The Navajo Nation Council is considering legislation that would extend the lease on Navajo Generating Station through the end of 2019, preserving jobs for Navajo and Hopi workers and delaying closure of the controversial coal-fired power plant in northern Arizona.
The legislation, introduced on May 24, seeks to keep the plant and Kayenta Mine, the plant’s sole provider of coal, operating for another 18 months. The tribe has until July 1 to approve a lease; if it doesn’t, the plant will cease operations immediately, and utility owners will begin the two-year decommissioning process, which includes tearing it down.
In tandem with this, the majority owner, the Salt River Project, will cease its involvement in the Navajo Generating Station after December 2019 even if a new lease is signed. In that event, the utility has said a new owner must be identified by October 1.
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The lease extension buys 18 months but no energy future in and of itself. Navajo Nation Council Speaker LoRenzo Bates said he introduced the legislation in hopes of warding off the economic devastation that will likely result if the plant abruptly ceases operations on July 1.
“By allowing NGS to remain in operation until 2019, it provides the Navajo Nation some stability in terms of projected revenue that benefits the entire Navajo Nation and the state of Arizona,” said Bates. “In addition, it allows us time to continue pursuing other energy sources, including renewable energy.”
Public comments can be submitted until the legislation goes before the Navajo Nation Council for final consideration. Email comments to email@example.com, or send written comments to: Executive Director, Office of Legislative Services, P.O. Box 3390, Window Rock, AZ 86515.
The legislation must go through four committees before the full, 24-member council votes on it. Two committees—Resources and Development and Health, Education and Human Services—already voted in favor of the lease, recommending that the full council approve it.
The Budget and Finance Committee, however, voted the legislation down, claiming the lease is not “in the best interest of the Navajo Nation.” The council’s Nabiki’yati’ Committee is now considering the lease before forwarding it on to the full council. If two-thirds of the council approves the legislation, the lease will go before Navajo President Russell Begaye, who has final authority to sign or reject the agreement.
“The NGS legislation will be the major decision of this council,” Bates said. “Whatever happens, whatever the council decides, that’s going to be the future of NGS, literally forever.”
But the lease could be a hard sell. If an agreement is reached, the Navajo Nation will earn $110 million in lease payments over the next 35 years as the plant’s current owners continue to monitor the land after facilities are torn down.
The lease also calls for the tribe to keep an estimated $241 million in existing infrastructure, including the railroad between the coalmine and power plant, a lake pump facility and electrical switchyard, and access to major transmission lines that could allow delivery of solar- or wind-generated electricity. But the agreement fails to address economic development after 2019, and without a purchase-power agreement in place, existing infrastructure will not produce revenue.
Bates proposed the legislation less than a week after the Interior Department hosted a series of public listening sessions in Phoenix, on the Navajo and Hopi reservations, and in Page, Ariz., where the power plant is located. The Navajo Nation is looking to the Interior, which has said it wants to keep the plant open, for help preserving jobs and revenue.
As the July 1 deadline for a new lease looms, tribal leaders are eying the October 1 deadline with trepidation. That’s the date that Salt River Project, the largest utility owner at 42.9 percent, has given for coming up with a new owner. That entity must be prepared to pay between $100 million and $250 million annually for upkeep—and find new customers to take the power.
“If the federal government says it will look at every possible option to keep the power plant open beyond 2019, even then the October 1 deadline doesn’t give us enough time,” Bates said. “There are so many moving pieces to this, too many things that need to be taken into account. That’s the reality of the situation.”
Meanwhile, Navajo environmental groups are urging the council to approve the lease, buying the Nation time to transition to clean energy and invest in job creation. These groups, which for decades have criticized the power plant as one of the dirtiest in the country, are asking leaders not to try to keep it running past 2019.
“Let’s not fool ourselves—coal has zero future,” Percy Deal, a board member for the group Diné Citizens Against Ruining our Environment (Diné CARE), said in a prepared statement. “The utilities rushing to get out of NGS know it, energy experts across the country know it, and we know it.”
Diné CARE is calling on Navajo leaders to prioritize a transition away from coal and “develop a plan that can truly save jobs, that secures our water rights for the Navajo and Hopi, and that cleans up the mess that mining and burning coal have left in our communities.”
Navajo Generating Station and Kayenta Mine together employ about 850 people and contribute $40 million to the Navajo Nation every year. Revenues from the generating station make up one-third of the Navajo government’s operating budget, which translates into direct services for people.
Should the power plant and mine close, the state of Arizona could lose as much as $500 million per year in tax revenue and as many as 3,000 jobs in secondary markets, Bates said.