Closure of coal power station could cost US state $18bn

Closing the Navajo coal power generating station in northeastern Arizona could cost the US state $18bn or more, should the power plant’s owners be unable to work out a deal with the Navajo Nation, according to a study released this week.

The study for one of the power plant’s owners, was done by the Arizona State University  L. William Seidman Research Institute, reports Patrick O'Grady of the Phoenix Business Journal.

It found the station’s economic impact along with that of Kayenta Mine, which supplies the plant with coal, tallies in the hundreds of millions of dollars contributed annually to the gross state product.

SRP and other plant owners, which include Arizona Public Service Co.  and the U.S. Bureau of Reclamation, are working on an extension to the contract to lease tribal land for the plants as well as rights of way. The current lease for the plant ends in 2019.

The study estimates that failure to reach an agreement could shutter the plant and result in the loss of about 3,400 jobs and roughly $602m in state tax revenues between 2017 and 2044.

In addition to looking at the impact to the region surrounding the plant, the study also says that it could cost $1.1bn to retrofit the coal-fired plant to meet regulations under discussions within the U.S. Environmental Protection Agency.

John Sullivan, the chief resources executive at SRP, said having to put more investment into the station could threaten its economic viability.

SRP finished a $45m emissions control project last year that retrofitted the three, 750-MW units at the plant to reduce nitrogen oxide emissions by about 40 per cent.

The plant’s owners have been negotiating with the Navajo Nation for several months, and officials are optimistic they can reach a good agreement, said SRP spokesman Scott Harelson.

Once that is done, however, the plant will have to undergo a process included in the National Environmental Policy Act that could take five to six year to finish, Harelson said.

Between 2011 and 2044, the plant is expected to have a roughly $12.1bn economic impact on the gross state product, and the mine will have another $8bn.

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