on 
the thinning of 300,000 acres of forest land in the Coconino and Kaibab 
National Forests. That action, which also supports job creation in the 
area, is welcomed by SRP and we hope is a step towards continued 
sustainable forest management practices.
    Yet, despite the proactive actions by U.S Congress, fire 
suppression and other management practices on the National Forest lands 
over the past one hundred years or so ultimately have resulted in 
unnaturally dense forest conditions. Such dense conditions result in 
unhealthy trees that are increasingly vulnerable to insect attack and 
diseases, which further increases the threat of catastrophic wildfires.
    Poor forest health and catastrophic wildfires impact the hydrologic 
characteristics of the watershed. Specifically, runoff and water yield, 
peak flows and low flows, erosion and sedimentation, and water 
temperature and chemistry are adversely impacted by unnatural forest 
conditions and severe wildfires.
    Northern Arizona University's Ecological Research Institute has 
partnered with Salt River Project to conduct field work, data 
collection and modeling to better understand the effects of the 
restoration program by comparing hydrologic and natural resource 
responses under alternative forest treatments. The effort will include 
in the field measurements and management analysis to provide empirical 
evidence and modeling data to compare control watersheds to those 
treated.
    Healthy forests correspond to healthy ecosystems and water 
resources, and are components of the public good that directly 
compliment Salt River Project's watershed stewardship responsibility. 
In addition to improving watershed health, forest restoration actions 
also protect Salt River Project investments in facilities and 
infrastructure, including C.C. Cragin reservoir, power lines and rights 
of way, and communication sites. We reiterate our commitment to working 
with this Committee, federal agencies and other stakeholders to work 
toward long-term forest health through active management.
Western Area Power Administration (Western) Issues
    Finally, I would like to briefly address two policies impacting 
Western operations and power customers. Salt River Project and numerous 
consumer-owned utilities in Arizona are Western customers and receive 
an allocation of power generated at Hoover Dam, the Colorado River 
Storage Project, and the Parker-Davis Project. These resources produce 
important clean and renewable power that benefits millions of customers 
throughout the west.
Secretary Chu Memo to PMAs
    On March 16, 2012, Department of Energy Secretary Chu sent a memo 
outlining a number of new policy goals for the Power Marketing Agencies 
(PMAs), including Western. Let me begin by thanking the members of the 
Committee for their support regarding this issue, especially 
Congressmen Gosar and Matheson for their leadership in the House on the 
forthcoming Congressional letter to Secretary Chu. This has truly been 
a bi-partisan effort.
    Like the municipal and cooperative associations represented by Mr. 
Jones, Salt River Project would be directly impacted by the policy 
changes Secretary Chu is pursuing.
    Our primary concerns relate to the proposal that Western 
participate in the creation of an automated Energy Imbalance Market 
(EIM) proposed for the Western Interconnection. An EIM is a sub-hourly, 
real-time, centrally-dispatched energy market intended to improve the 
integration of variable generation from renewable resources such as 
wind and solar. Salt River Project fully supports the development of 
renewable resources. We have a robust portfolio of renewable resources 
that includes solar, wind, biomass, geothermal and energy efficiency 
programs. Like Secretary Chu we want to see these resources reliably 
and efficiently integrated in to the grid. In fact, as a public power 
entity, we are obligated to ensure that our limited resources are spent 
wisely to ensure the efficient integration of these resources. It is 
this obligation that drives our concern about the desire to include 
Western as a participant in an EIM when the value of this approach is 
still in question. The economic studies to date do not make the case 
for the implementation of EIM across the west right now.
    The industry is developing and implementing a number of other lower 
cost initiatives to help with the integration of variable generation--
tools such as inter hour scheduling, dynamic scheduling service, area 
control error diversity exchange and implementation of low cost energy 
efficiency and demand-side management programs. We think a better 
approach is also studying the implementation and improvement of these 
tools while continuing to study the potential of an EIM. We are 
concerned that the approach advocated in the Secretary's memo is a rush 
to judgment that will increase costs for consumers without the 
commensurate benefits.
Glen Canyon Dam Operations
    Salt River Project also is affected by several recent actions and 
ongoing processes impacting power generation at Glen Canyon Dam. Last 
week, the Department of the Interior (DOI) announced that it may begin 
high-flow releases from the Dam beginning next fall and continuing 
periodically through 2020. Salt River Project and other beneficiaries 
of power from Glen Canyon Dam remain committed to improving habitat of 
native species on the Colorado River.
    In fact, power customers have agreements in place to fund a 
significant portion of the $626 million (in 2003 dollars) Lower 
Colorado Multi-Species Conservation Program.
    However, we are concerned that if the releases require moving water 
so that it is unavailable during a month when energy demand is high, 
and depending on the volume and frequency, it could cost power 
customers as much as $120 million over 10 years. As a not-for-profit 
utility, any increase in costs is passed through directly to our 
customers. In addition, the impacts of releases are highly complex and 
concerns have been raised about the revised operations benefiting non-
native species, which could in turn negatively affect endangered native 
species.
    Furthermore, Salt River Project is a cooperating agency in DOI's 
Long-Term Experimental Management Plan Environmental Impact Statement 
process. Launched in February of this year, this process will dictate 
the long-term operation of Glen Canyon Dam. Recognizing that power 
customers bear the economic consequences associated with major 
operational changes at Glen Canyon, Salt River Project believes that a 
balance evaluation of alternatives should be conducted. To date, 
however, Salt River Project and other cooperating agencies have not 
been included in meaningful participation, and we urge the Committee to 
continue oversight on this issue.
