The APS-owned Childs-Irving Hydroelectric Project west of Strawberry is up for relicensing, and it may be the first hydropower dam system in the state to be forced from service.
APS applied for a 30-year license renewal from the Federal Energy Regulatory Commission in 1991. After seven years of filings, reports, studies and negotiations, the company is nearing the end of the process.
It is a process that all dams go through, large or small, in which the commission looks at the effectiveness of the utilization of water.
The commission is expected to release its findings in mid-or late-1999, but there is some question on whether the renewal will be approved.
The agency earlier this year refused to renew the license for Edward Dam in Augusta, Maine.
Interior Secretary Bruce Babbitt said at the time that, although many hydropower dams are useful, "some are obsolete, expensive or unsafe. They were built with no consideration of the environmental costs."
Babbitt said, "We must now examine those costs."
If Childs-Irving is discontinued, it would be only the second such system nationally to shut down.
The $500,000 project was put in service in 1909 by the predecessor to APS, the Arizona Power Company, to produce electricity for the mining industry and growing Arizona settlements.
At the beginning of the century, construction started with some 400 laborers who carved 50 miles of roads out of the dense wilderness, packing in material by mules.
They created a seven-mile long conduit of concrete, wood and steel to bring the water to the power houses. The flume diverted the waters of Fossil Creek to two plants, the Childs Plant and the Irving Plant.
At the power house, three 1,800 kilowatt generators and transformers sent electricity through 75 miles of transmission lines.
The project once supplied power to all of Yavapai County and most of Phoenix from a spring that produced 28 million gallons a day.
Before its mineral-rich water was re-routed, Fossil Creek had sent the water cascading some 14 miles to the Verde River. The water now goes through a flume to the two different power plants before it goes to the river, but none of it is consumed.
Water from Fossil Creek continues to flow a steady 43 cubic feet per second, producing 4.2 megawatts of electricity an hour, 24 hours a day. But it is now only a small part of the APS system around the state.
John Denman, vice president of fossil generation for APS, said that, on balance, the Childs-Irving plant, the company's only hydro facility, is good for the community and good for the environment.
Denman said if the plant were to shut down, it would revert to its natural state. This would cost the company about $10 million, according to Larry Johnson, plant manager for Childs-Irving.
"Obviously, we have a financial reason for keeping the plant open," he said. "It's a big issue."
Johnson said he is not minimizing the concerns of environmental groups who want Fossil Creek returned to a more natural state. "But we also have our customers to think about," he said.
If Childs-Irving is forced to close, APS would have to dismantle the buildings and restore the area to its original state. As the largest utility in the state with 750,000 customers, the company would also have to replace the lost power with additional fossil generated plants.
"We would increase power with coal or gas burning plants," Denman said. "It's a trade-off.
"The objective of the environmental community is to shut the plant down. It's their opinion that all the water should be returned to the creek as it was prior to the time when the plant was put into service."
"Early in the game, we thought we had all the stake holders involved," Denman said.
The key players include the Federal Energy Regulatory Commission, the Bureau of Land Management and the U.S. Forest Service.
APS agrees to cut water use
Johnson said part of the licensing agreement is to drop the amount of flow to the flume to help the stream rehabilitate itself.
"We agreed to take 10 cubic feet per second out of plant use. There were reasonable arguments to change the flow through the creek," Johnson said.
But after the company completed all the environmental impact studies it was asked to do, others joined in the process.
Denman said that in the past six or eight months, environmental groups have gotten into the re-licensing process, including American Rivers, the Sierra Club, Southwest Center for Biological Diversity and the Arizona Riparian Council.
They are seeking to return Fossil Creek to its original state with an increased flow of water that would allow additional habitats for a number of species, some of them listed as endangered.
Protesters argue for habitat
Mary Orton, Southwest director for American Rivers in Phoenix, said that returning Fossil Creek to its original state would provide a prime habitat for wildlife species. Orton called the creek "a great riparian wildlife resource."
Johnson said that over the past few months the company has contracted for additional studies with university-based scientists studying different species of plants and animals.
"In every case, science shows the we're not negatively impacting any species," Johnson said.
He said the studies concluded that if Fossil Creek were returned to its original state, no increases in habitat would be achieved.
Fossil Creek remains a natural and ecologically-rich site, despite the fact that its waters have been used to generate electricity.
The area has not been touched by development, is not near any residential or industrial development and has not been subject to livestock grazing or mining. Much of it is surrounded by a wilderness area.
Proponents of the project say the system is a monument to man's ingenuity and an engineering feat.
In 1976, the American Society of Mechanical Engineers named Childs-Irving a National Historic Mechanical Engineering Landmark. In 1991, the project was added to the National Register of Historic Places.
Childs-Irving now has an operating staff of eight people with an annual payroll of $400,000. Property taxes at the facility total $77,000 a year.
Johnson said the company intends to complete the licensing process in order to continue operating the plants. "If these environmental groups can provide us alternatives for use of the property that alleviates APS's financial losses, we'll consider them," he said.
Johnson said that APS has utilized the water from Fossil Creek while establishing what he called "a good partnership between industry and nature."
Both Johnson and Denman said they are open to working with the environmental groups to come to a partnership with them.
"We'll try to work with the environmental community to the extent that we can," Denman said.
"I'm not sure that we can work something out, but we're more than willing to sit down with these folks and come up with a plan that will work for everyone."