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Group marches in support of keeping Navajo coal plant open

Posted at 12:40 PM, Feb 06, 2018
and last updated 2018-02-06 14:44:02-05

A coalition of groups is rallying at the Arizona Capitol to build support for extending the life of a coal-fired power plant near the Arizona-Utah border.

The Navajo Generating Station in Page is set to close at the end of 2019 unless a new owner can be found. That's considered a long-shot, but the company that owns the supply mine says it has identified investors interested in one of the largest coal plants in the West.

Dozens of Hopis and Navajos who work at the plant and the Kayenta Mine are expected at Tuesday's rally. The power plant and mine are major sources of revenue for the Navajo Nation, and coal royalties provide roughly 85 percent of the Hopi budget.

The Salt River Project operates the plant and announced last year it would shutter the 2,250-megawatt unit because buying natural gas long-term on the open market is cheaper. It opened up financials for the plant to any investors, and about 15 non-disclosure agreements were signed, the utility said.

Keeping the plant open beyond 2019 would require a new owner to reduce nitrogen oxide emissions from the plant in compliance with a U.S. Environmental Protection Agency rule, negotiate coal supply agreements and a new lease with the Navajo Nation.

"The longer this goes on without a serious offer to move forward on this, the less time there is to affect those types of agreements," said SRP spokesman Scott Harelson. "We can't proceed as if it's going to happen because then we become vulnerable to not meeting our obligations."

Peabody Energy, which owns the Kayenta Mine, has said it expects to have agreements with any serious buyers in place by the end of March. Peabody hired investment firm Lazard Freres & Co. LLC. to aid in the search.

Environmentalists have praised the decision to shutter the plant decades earlier than expected. Tribal leaders are open to having a new owner, and the Interior Department is keeping everyone talking. The U.S. Bureau of Reclamation under Interior owns nearly a quarter of the power generated from the plant.

"Interior is committed to working with all parties, to include current or any future owners, to keep the power plant operational in support of good paying tribal jobs," Interior Secretary Ryan Zinke said in a statement.

Electricity from the plant helps fulfill water rights settlements with tribes and sends water through a series of canals to metropolitan Phoenix and Tucson. But even the Central Arizona Project that runs the canal system has bought power elsewhere.

George Bilicic of Lazard said the company believes the Central Arizona Project legally is required to get power from the generating station. The coalition of groups rallying Tuesday, led by the United Mine Workers of America, is asking the Central Arizona Project and the current power plant owners to commit to buying power from the Navajo Generating Station if a new owner is found.

SRP and CAP said they would do so only if it makes economic sense.