Summary
    In summary I would like to again thank Chairman McClintock, 
Representative Gosar and the Committee for your continuing support and 
interest on all of these issues. Because others also have addressed the 
other issues we discussed, I will close by emphasizing that complex and 
critical issues must be addressed, and resolved, in a timely manner to 
ensure that NGS continues to serve as an important economic driver for 
multiple stakeholders:
          For the state of Arizona, NGS and the mine that 
        supplies it with coal are expected to provide more than $20 
        billion in economic benefit for the state between 2011 and 2044 
        and to contribute more than 3,000 jobs each year throughout the 
        state;
          For the Navajo Nation and the Hopi Tribe, NGS and the 
        mine generate revenues that support government operations and 
        further economic development; and
          For the Central Arizona Tribes, NGS provides 
        assurance of affordable water received through the CAP, the 
        loss of which could result in a loss to their economies of over 
        $3.5 billion between 2012 and 2044.
    Salt River Project is working diligently with the NGS participants, 
the Navajo Tribe and a host of others to seek solutions to the complex 
issues faced by NGS, and we have reached consensus with stakeholders on 
many issues. Salt River Project is committed to continuing those 
efforts and to working with the multiple federal agencies that will 
play a role in the future of NGS.
    Chairmen McClintock and Members of the Subcommittee, Salt River 
Project appreciates your support and interest. Thank you again for the 
opportunity to testify before you today on these important issues. I 
would be happy to answer any questions.
                                 ______
                                 
    Mr. McClintock. Actually this is the appropriate time.
    I will start those questions in five-minute intervals. And 
I would like to begin with Mr. Jones and Mr. Sullivan.
    How many Arizona consumers do you serve?
    Mr. Sullivan. The Salt River Project serves 950,000 plus a 
few electric customers here in the metropolitan----
    Mr. McClintock. Arizonans and of course former Californians 
who are now Arizonans.
    Mr. Jones.
    Mr. Sullivan. Arizonans and former Californians. I am happy 
and proud to say I am a native myself.
    Mr. McClintock. Mr. Jones.
    Mr. Jones. Mr. Chairman, the electric cooperatives serve 
220,000 customers. That's homes, farms, ranches, businesses.
    Mr. McClintock. Well, what would be the impact on all of 
these customers if all the provisions of the Chu Memo are 
implemented?
    Mr. Jones. Mr. Chairman, for us that's a bit uncertain in 
that the Chu Memo itself is rather broad in terms of the 
objectives and goals that it lays out in the PMAs going 
forward.
    Mr. McClintock. We see exactly where they are going. Is 
this going to be good news or bad news for your consumers?
    Mr. Jones. It is hard to imagine that the results of the 
Chu memo would do anything but raise the cost of power to our 
consumer members, sir.
    Mr. McClintock. Mr. Sullivan, the same.
    Mr. Sullivan. I would agree. In the short term our 
estimates are that to implement just the early stages of this 
EIM program could cost as much as $60 million additional to the 
power customers in the inland southwest.
    Mr. McClintock. Now, Governor Mendoza, you said you were 
the biggest consumer of electricity from the Navajo Generating 
Station. We have been told that it would be a good thing to 
shut the station down. What is the impact to your folks?
    Governor Mendoza. Thank you, Mr. Chairman.
    Again, as I mentioned, without a mitigation plan, our 
community will suffer. Again, the health and future of our 
tribal people depends on our community being able to continue 
to cultivate our lands.
    Mr. McClintock. Now, by the way, the issue on the selective 
catalytic reduction technology, is that going--first of all, 
that's not a public health issue, as I understand it. That's 
strictly what the Left is calling a viewshed issue, correct?
    Governor Mendoza. Correct.
    Mr. McClintock. On haze. So this is not a public health 
issue. It is a viewshed issue.
    And what is the practical difference between the very 
expensive selective catalytic reduction technology advocated by 
a witness that is selected by the Democrats today and the 
actions that have already been taken on viewshed issues?
    Governor Mendoza. Again, you know, with regard to that, 
again, you know, the community----
    Mr. McClintock. Point blank, is it a difference that would 
be visible to the human eye?
    Governor Mendoza. No.
    Mr. McClintock. OK. So this is not a public health issue. 
It is not even a viewshed issue that a human eye can discern. 
So I, for one, have to conclude this is part of an ideological 
battle being waged by the radical Left that has no logic or 
reason to it. This is more religion than it is anything else.
    Governor Mendoza. Correct.
    Mr. McClintock. Back to Mr. Jones and Mr. Sullivan, 
actually Mr. Sullivan I think in this case. What would be the 
cost to consumers of additional Glen Canyon water releases to 
simulate spring floods?
    Mr. Sullivan. The estimate that I have seen would be $120 
million over a 10-year period----
    Mr. McClintock. To your consumers.
    Mr. Sullivan.--at a minimum to the consumers of public 
power that benefit from Glen Canyon Dam.
    Mr. McClintock. Wasn't it the spring flood releases that 
the dams were built to conserve for dry periods?
    Mr. Sullivan. That's correct. The dams were built to 
preserve water so that the compact between the upper basin 
states and the lower basin states of the Colorado River----
    Mr. McClintock. OK.
    Mr. Sullivan.--could be met.
    Mr. McClintock. So we have all of these spring floods that 
inundate the area, and all of that water then is not available 
in dry periods. We build dams to assure that we can save that 
water, conserve that for the dry periods. And now this 
Administration is releasing all of that water so that we don't 
have it to store in dry periods. Is that essentially what is 
going on here?
    Mr. Sullivan. I think the Chairman has the story straight.
    Mr. McClintock. You know, sometimes I wonder if we are not 
dealing with the lunatic fringe of our society and at the 
moment they are in charge of our public policy.
    Let me ask you. To your knowledge, Mr. Jones, probably more 
up your alley, have we yet invented a more expensive way to 
produce electricity than solar power?
    Mr. Jones. Mr. Chairman, I believe that's an accurate 
statement, yes. It is quite expensive.
