The U.S. Department of Interior's Office of Surface Mining Reclamation and Enforcement intends to prepare an environmental impact statement, the agency said in a Federal Register notice published Wednesday.
The EIS is a major federal study that could take years to complete. It will analyze several related impacts of the mine and power plant.
Environmental groups, including the San Juan Citizens Alliance based in Durango, Colo., had pushed for the study.
Mike Eisenfeld, New Mexico energy coordinator for the group, said the development is "the result of many years of work by us to get to where we're at."
Four Corners Power Plant is regarded as one of the nation's dirtiest coal-burning plants. The facility produces 2,040 megawatts of electricity that is transmitted throughout the West.
Operator Arizona Public Service Co. has announced plans to shut down the three oldest of the plant's five units after purchasing Southern California Edison's interest in the plant for $294 million.
The study will examine three main areas:
- APS' lease extension with the Navajo Nation, signed in March by Navajo President Ben Shelly. The lease extension allows the plant to continue operating on the Navajo Nation site
"We are pleased the Office of Surface Mining is moving forward, and we will provide whatever support is needed," said APS spokesman Damon Gross.
— Transmission lines connected to the plant owned by APS and Public Service Company of New Mexico require right-of-way renewals.
— BHP Billiton's proposal to mine a 5,600-acre area at Navajo Mine called the Pinabete Permit area. The new area would allow Navajo Mine to provide the plant coal at a rate of 5.8 million tons per year.
Navajo Mine, adjacent to the power plant, is the plant's sole supplier of coal. Portions of the mine are exhausted from decades of mining.
The proposal would allow for coal production for up to 25 years beginning in July 2016. OSM also expects BHP Billiton to submit a renewal application in 2014 for existing areas of Navajo Mine.
Eisenfeld said it makes sense to evaluate the power plant and mine together.
"The two facilities are inherently connected, and any analysis of the environmental impacts needs to include both facilities," he said.
The EIS will analyze potential impacts on air quality and climate change, water quality, public health, cultural and historic resources, visual aspects, threatened and endangered species and other areas.