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Navajo Nation to consider plant lease extension

The Navajo Nation Council will consider legislation to keep the Navajo power plant operating through 2019.

The 2,250-MW coal-fired power plant is located on Navajo Nation land. Navajo Nation leadership and the Salt River Project, the plant's operator and its largest single owner, recently reached a temporary lease extension agreement to continue operations at the plant for two more years.

SNL Image

The main plant facility at the Navajo Generating Station as seen from Lake Powell in Page, Ariz.

Source: AP

SRP had considered closing the plant as early as this July because the plant site lease with the Navajo Nation expires on Dec. 22, 2019, and the utility needs more than two years to decommission the plant.

Navajo Nation Council Speaker LoRenzo Bates has introduced legislation to approve the replacement lease. Bates supports the proposal as it will give the Navajo Nation some stability in terms of projected revenue and allow for more time to pursue other energy resources such as renewables.

Three other utilities and the U.S. government, through the Bureau of Reclamation, own interests in the Navajo plant. Utility owners of the plant in February decided to keep operating the plant through December 2019, should an agreement with the Navajo Nation be reached.

The Navajo Nation has been asked to make a final decision on the proposed agreement by July 1.

A news release from Bates said the Navajo Nation receives more than $30 million a year in revenue from plant operations. Should the plant close, the Navajo Nation could lose hundreds of jobs at the facility and Kayenta Mine, which supplies its coal.

The legislation will need two-thirds of the Council's approval, or 16 votes, to pass and is now going through a 5-day comment period. The proposal, Legislation No. 0194-17, will be considered by several committees and eventually the council.