    Mr. McClintock. We are told we can replace coal 
electricity, which is one of the cheapest ways of generating 
electricity, with solar, which is the most expensive, and 
somehow consumers will be better off. Can you supply me with a 
wiring diagram of that logic? I don't get it.
    Mr. Jones. We have not been able to solve that one either. 
We are under a requirement in Arizona, the electric 
cooperatives along with the investor owned utilities, to have a 
certain percentage of our portfolio resources come from 
renewable energy. And we are finding that to be a challenge to 
work that more expensive resource into our rate bases.
    Mr. McClintock. By the way, we have a very ambitious one in 
California, and the result is we have among the highest 
electricity prices in the continental United States and the 
lowest per capita consumption of electricity not only among all 
of the states, our per capita electricity consumption is now 
lower than Guam.
    Mr. Jones. Correct, Mr. Chairman. But on the bright side, 
you do have a whole host of other states trying to find ways to 
sell you high cost power.
    Mr. McClintock. Now I am in debt for 53 seconds.
    Dr. Gosar. You get a reprieve for a second.
    You know, before I start my questioning, I would like to 
submit for the record testimony from Arizona Representative 
Brenda Barton. Representative Barton is one of my constituents 
who lives in the area. And she serves on the House Agriculture 
Water, House Energy and Natural Resources Committee, and is a 
strong advocate on behalf of rural Arizona.
    Mr. McClintock. Without objection.
    Dr. Gosar. I would also like to reiterate Chairman 
McClintock's offer to folks to submit their testimony for the 
congressional record. We would have loved 30 witnesses, but 
there is just not time and energy for. So please reach out to 
my office. We will make sure that your testimony is included 
into the record.
    Mr. Sullivan, so just let's reiterate this. Is there any 
replacements for the Navajo Generating Station, renewable or 
traditional?
    Mr. Sullivan. That's a difficult question. There are 
alternatives. None are really base-load alternatives. What----
    Dr. Gosar. What do you mean by base-load, sir?
    Mr. Sullivan. A resource that's available 24 hours a day, 
365 days out of the year.
    Dr. Gosar. So if we were to take a solar project or an 
alternative energy project like wind and solar, are those 
considered base loads?
    Mr. Sullivan. Those are renewable resources. Like solar and 
wind are not base-load. They are intermittent in nature. Even 
the folks from St. Johns, Arizona will say every once in awhile 
the wind stops. And we have 128 megawatts of wind power in the 
St. Johns, Winslow area.
    We also are proud to have a number of solar projects. They 
run very, very well in Arizona, but only from about 10:00 in 
the morning until 3:00 in the afternoon. So we like our air 
conditioning in Arizona. So 10:00 at night, we would still like 
to have energy sources, base-load resources to take care of 
that.
    Dr. Gosar. So if you were to take a solar alternative type 
of mechanism to replace Navajo Generating Station, how many 
thousands of acres would it take to cover?
    Mr. Sullivan. I do not know exactly. I have seen the 
number. It is thousands of acres.
    Dr. Gosar. That's what I thought.
    Governor Mendoza, the solar project that you mentioned, it 
sounds like a great project. And regardless of the NGS issue, 
we are certainly happy to help you. We are very aware of all 
the Federal barriers to all that development.
    The NGS is really the only option in the short term to pump 
the CAP water. If the EPA mandates the SCRs as the best 
retrofit technology, the effects would be devastating to your 
tribe and other Arizona tribes, is that true?
    Governor Mendoza. Yes.
    Dr. Gosar. So this is a huge issue with the tribal 
obligation of Congress, right?
    Governor Mendoza. Correct.
    Dr. Gosar. And the jurisdiction is Congress and Congress 
only?
    Governor Mendoza. Yes.
    Dr. Gosar. Thank you.
    Representative Reeve, according to the ADEQ and your 
Committee's work, SCR would have negligible environmental 
effects and unproven visibility improvements. DOE's NREL study 
backs that as well, does it not?
    Ms. Reeve. I believe so, yes.
    And I have to answer, if I may, Chairman McClintock's 
question earlier. Director Eric Massey of the ADEQ from the air 
division has said that you measure the units, visibility is 
measured in units called deciviews. And the lowest level of 
change perceptible to the human eye is perceived between .5 and 
1 deciview. He notes that some studies with the SCR technology 
the EPA favors have shown less than .05 deciview change, 
meaning the human eye doesn't register the difference. So I 
think that answers both your questions.
    Dr. Gosar. Let's take it a step further. So you know where 
the plant is compared relative to the canyon; would it have 
really impacted the canyon, especially when you look at air 
currents?
    Ms. Reeve. No.
    Dr. Gosar. And doesn't the DOE's evaluation actually show 
that?
    Ms. Reeve. I believe so. I would have to look at that.
    Dr. Gosar. Most Arizonans remember air moving from 
southwest to northeast. That would be a Colorado problem. And 
the remainder or the majority of the time it is from northwest 
to southeast, which would be a New Mexico problem.
    So maybe really our problem is from you, from California. 
Sorry about that.
    Mr. McClintock. Don't let that happen again.
    Mr. Schweikert. Will the gentleman yield for a second?
    Dr. Gosar. I would be happy to yield.
    Mr. Schweikert. I think most of our problems are from 
California.
    Dr. Gosar. So----
    Mr. McClintock. Most of your water, too.
    Dr. Gosar. So if the EPA requires the SCRs, they would make 
it a mandate that would have negligible environmental and 
visibility effects, that would wreak havoc on our state's 
economy, threaten the water security of fifth and 32nd largest 
cities in the country, devastate multiple tribal agricultural 
and mining economies, undermined Federal Government's ability 
to meet its obligations under current water settlements and 
public view in future settlements, I am not so sure what the 
EPA defines as best, but clearly SCRs are not the best retrofit 
technology. The best, the current technology at the Navajo 
Generating Station is the best retrofit technology.
