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Ariz. water supplier picks solar in another blow to Navajo coal plant

The Trump administration pushed for the Central Arizona Project to stick with the Navajo coal-fired plant, but the water supplier chose to switch to solar power instead.

The Central Arizona Project, or CAP, Board of Directors on June 7 voted to sign a 20-year power purchase agreement with Origis Energy USA Inc. for 30 MW of solar generation capacity and associated energy from the project as well as a five-year agreement with Salt River Project for 35 MW of capacity and energy from a combination of Salt River Project's solar facilities.

Those votes were made after the U.S. Department of the Interior Assistant Secretary Tim Petty sent a letter urging the CAP to help save the economically troubled Navajo plant by renewing its contractual obligations to buy capacity and energy, Petty is reported in local newspapers to have said CAP has obligations to take the coal plant's power due to a 1968 federal act approving financing and construction of the CAP, a water aqueduct system that supplies central and southern Arizona from the Colorado River.

The Navajo plant is slated for closure in 2019 because most of its owners — Salt River Project, Arizona Public Service Co., Nevada Power Co. and Tucson Electric Power Co. — will quit the plant at the end of 2019. That leaves the Interior Department's Bureau of Reclamation with about a 24% share of the 2,250-MW facility.

CAP Board President Lisa Atkins noted CAP has long relied on the Navajo generating station, but CAP is not required by law to buy the plant's power. She said CAP cannot continue to rely on one source as its primary power supply, and seeks diverse resources for its own water service reliability.

The two solar contracts will supply only 14% of CAP's total energy needs, she continued, saying CAP is committed to continue talks with the Interior Department over the possibility of making future power supply arrangements with the Navajo plant. She said CAP participated in stakeholder meetings Interior convened in 2017 and discussed the questions Petty raised in his letter and a June 6 phone call he made to Atkins. However, she noted the uncertainty of a new owner signing an agreement to share with the federal government in continuing the Navajo plant's operation.

"We have no way of knowing how long it will take a new owner to complete the many agreements and actions that will be necessary before they can commit to providing CAP energy after 2019," she said in her public statement at the board meeting. "Therefore, CAP has no choice but to take appropriate action to ensure it has the energy needed to deliver water in the event that NGS does close as previously announced."

If a new NGS ownership group materializes and can provide competitively priced power, CAP remains open to considering that alternative, CAP spokeswoman DeEtte Person said before the meeting.

Arizona Public Service is a subsidiary of Pinnacle West Capital Corp., while Nevada Power is wholly owned by NV Energy Inc. Tucson Electric Power Co. is a unit of UNS Energy Corp.