NENAHNEZAD — Developers of the Desert Rock power plant are looking for alternate funding options after the U.S. Department of Energy denied the project's bid for $450 million in stimulus money to implement carbon-capturing pollution controls.

Developers of the 1,500-megawatt power plant proposed to be built 25 miles southwest of Farmington said the project remains viable, despite its omission from the Department of Energy's carbon capture and sequestration pilot project grants announced Friday.

"We're still pushing forward. Everybody has still got their hands around this trying to figure out what the best way to do it is," said Doug MacCourt, an attorney representing the Navajo Nation and the Desert Rock development.

However, opponents of the power plant development said the Department of Energy decision underscores a range of problems with Desert Rock and suggests a finding that the project isn't feasible.

"It doesn't look good for the Desert Rock project. I don't see how they could possibly find more funds or expect the Navajo Nation to pay the remaining (expense)," said Dáilan Long, with the anti-Desert Rock group Diné Citizens Against Ruining Our Environment. "It should be a signal for them (Navajo Tribal Council) to pull out and dump the whole project."

Following the U.S. Environmental Protection Agency's request to repeal Desert Rock's air quality permit in April, the project began engineering the Carbon Capture and Sequestration model, designed to further cut greenhouse gas pollution at a significantly higher cost.

Desert Rock proponents, which include the Texas-based company Sithe Global and the Navajo Nation, initially budgeted to pay $1.05 billion to implement the improved pollution-cutting technology.

The request for $450 million in stimulus funds would have paid approximately 43 percent of the carbon-capture system costs.

Desert Rock, which requested more stimulus dollars than any of the three projects awarded in the government's carbon-capture grants, was told by the Department of Energy that funds were denied because the application had paperwork problems, MacCourt said.

"It certainly can't be construed as some kind of determination that the project's not feasible," MacCourt said.

Project developers are looking for potential appeals to the Department of Energy award decision, he said.

Considering the increased government regulation of fossil-fuel power generation, Desert Rock likely will have to find an alternative way to fund the carbon-capture technology if the project will move forward, said Nathan Plagens, vice president of the Desert Rock Energy Company.

"We're looking at all options. I can't say one option over the other specifically at this time. It's a matter of your product, it's a matter of your costs and it's a matter of if you have people that are willing to buy it," Plagens said.

Given the ongoing restrictions being added to emissions standards nationwide, Desert Rock likely will wait to see how the politics play out before continuing the permitting process, he said.

"By no means is the project dead," Plagens said. "There's still some basis of this project being technically sound, but going forward, you've got to figure out and muddle through ... the politics and potential regulations."

James Monteleone: jmonteleone@daily-times.com