    What we have to do is we have to base it on science. I am a 
science guy. And we can't be basing it on theoretical science. 
And that's part of the problem we see here over and over, is 
the Federal Government advocating to junk science.
    And with that, I will catch back up on some of my allocated 
over allotment.
    Mr. McClintock. Put the rest of us to shame.
    The Chair is now pleased to recognize Mr. Schweikert for 
five minutes, or thereabouts.
    Mr. Schweikert. We shouldn't let him have any caffeine. He 
is like a machine gun.
    And I said this in our opening statement. I sort of feel 
like I am in the time warp machine because many of the 
arguments seem to, you know, resurge or come back, you know, 
every few years.
    Governor, and you and I have had this conversation, but I 
want to make sure I completely have my head around it. You are 
the largest user of allocated CAP----
    Governor Mendoza. That's correct.
    Mr. Schweikert.--today?
    Governor Mendoza. Yes.
    Mr. Schweikert. If your costs change substantially, A, how 
does that affect your community, but, also, how do you think it 
affects--how would you and your legal team and the community 
you represent feel that affects also the compacts or the water 
settlement agreements?
    Governor Mendoza. Well, again, as mentioned, without that 
plant our community will suffer. Again, we are, we are still 
suffering as a consequences of this illegal taking of our 
water. But using our settlement water to refocus, again, our 
way of life back to our agriculture and traditional foods, our 
access to affordable CAP water that was guaranteed to us in our 
2004 law is critical to the long-term health of our, of my 
people.
    Mr. Schweikert. Would you, and I will ask from a personal 
level, would you consider that if all of a sudden that water 
got dramatically more expensive that we are now in violation of 
that settlement?
    Governor Mendoza. Yes, yes.
    Mr. Schweikert. And how many years did it take to get to 
that settlement?
    Governor Mendoza. Oh, wow, many years. Many of my former 
leadership have been involved in this for years.
    Mr. Schweikert. Would you both--would you agree it is older 
than you and I are?
    Governor Mendoza. Yes, yes.
    Mr. Schweikert. And we are getting old.
    Senator, and you put up one of my very favorite maps, years 
ago we were trying to work on the calculation of saying if only 
13 percent of the population, or of the acreage can be 
privately held, how much of that actually has water rights, and 
is it a mountaintop or others. We were getting down to around 8 
percent of the state's acreage that was truly usable.
    There is a bit of a movement starting to take off in parts 
of the west where the discussion is could we put much of this 
public lands under a single management regime, maybe a state 
based one.
    From your, because I know this is one of your areas of 
specialization, would you be ready to take that on at an 
Arizona level?
    Ms. Griffin. My letter to Santa Claus would be for the 
state to take over for the public lands.
    Mr. Schweikert. Because when you consider Forest Service, 
BLM, Bureau of Reclamation, the list just goes on and on.
    Ms. Griffin. I would be happy to tackle that and address 
that. I would be most interested in doing that.
    Mr. Schweikert. OK. And forgive me, but, I am embarrassed, 
but I can't even read your names without my glasses. Is it 
Nicole?
    Ms. Horseherder. Yes.
    Mr. Schweikert. Pronounce your last name for me.
    Ms. Horseherder. Horseherder.
    Mr. Schweikert. OK.
    Ms. Horseherder. Just the way it is spelled.
    Mr. Schweikert. I couldn't see that.
    I saw in your testimony you were speaking of asthma. How 
much statistical modeling--and this is one of my personal 
fixations, because we often will throw out saying we have this 
experience rate. But do you know if it has been truly 
statistically modeled for both a regional national means or is 
that just sort of what you are finding, you know, on Black 
Mesa? I mean, how much study has truly gone into those numbers?
    Ms. Horseherder. Which particular statistic are you 
referring to?
    Mr. Schweikert. You spent some time throwing out, saying we 
are seeing higher asthma rates. And I am a rather severe 
sufferer of asthma, you know, growing up here in the valley.
    But I bounce off the walls, because at first I was a 
quantitative major, and I find people throw out numbers and 
they don't understand the modeling that actually goes into the 
facts. And I am just--you threw out the number, so I was 
looking for the statistics layout.
    Ms. Horseherder. OK. So one bit of information, one bit of 
statistic is from the Indian Health Services, which covers a 
pretty broad area----
    Mr. Schweikert. OK.
    Ms. Horseherder.--on the reservation. But the statistics I 
mentioned in specifically here in my testimony was based on a 
questionnaire that was done in the region of the NGS.
    Mr. Schweikert. But a questionnaire model is not real 
facts.
    Ms. Horseherder. It is the best that we have. I am sorry.
    Mr. Schweikert. OK.
    Ms. Horseherder. Yeah, if we could compel some agency to 
take on that study, I would bet that it would be similar.
    Mr. Schweikert. And I know I am out of time but it is one 
of my actual fixations. I find in Washington particularly they 
make public policy on folklore instead of true, truly vetted 
data.
    Mr. Chairman, I yield back.
    Mr. McClintock. Thank you, gentlemen.
    I would also point out McClintock's second law of political 
physics is also at work in that folly. And that is the more we 
invest in our mistakes the less willing we are to admit them.
    And on that very subject, I just want to hammer home the 
point that Mr. Gosar began with Mr. Sullivan. And that is wind 
and solar, you say, do not add to baseline power. We have to 
constantly have backup supply for that unpredictable moment 
when the wind suddenly drops off or a cloud passes over an 
array or the sun sets on the western horizon as it is wont to 
do from time to time, is that correct?
    Mr. Sullivan. That is correct, Mr. Chairman.
