WINDOW ROCK - Council Delegate LoRenzo Bates (Nenahnezad, Newcomb, San Juan, Tiis Tsoh Sikaad, Tse'Daa'Kaan, Upper Fruitland) proposed legislation to use about $4 million from the Navajo Nation's Unreserved, Undesignated Fund Balance to buy Navajo Mine from BHP Billiton.
On April 29 council members approved the formation of Navajo Transitional Energy Company, LLC (NTEC) to try to buy BHP Navajo Mine.
"When the Council formed NTEC, it empowered the NTEC board to carry out the purchase of Navajo Mine, but there was no funding behind it," said co-sponsor Speaker Johnny Naize (Low Mountain, Many Farms, Nazlini, Tachee/Blue Gap, Tselani/Cottonwood). "It is critical that NTEC be funded to carry out the next step in this process."
Naize said the purchase of Navajo Mine would keep more than 800 jobs at the Four Corners Power Plant and Navajo Mine, and keep $40 million in annual taxes and royalties coming to the Navajo Nation.
If the proposed bill is approved by the Council and executed by President Ben Shelly, the $4 million will be released in three disbursements to NTEC.
The first disbursement, totaling approximately $1.6 million, will go toward NTEC's pre-closing operating expenses and for outstanding invoices for transaction expenses.
In the second disbursement, the Nation would release approximately $1.3 million for additional estimated closing expenses upon the signing of the Equity Interest Purchase Agreement between NTEC and BHP Billiton.
The final disbursement, totaling approximately $1.1 million, will go to NTEC's pos - closing operating expenses, upon the closing of the Coal Supply Agreement between NTEC and the Four Corners Power Plant.
Initially, the Mine Management Agreement with BHP Billiton and a Coal Supply Agreement with APS were scheduled to be complete by July of this year. However, because of setbacks, NTEC's timeframe for completing the potential purchase has changed.
Delegate Bates said the Arizona Corporation Commission's (ACC) decision earlier this year to open an inquiry, which was closed in September, into the possible deregulation of the electric market in the state of Arizona was a major setback.
"Now that the ACC decision came down we can move, but what it has done is it has tightened up the calendar and timeline for the purchase," said Bates. "The Navajo Nation, APS, and BHP have to make decisions to stay within that timeline."
The cost of the mine is estimated to be $85 million, for which a funding source has yet to be determined.
According to the legislation assignment memorandum, the Resources and Development Committee, Budget and Finance Committee, Naa'bik'iyati' Committee, and the Navajo Nation Council will consider the bill.
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