Navajo council OKs lease extension for Arizona coal plant

By The Associated Press

The Navajo Nation Council has approved a lease extension that will allow a coal-fired power plant in northeastern Arizona to continue operating through December 2019.

 

WINDOW ROCK, Ariz. (AP) — The Navajo Nation Council has approved a lease extension that will allow a coal-fired power plant in northeastern Arizona to continue operating through December 2019.

The 18-4 Council vote came Monday night after about eight hours of debate. It means at least 700 jobs at the Navajo Generating Station near Page and the coal mine that supplies it won't be immediately lost.

The lease for the 1970s-era plant is set to expire in two years. The plant's owners announced in February they would close it because cheaper power from natural gas is readily available, and they told the Council Monday they'd shut it down this year if they didn't get an extension.

The owners said it will take about two years to tear down the massive plant.

The Navajo Generating Station is owned by three Arizona utilities, one in Nevada and the federal Bureau of Reclamation and is operated by Phoenix-based Salt River Project. It has been a major provider of power used to pump water from the Colorado River to Phoenix and Tucson through the Central Arizona Project.

The decision to close the plant left Navajo lawmakers scrambling to save the jobs it supports and the millions of dollars in annual tax revenue that support government spending.

"You all know the history of the reason we are why here today," Council speaker LoRenzo Bates told fellow members before the Council debate. "If it fails we can begin to expect an impact beginning in 2018. It will have a ripple effect — it will impact the central government," he said.

Some members complained that the lease was being pushed on the tribe and they should hold out for better terms.

"When are we going to stop retreating?" said council member Leonard Tsosie, who voted against the lease extension. "I have to stand for Navajo Nation."

If the owners approve the lease extension, the tribe will have time to either find a new operator or plan for life after the plant. The Navajo Nation hopes to keep it open at least through 2030, although how it will find a buyer for a more-expensive coal power facility remains unclear. The Nation has asked the federal government for assistance.

U.S. Secretary of the Interior Ryan Zinke issued a statement Tuesday saying of the department's top priorities have been trying to work out a way for the mine and plant to continue operations after 2019. Zinke called the lease a "first step to meet this priority."

Owners want a decision on a new operator by Oct. 1, said Jared Touchin, a tribal council spokesman.

Salt River Project officials said the 35-year lease will pay the tribe $110 million and guarantee minimum coal purchase revenues of $29 million in 2018 and 2019. The tribe also will retain water, railroad and other facilities once the plant is demolished.

SRP executive Mike Hummel said the company is reviewing final lease terms to ensure it can sign off by July 1. He said it will allow SRP time to transition its workforce to other facilities if they wish to move.

"This agreement provides meaningful benefits for all involved and creates a path forward during this challenging transition," he said.

Two Navajo nation groups that are pushing for the tribe to move toward renewable energy and to ensure that the power plant site is fully cleaned up slammed the agreement.

"The deal was rammed through by holding the Navajo tribal council hostage through an 11th-hour ultimatum from the very same people that were given permission to exploit and plunder our natural resources," Dine CARE member Adella Begaye said in a statement.

Environmentalists hailed the possible closure of the plant as an opportunity to find new jobs that are better for the environment. Jihan Gearon, executive director of the Black Mesa Water Coalition, has criticized the plant's water pollution and the environmental impact of heavy mining of coal.

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