    Mr. McClintock. So we not only are dealing in the case of 
solar with the most expensive way we have ever invented to 
produce electricity--after 170 years, by the way, of 
technological advancement and innovation and God knows how much 
in taxpayer subsidies--we start with the most expensive 
possible way of producing power, we then on top of that have to 
have backup supply immediately ready.
    Now, how do you do that with a turbine generator for 
example? How do you keep that ready at a moment's notice to 
kick in to maintain the integrity of the grid?
    Mr. Sullivan. There are several ways that we maintain 
readiness, as you would put it.
    Mr. McClintock. Don't you have to run the boilers?
    Mr. Sullivan. We maintain spinning reserves. So we have 
units that are not fully----
    Mr. McClintock. So you are running----
    Mr. Sullivan. So----
    Mr. McClintock.--all this generating capacity?
    Mr. Sullivan. Right.
    Mr. McClintock. So you are just not getting any generation 
out, is that correct?
    Mr. Sullivan. Right. So we are burning fuel. We do that 
also in case we lose a generating unit. The other thing we have 
done is invested in a rapid response gas turbine plant in Pinal 
County----
    Mr. McClintock. Right.
    Mr. Sullivan.--where we can have----
    Mr. McClintock. But the more----
    Mr. Sullivan.--quick start capacity.
    Mr. McClintock. The more wind and solar you add to the grid 
the more you have to do this, correct?
    Mr. Sullivan. That's correct.
    Mr. McClintock. Now, who is paying for all of this, this 
second ready-to-go backup supply?
    Mr. Sullivan. The customers of the utilities that benefit 
from the solar.
    Mr. McClintock. So you are now paying the most expensive 
way to generate electricity on itself. They are then paying for 
additional backup because that process is intermittent and 
unreliable and you have to maintain the integrity of the grid. 
Then we are told, oh, well, we need to modernize our 
transmission lines. Well, we are not actually talking about 
modernizing transmission lines. We are talking about replacing 
existing transmission lines with high tension direct current 
lines because that's the only way to transmit solar generated, 
wind generated electricity over any kind of considerable 
distance because of the low output of these facilities.
    Mr. Jones, is that correct?
    Mr. Jones. Mr. Chairman, the short answer to that would be 
yes.
    Mr. McClintock. Mr. Sullivan, do you agree?
    Mr. Sullivan. It depends. In our particular case, we have 
been able to integrate the intermittent resources without major 
additions to our transmission. We have taken a little different 
approach.
    Mr. McClintock. But when the Chu Memo calls for----
    Mr. Sullivan. The Chu Memo calls for----
    Mr. McClintock.--high tension----
    Mr. Sullivan.--large changes. We don't believe those are 
required.
    Mr. McClintock. For you, but they are required obviously 
for remote locations where most of the solar arrays and wind 
generators are located.
    Now, when Mr. Chu's memo says that general ratepayers, for 
example those whose rates have already paid for our existing 
hydroelectric facilities, are now going to have to cough up the 
money for this, too, what does that do to their electricity 
bills?
    Mr. Sullivan. Unless the Federal Department of Energy comes 
up with a way to spread these costs over the general 
transmission users, it would fall on the public power 
customers, both co-ops and public agencies, that currently pay 
for those transmission facilities.
    Mr. McClintock. OK. So you have the cost for these, these 
most expensive ways of generating electricity, plus all the 
backup power, plus the special high tension direct current 
lines to transmit this electricity. Is any of this broken down 
in the bills for consumers? Can they actually see the costs 
broken down that they are paying for this ideological program?
    Mr. Sullivan. It depends on the utility. Some do break it 
down and have a number of escalators. In our particular case, 
we have an escalator much like a fuel escalator. When natural 
gas prices go up and down, we have an escalator for 
environmental and renewable portfolio activities.
    Mr. McClintock. Well----
    Mr. Sullivan. So it is----
    Mr. McClintock.--I will tell you in California my bills 
certainly don't break that down. I don't think the bills of 
most consumers break that down. In fact, that's the way that 
the advocates get away with claiming, oh, this is very cost 
competitive. It is only because we have hidden the true costs 
in other people's electricity bills or on their tax bills.
    Mr. Jones, was that the other people's money that you were 
referring to?
    Mr. Jones. Somewhat, yes, Mr. Chairman. We do show in 
Arizona on customer bills for electric co-ops the amount of 
surcharge on the bill that's authorized by our public utility 
commission for renewable energy. It is the RES surcharge. So we 
are trying to give consumers an indication what those costs 
are.
    But, yes, we are very concerned that the historical ``pay 
as you go, beneficiary pays'' methodology that has been used 
with the PMAs is at risk under the Chu Memo and that we are 
going to be faced with paying for costs of items that, frankly, 
we either see no benefits for or, even if there are benefits, 
may not be those that would directly affect the consumers but 
be there for other purposes.
    Mr. McClintock. Thank you.
    Mr. Gosar.
    Dr. Gosar. Well, thank you, Chairman.
    Before I start my questions again, I would also like to 
take a chance to thank the staff, because you can't have 
meetings like this without the help of the endless work of the 
staff: Daniel Briggen, Kyle Briggen, Rose Estes, Daniel Frank, 
Adrianne Luff, Ryan Omay, I am probably saying your name wrong, 
Clarissa Wright, Jason Fitzpatrick, Ron Geld, and Dan Nichols. 
So thank you so very, very much for helping us out with that.
    You know, I want to make sure that we get in some pretty 
good facts here. The NGS produces enough power to be a large 
nuclear power plant. That's how much power we are talking 
about, enough power for 2 million homes. What we are looking at 
in renewable type energy is still experimental. There are 
things that actually still work but there are a lot of things 
that still have to happen. We have photovoltaic. And we have 
also got mass types of solar collectors, what we are seeing 
here in Abengoa in Gila River.
