The U.S. Environmental Protection Agency is scheduled to release its decision on an air-quality permit for a controversial proposed coal-fired power plant on Navajo land near Shiprock by Thursday.

But state officials say the EPA can't possibly meet its legal obligations and make a decision on the permit so soon.

The proposed 750-megawatt coal-fired plant, called Desert Rock, is a joint venture of the Navajo tribal government and New York-based Sithe Global Power. Both have promoted Desert Rock as a state-of-the-art facility that will burn cleaner than three other coal-fired power plants in the region while generating much-needed electricity, provide hundreds of high-paying jobs and bring in $50 million a year in revenue for the tribe.

Opponents, including some Navajos, have fought the project, claiming no matter how clean the plant burns, it will still contribute air pollutants to one of the dirtiest spots in the West. Three other coal-fired plants operate in the same Four Corners region. Two of them help power Public Service Company of New Mexico customers, including customers in Santa Fe.

The Navajo Nation and Sithe Global sued the EPA earlier this year in federal court, claiming the agency had failed to make a timely decision on a required air-quality permit. "The agency was supposed to issue a decision in 12 months. It's been four years," said Frank Maisano, spokesman for the company.

A judge ruled the agency had until the end of this week to make a decision.

On July 10, the state's attorney general and the New Mexico Environment Department filed a request to intervene in the Desert Rock case.

Environment Secretary Ron Curry said he believes the EPA can't issue a decision on the Desert Rock permit in the required time. "They received 1,200 comments on the draft air-quality permit. Their regulations say they must respond to each comment before issuing the permit," Curry said. "We don't believe they can get that done by July 31."

Curry said he believes the plant needs to be redesigned with the latest technology to further reduce sulfur-dioxide emissions. In addition, he said, the carbon-dioxide emissions from the plant will make it tough for the state to meet greenhouse-gas reduction goals set by Gov. Bill Richardson.

But mercury remains Curry's biggest concern. The state already has standing advisories against eating fish from some New Mexico lakes and streams because of mercury levels. "New Mexico has higher levels of mercury than any other state in the Western U.S.," Curry said. "Even if (their plant) has lower mercury emissions, it would add to the cumulative amounts in the air."

Maisano said the proposed power plant design meets or exceeds mercury emissions standards established by New Mexico. "We meet the mercury rule that New Mexico passed," he said. "If it is good enough for power plants in New Mexico, why isn't it good enough for a power plant in the state on the Navajo Nation?"

An environmental assessment of impacts from the proposed power plant also is required. A draft assessment was finished last year by the U.S. Bureau of Indian Affairs. The final document has not been released.

Maisano said the proposed lease between Sithe and the Navajo tribe is a 25-year-lease with a 25-year extension. The tribe can own up to 49 percent of the venture. It stands to make $50 million a year from royalties, lease payments and taxes. The total cost of the project is estimated at $2.5 billion.

Contact Staci Matlock at 470-9843 or smatlock@sfnewmexican.com.