Local opponents of the coal-fired Navajo power plant in northern Arizona are calling for a transition to cleaner sources of energy now that a deal to keep the plant operating through 2019 has been finalized.
A lease extension needed to keep the 2,250-MW power plant operating through December 2019 recently received final approval from federal authorities. The plant's utility owners plan to end their participation in the plant at that time, but Peabody Energy Corp., which supplies coal to the plant, is continuing to pursue opportunities to keep the plant operational. The lease extension prevented a potential closure of the plant, located near Page, Ariz., on Navajo Nation land, as early as this summer to allow for more than two years' of decommissioning work.
Nicole Horseherder, representing grassroots group Tó Nizhóni Ání, and Percy Deal, representing Diné Citizens Against Ruining Our Environment, said they would have preferred the Navajo power plant to close sooner, but now that the lease extension is a done deal, the Navajo Nation has an opportunity to embrace a renewable energy future.
Doing so will help provide the Navajo Nation with a balanced and healthy economy and protect future generations, Horseherder said. "If the Navajo Nation is interested in staying in the energy market then they really need to give consumers what it is they want," she said. "And most of them want energy made renewable."
The main plant facility at the Navajo Generating Station, as seen from Lake Powell in Page, Ariz. Source: Associated Press |
Horseherder and Deal both live on Black Mesa, a plateau within the Navajo Nation and Hopi Tribal area. For all of their concerns with coal's impacts on the air and its economic viability, the major focus is water.
The Navajo Aquifer is the main source of potable water for those living on Black Mesa. Peabody Energy Corp., which sends coal from its Kayenta mine to the plant, purchases some of the aquifer's water for mining operations. Use of the aquifer has been a subject of contention for years, Horseherder and Deal said. "I'd like to get the water that is intended for us by the Great Spirit and for my use and for the future for my kids, my grandkids and so-on," Deal said.
Plant's future in question
The Salt River Project, which operates and owns part of the plant along with other utility owners Arizona Public Service Co., Nevada Power Co. and Tucson Electric Power Co., pointed to economic challenges posed by cheaper natural gas for the decision to pull away from the plant.
The U.S. Bureau of Reclamation uses its share to pump water along the Central Arizona Project from the Colorado River to central and southern Arizona.
Peabody spokeswoman Beth Sutton said the lease extension is another important milestone in the effort to keep the plant online, something that is "vital" for low-cost electricity, water supplies and economic strength for the Navajo and Hopi.
"While the operator has announced plans to close the plant in 2019, the ownership transition process remains on track, and Peabody is optimistic about the good progress to date," Sutton said. "A number of high-caliber private equity firms have expressed interest in the process, and Lazard continues working toward a final selection of investors that could ultimately lead to definitive agreements next year."
Peabody earlier this year touted a study suggesting that the Navajo power plant can continue to be competitive with natural gas and other coal plants through 2040. Then in October, Peabody said investors had expressed interest in taking over the plant, but it did not name any potential buyers.
Both Horseherder and Deal have doubts about whether any of that interest will pan out into a new owner, given the current energy market and movement across the country away from coal-fired generation. "Anybody that is interested is probably just only that," Horseherder said.
However, she is concerned that the Navajo Nation might step in and buy the plant. A representative for Navajo Nation leadership was not available for comment about potential interest in taking over the plant or the possibility of developing renewables.
Focus on transition
The lease extension provides more than time to make a transition, Horseherder and Deal said.
Among other provisions, the extension includes $110 million in lease payments and minimum fuel purchase revenue assurances for the Navajo Nation of $39 million. The deal also gives the Navajo Nation access rights to 500 MW of transmission over power lines built for the plant, they said, something that provides opportunities to export renewable energy generated on Navajo land.
Deal and Horseherder said the numbers and the trend of electricity customers preferring renewables are on their side.
"I just hope the Navajo Nation does recognize that," Deal said.