    Those are the pursuits we ought to have. And I think what 
we have to look at here is all the above energy policy. No one 
is dispelling solar and wind power and hydropower. In fact, 
myself and Congressman Tipton actually looked at empowering the 
small conduits, the Cal systems, by using small hydropowered 
systems that actually generate, increase the number of 
megawatts toward locales where you have elevation drops which 
feeds the water going through. These are the conscientious 
aspects of how we ought to be looking at our energy policy.
    And then the last part that I also want to make mention is 
the beneficiaries of utilizing our natural resources in this 
state is education. We lose that so many and so often, is that 
the educational system actually benefits from the dollars 
generated. So we ought to be using this beneficially and 
worthwhile.
    Mr. Groseta, I want to touch base with you in here because 
this is also about looking at your natural resources.
    You know the Wallow Fire. It took us almost $400 million to 
put that fire out, money we don't have. And we lost $2.5 
billion, with a B, of board feet, of habitat and trees. You 
know, we actually brought down a portable mill and we have yet 
to cut one single tree out of salvage. In fact, we have locked 
a lot of the forest up, have we not?
    Mr. Groseta. That is correct, Congressman Gosar. As I 
shared, we are in an analysis-paralysis litigation gridlock. 
Two particular acts, Endangered Species Act and National 
Environmental Policy Act, they have been manipulated and 
massaged over the years to use these tools to inhibit progress 
to go out and harvest timber, to go out and harvest forage on 
our national forests. And as long as our national forests are 
continued to be managed in the name of protecting the Mexican 
Spotted Owl and the Goshawk, both of those require highly dense 
old growth trees, we will continue to be in this predicament. 
So----
    Dr. Gosar. I want to touch base with you on that. So in the 
Wallow Fire, what percent of the Spotted Owl habitat did we 
lose?
    Mr. Groseta. I am told that half of the habitat for the 
Mexican Spotted Owl burned up and went up in smoke.
    Dr. Gosar. And isn't it also true that we lost half that 
population?
    Mr. Groseta. That's correct.
    Dr. Gosar. Wow. We really won on this one, just really won. 
Plus I wonder how many of the gray wolves we also lost, too.
    Mr. Groseta. I don't know the number, but there were 
several species that we lost during that fire.
    And also, in addition to that, I would like to just, for 
the point of the record, I have submitted photos, two pages, to 
each one of you up there. This is pictures of dead fish on the 
San Francisco River. And this happened last summer after the 
big fire, the Wallow Fire that you alluded to. After we started 
to have our summer rains, the monsoons that we have here in 
Arizona--that fire was so hot that it just, it burned and 
sterilized the soil. It actually was just barren landscape. And 
all of the ashes, once we received the summer rains, we not 
only had soil erosion problems but look what--we were talking 
about the Spotted Owl and the Goshawk--but look at what it did 
to the fish.
    Dr. Gosar. Yes.
    Mr. Groseta. Look at all the dead fish in the San Francisco 
River. These photos, all four of these photos were taken late 
July of last year after the summer rains starred northeast of 
Safford, Arizona.
    So we not only talk about we are not only losing the 
species we are trying to protect up there, but we are also 
losing owls, we are losing fish. And the bottom line is the 
status quo is not working and we need to change the management 
on these lands in order to get to go out and harvest the 
resources. We have the world's richest----
    Dr. Gosar. And I agree----
    Mr. Groseta.--resources here in this state.
    Dr. Gosar. I agree with you on that one. Let me ask you 
another question. There is also complications from windmills. 
Do birds have problems with windmills? What is one of the 
biggest killers of migratory birds? It is actually windmills.
    Mr. Groseta. Wind machines.
    Dr. Gosar. Wind turbines, absolutely. And actually we are 
finding out about wind turbines that we actually create 
microclimates.
    Mr. Groseta. That's correct.
    Dr. Gosar. They actually create microturbidity that planes 
are affected by. So there is a lot of consequences here.
    I have one more thing here. I know, Ms. Griffin, you know, 
up in Flagstaff we had the Schultz Pass Fire, a disaster. We 
are going to still have ramifications with this over and over 
again. We have a flooding issue because, you know, of that 
mountain, San Francisco Peaks, this volcanic cone has got 
projections about 45 degree angles. So when water comes off of 
this, it flies. That's why we lost a little girl.
    That's what is so sad about this. We could have had 
solutions here but were prohibited. Do you realize--and I, 
really, this is my last comment--it is going to be awhile 
because we just broke ground on the Schultz Pass Fire amendment 
for fixing the pipeline from the inner basin, that's how sad 
this is, and we are still talking about, and the words have 
been, condemning private property.
    How do you feel about condemning private property, ma'am?
    Ms. Griffin. You saw the map. We have very little private 
property there. I believe the state and the people in Arizona 
can manage our public lands better than the Federal Government. 
We can do it cheaper, more effective, and immediate. It is 
going to take a long time to take care of the devastation that 
has occurred because of the fires. But it is, and it is 
moonscapes out there. The wilderness areas in my area, they are 
all gone. I had pictures of bear and deer and different animals 
that are--it is a moonscape, you know. They are cinders.
    Dr. Gosar. You are exactly right. And I want to say, you 
know, because of that map that you saw up there, the Federal--
the western states get less than one half of what eastern 
states get in educational funding. And we have to rely on PILT 
and secure rural schools, which we have to beg, plead and steal 
from to try and get. And this is a mechanism and a way that we 
should be getting back the authority for the states.
    I want to thank the Chairman for allowing me a little extra 
time. And thank you for coming out today to see why Arizona, 
why we wanted to bring these issues to point and center in 
Arizona.
    Mr. McClintock. Oh, Mr. Gosar, it is a genuine pleasure. 
Misery loves company, and many of the problems that you have 
talked about here today we have been suffering in my district 
in the Sierra Nevada as well.
    Mr. Schweikert.
