The Navajo Nation risks losing $18 million in taxes, royalty and lease fees in upcoming years due to proposed changes at Four Corners Power Plant. Arizona Public Service Company (APS) plans to shutdown the three oldest coal-power units in an effort to reduce emissions and to buy out Southern California Edison’s stake in two of the plant’s other units, reports the Navajo Times.
Southern California Edison (SCE) is ready to sell. California State law mandates it discontinue business with the plant by 2016, when the existing lease with the Navajo Nation expires, and reduce its claims in coal-fired electric generation. APS is expected to buy out Southern California Edison’s share for $294 million, the APS press release reports. The actual cost may run closer to $400 million when you tack on improvements, APS Vice President of Fossil Generation David Hansen told the Navajo Times.
Adding to investment costs, the Environmental Protection Agency (EPA) wants the highest-grade retrofit technology, which will run around $875 million. Four Corners is one of the largest industrial sources of carbon, a major cause of global warming. BHP Billiton’s nearby Navajo Mine is the sole supplier of coal to the plant, providing eight to nine million tons of coal annually, said Norman Benally, BHP manager of human resources, government and community relations.
While the Navajo Nation may experience short-term economic loss, the financial (though perhaps not environmental) long-term vision is favorable. The operation of the two units set for purchase is expected to provide more than $6.3 billion in economic value to the region over the next 30 years – at least 70 percent of that will benefit the Navajo Nation.
The other upside to the proposed changes for Navajos is job solidarity. Mark Schiavoni, APS Senior Vice President of Fossil Generation, ensured there would be no layoffs at the plant, which employs 549 workers (74 percent of whom are Navajo).
“This proposal enables us to continue to support the Navajo Nation and the Farmington area with high-quality jobs that are important economic drivers for the region,” Shiavoni said.
Some contingencies still stand in the way: approval from the Arizona Corporation Commission, the California Public Utilities Commission and the Federal Energy Regulatory Commission, in addition to the Navajo Nation approving a lease extension for the plant beyond 2016.