AZ congressman introduces draft legislation to keep NGS open

FLAGSTAFF, Ariz. — The U.S. House of Representatives introduced draft legislation May 9 designed to keep Navajo Generating Station operating past December 2019.

The bill is sponsored by Rep. Paul Gosar, (AZ, 04), and while a hearing was scheduled in the National Resources Committee for May 16, the hearing was postponed.

The legislation appears to exempt any new lease for continued operations at NGS and the Kayenta coal mine from the 1970 National Environmental Policy Act (NEPA) and it requires the Central Arizona Project (CAP) to ‘purchase as much of its total power requirements as possible’ from NGS.

The Institute for Energy Economics and Financial Analysis (IEEFA), which conducts research and analyses on financial and economic issues related to energy and the environment said in an updated report of its May 2017 analyses of market conditions and the potential future of operations at NGS and determining if it would be economical for Central Arizona Project to purchase power from the plant from 2010-2030.

“IEEFA finds that Navajo Generating Station’s economic prospects are even more bleak than they were in May 2017, and the claim that CAP would save money by signing with NGS cannot be substantiated,” the report said. “In fact, NGS owners would lose $2.2 to $3.4 billion by continuing to operate the plant just through 2030.”

The report said CAP would lose between $454 and $693 million on average, or $41 to $63 million per year, if it were to continue to purchase power from NGS as compared to purchasing power from the market from 2020 to 2030.

The draft legislation would also exempt NGS from the Clean Air Act’s program to clean up haze in Grand Canyon National Park and it would prevent the current NGS operator, Salt River Project, from moving forward with decommissioning activities.

“We were made aware of this draft discussion on Friday (May 11) and need additional time to review and consider its implications,” said Scott Harelson, spokesman for SRP.

Harelson said that it is still true as of May 14 that there are no new potential buyers who have entered into negotiations to buy the plant.

Mike Hummel, Deputy General Manager for SRP said in a letter to the Department of the Interior that any new potential buyers who express interest after mid-May will face significant challenges in keeping the plant open without a temporary shutdown.

“Any potential new owners would have to complete negotiations with the current owners to purchase, negotiate a new lease with the Navajo Nation and a contract with the coal provider by Dec. 22, 2019,” Harelson said. “They would also have to complete a federal NEPA process by the same date.”

Any while the actual dismantling of the plant will begin after Dec. 22, 2019, other things have to happen first.

“Many other significant steps must be completed and capital investments made in order for that to occur, including selection of contractors and the engineering necessary to move forward,” Harelson said.

Nicole Horseherder, of Tó Nizhóni Ání, reacted strongly to the proposed legislation.

“This bill should be called a tribal exploitation act,” she said. “It says Navajo people shouldn’t have the same safeguards for our air, health and water that the rest of the country has. It says to Navajo people that the U.S. government is only interested in our economy when it fuels profits and executive pay at corporations like Peabody Coal and Avenue Capital.”

Horseherder said the bill would erase what the Navajo Nation has achieved in economic security in the signed agreement for NGS retirement in 2019.

“…wiping out all the resources and transmission access to build a renewable energy economy that gets us out of the past and into sync with the Southwest energy market today,” Horseherder said.

Navajo groups send letter to potential investors

In light of news that two investors are expressing interest in purchasing the Navajo Generating Station, local Navajo groups invited both companies to visit the Navajo Nation in order to hear directly from Navajo families on the ground. 

The potential buyers were identified publicly for the first time in early May as Avenue Capital Group and Deerfield, Illinois-based Middle River Power. The information came in emails between a Lazard representative and the general manager of the Central Arizona Project, who were trying to set up a meeting to talk about power purchase agreements.

In their letter, Diné Care, TóNizhóni Ání, DinéHózhó and a former Navajo County Supervisor and former Navajo Tribal Council delegate all expressed their concerns over the reported practices of the companies.

These include concern with the companies’ business models, the economic benefits and water rights assistance already included in the NGS lease, responsibility for pollution and cleanup and site remediation and cutting corners to make NGS economic.

“If your firms are indeed proceeding with negotiations to purchase NGS, these are matters that are vitally important to the future of all on Navajo Nation,” the letter said. “You have likely received information from entities like Peabody Energy and Lazard designed to push through the sale of NGS so that PGS can continue supplying it with coal. However, neither Peabody — nor the Navajo Nation tribal government, for that matter — speak for all the affected people across our land.”

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