    Mr. Schweikert. I don't think he actually gave you the 
extra time. I think you just took it.
    Dr. Gosar. I did.
    Mr. Schweikert. Andy, I want to throw from--and this is one 
of my personal fixations. I actually think a lot of the 
litigation, a lot of the things you see out there, it is about 
money. You know, when equal access to justice and those 
mechanics, we have incentivized not decision making, we have 
incentivized law firms to, hey, this is a book of business, 
let's sue. And it has been a decade since I last asked this 
question, but we had someone in front of us from the Forest 
Service who was telling us almost half the regional budget was 
going into some litigation or litigation preparation or 
mechanics.
    Would you disagree with me? Am I, I mean, am I off base?
    Mr. Groseta. No, I agree with you, Congressman. We 
definitely need tort reform. It is big business.
    Mr. Schweikert. Well, actually some of this is less even 
than tort reform. You actually redesign the statute saying, 
instead of funding a bunch of lawyers, let's actually use the 
money to actually fund plans that actually work. Personal 
opinion. If any of you are lawyers, I am sorry if I offended 
you.
    Mr. Mayor, you, in your testimony you sort of, you spoke of 
trying to take part of your community and turning it into an 
alternative energy hub. A noble effort. Have you actually sort 
of modeled how much of that is going to require subsidies, 
specialty line items, credits and cash and those things from 
the Federal Government for that to actually work?
    Mr. Von Gausig. Yeah. Actually the plans Clarkdale has and 
the way we have looked at it so far don't require any at all. 
They would all be private-public partner ships based on various 
kinds of efficiency that are gained by the improving 
technologies that we have out there.
    Mr. Schweikert. Wonderful. It is one of the things I will--
from a policy maker's standpoint, as you know, we often hear 
the rhetoric about, well, we subsidize fossil fuels, which 
isn't actually accurate. The depletion allowance, that is 2.4 
billion, there is almost 9 billion a year that goes into green 
energy, so green energy gets about three times more than fossil 
fuels. So, and my guess is, with the pending fiscal crisis that 
is coming very fast, that whole world is going to change. So 
from a personal standpoint, please be careful in public-private 
partnerships. I mean you saw how well it worked in Ireland.
    Mr. Sullivan, a tough question. SRP, you do your modeling 
and your capital planning five years? Ten years? 50 years? When 
you do a capital plan for your generation for your delivery, 
how far out are you planning?
    Mr. Sullivan. Typically for our generation plans we look 
out 15, 20 years. In terms of our financial plan, we do 
detailed financial planning looking out six years.
    Mr. Schweikert. In that planning, how do you do that 
modeling, that planning in this environment where, you know, 
Navajo Generation's capacity may be in play, you know, low 
yield generation coming from alternative energy? I mean, are 
you having to do an A, B, and C plans? I mean, how are you 
modeling?
    Mr. Sullivan. Typically we do a lot of scenario planning, 
so with/without Navajo going forward.
    We also participate in the Four Corners plant. So we have 
to factor in the future of the Four Corners generating station, 
whether it will be there once that plant gets through the 
environmental process.
    And then in terms of our renewables, our board has 
established both an energy efficiency and renewable standard 
combined for us, a sustainability portfolio. And our view is 
you have to have a balance. Representative Gosar talked about 
that.
    That's how we try to approach our future resource planning, 
is a balance of renewables that we can adjust for as we move 
forward, a balance of energy efficiency, and then a balance of 
traditional, mostly nowadays natural gas resources.
    Mr. Schweikert. Mr. Chairman, Mr. Sullivan, in the models 
you have done, let's just take the five year, best case 
scenario for a ratepayer is what, and worst case scenario? You 
know, how big is the spread right now?
    Mr. Sullivan. Well, what we don't do is factor in rate 
increases or price adjustments. What we do look at is, as we go 
out in time, how big a deficit are we building that would have 
to be made up by our customers. So I can't answer your question 
exactly----
    Mr. Schweikert. OK.
    Mr. Sullivan.--today. But it would be quite a spread. It 
would be a large spread if you look out five years without Four 
Corners or Navajo in our resource plan. It would be a very 
expensive plan for our customers.
    Mr. Schweikert. Thank you, Mr. Chairman. Thank you, Mr. 
Sullivan.
    Mr. McClintock. You are very welcome. And we are going to 
go to one final round, mainly because I owe the till about a 
minute and a half and Mr. Gosar owes two. So between me and 
ourselves let me have two quick questions.
    First to Mr. Governor Mendoza. You painted a compelling 
picture of the economic devastation that imposing SCR 
technology on the Navajo Generating Station will have on your 
community. Yet we are told by a representative of the Navajo 
that the Nation welcomes shutting it down. Why should we 
believe you?
    Governor Mendoza. Well, again, you know, again, you know, 
the community would support any pragmatic solution about this 
issue. Again, it is, it protects the rights of our community 
and it does not jeopardize our water settlement.
    Again, with regard to having the access to affordable water 
that was guaranteed to us in our 2004 water settlement law is 
critical to our community. And if we lose access to affordable 
CAP water, we won't be able to help cultivate our lands for our 
community.
    Mr. McClintock. Thank you.
    Final question to Senator Griffin and Representative Reeve. 
What can you advise us, what should the Federal Government be 
doing to spur the economic and natural resource development of 
Arizona?
    Ms. Griffin. Get out of the way.
    Mr. Schweikert. Sort of to the point.
    Mr. McClintock. Representative Reeve.
    Ms. Reeve. There is a reason that we have state primacy on 
certain issues. And they should allow the state to, to do what 
we are doing.
    I mean we have things in place. We are, you know, ADEQ is 
doing a very competent job on these air issues. And yet we are 
being cut at the knees right now with the regional haze rule in 
particular. They should allow the states to do what we know--
you know, we know this area better than they do because we live 
here. And that's why there is such a thing as state primacy. So 
they should work at least with the states if nothing else, but 
yes.
    Mr. McClintock. Thank you very much. I yield back my three 
minutes and I am square.
    Mr. Gosar.
    Dr. Gosar. Well, Ms. Horseherder, let me ask you a 
question. Has the life expectancy of the Navajos increased or 
decreased over the last century?
    Ms. Horseherder. The life expectancy has probably increased 
in the last century.
    Dr. Gosar. Governor Mendoza, has the life expectancy gone 
up or down on the Gila River Community?
    Governor Mendoza. It has gone down.
    Dr. Gosar. The life expectancy?
    Governor Mendoza. Yes.
    Dr. Gosar. OK. Is it part of--what would you attribute that 
to?
    Governor Mendoza. The health, the health of our community. 
Again, you know, when the waters of our community were diverted 
illegally, our tribal members had to change their diets to one 
of cheap processed foods. And, of course, it devastated our 
community, because, as you know, we have the highest rate of 
diabetes in the world. So, again, you know, the water was the 
blood line to our culture.
    Dr. Gosar. So the other thing I want to make sure we 
understand is that almost half of the water that Phoenix 
utilizes comes from CAP water, almost half, 45 percent. And 80 
percent of the water that goes to Tucson comes from CAP water.
    So I guess what my hearing--what I am trying to get at here 
is this is not an option to shut the Navajo Generating Station 
down. There is not an option here, just absolutely not an 
option. What we have to do is start building upon science, real 
science, a science that is based by facts. What I mean by that 
is, is that I provide the criteria, or you provide the 
criteria, and I can go replicate your results. That's why 
surveys don't work.
    I am a healthcare professional. Surveys are only an 
inquisition into maybe a problem, and that you have to follow 
it up with scientific study. That's one of the things that I 
have to tell you, is we have to start basing our discussions 
not on scare tactics but on real data, real data.
    Now, the other thing that I also want to make sure is that 
today I know the Navajo Nation person said that they were 
against the Navajo Generating Station. That's not what the 
tribal council and the president has advocated for. They have 
been in front of us advocating for not shutting it down. So 
those are things we want to make sure that those viewpoints are 
poignant and perfectly legit.
    I think one of the things that I would hope, and I am a 
dentist impersonating a politician, is that what we have to 
start doing is start working together. I am tired of the 
Federal Government picking and choosing winners and losers. We 
need to have everything on play. And the magic of America is 
its beauty to investigate and invigorate and create. That's why 
we are here today and that's why we share in the economy that 
we so do. And we need to get the Federal Government out of the 
way.
    And I think what we saw today from the NGS to the Chu 
Memorandum to the forest dictations to how we use Federal 
lands, it is obvious we have a problem. And the way I look at 
it is when there is disarray is the greatest opportunity for 
change.
    So I hope that we work much better together than working 
against each other, and not to pit one solution over another.
    So I thank everybody for coming today. It has been an 
absolute pleasure. It is so great to see everybody in 
attendance, even Bass in the back. But thank you very much 
Chairman for having us.
    Mr. McClintock. Thank you for inviting us.
    And final words to Mr. Schweikert.
    Mr. Schweikert. Thank you, Mr. Chairman.
    And I know the Chairman is going to make a motion to accept 
additional testimony. If anyone has information in writing, 
please give that to us. It will get read. One of the joys of 
having a five-hour flight is we get on that airplane with 
binders like this. And this is sort of like graduate school on 
steroids. You often sit there and read things that were never 
in your area of specialty.
    I do have some mechanical concerns, because I know part of 
our focus has been on Navajo Generation, part of it is on what 
it does to our water resources, but the issue here, if you even 
look at each of you on the panel, I believe each of you care 
passionately, but those of us in the west, it is our public 
lands, it is how we manage our resources.
    You have to take a step back and take a look. 30, 40 years 
ago, was our forest healthier or less healthy today? Where are 
we at? I remember going up to Round Valley and watching forest 
harvesting. We don't do it today. Are those lands actually 
healthier today?
    And to our mayor friend, I actually as a young man spent a 
bunch of my summers in your community, have some--used to have 
family, they have all passed, that lived there. I hope--I wish 
you great, great success. You may want to do a little bit of 
research, because I think there were a couple communities in 
Iowa that, about a decade and a half ago, were going to become 
the ethanol capitals of the world. So always be very careful 
how you build your financial structures on, is it truly 
sustainable, particularly as we go through--the reality is we 
are devastatingly broke and it is getting bad really fast. You 
know, as baby boomers retire, I don't think people understand 
what is going on with the Federal deficit and how fast it is 
going to grow.
    But within that, to all of our members of the Legislature, 
there might be an opportunity here where, if we can deal with 
the egomaniacs back in Washington and maybe say let's treat the 
states like adults, let's hand you back some authority because 
maybe managing the resources closest to the resources would be 
best for the citizens of the states and best for the lands and 
the critters that live on those lands, I know that's a bit of a 
diatribe, but that is our future. So that was why the question 
about do we now have the talents and the data and the ability 
to manage those data and talents, because I think a lot of the 
authority is going to have to come back over the next few 
years.
    And with that, Mr. Chairman, thank you for being here in 
Arizona with us.
    Mr. McClintock. Again, a genuine pleasure. I want to thank 
all of you for coming here, thank our witnesses.
    As Mr. Schweikert said, the Subcommittee will be receiving 
additional written testimony. So if there is anyone here that 
would like to weigh in on this, that would be the opportunity 
to do this. The hearing record will be open for ten days to 
receive those responses.
    And if there is no further business and without objection, 
the Subcommittee stands adjourned.
    [Whereupon, at 11:51 a.m., the Subcommittee was adjourned.]

                                 
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