Investors who might keep coal plant open identified

FLAGSTAFF, Ariz. — The potential investors in a coal-fired power plant in northern Arizona have been identified as a New York-based firm that focuses on distressed companies and one of its subsidiaries in the utility business.

The Navajo Generating Station near Page, just south of the Utah border, is set to close in December 2019 unless a new owner is found, costing hundreds of good-paying jobs on the Navajo and Hopi reservations.

Investment banking firm Lazard Freres has been leading the search for a new buyer after being hired by the plant’s sole coal supplier, Peabody Energy Inc.

The potential buyers were identified publicly for the first time last week 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.

The emails were shared by the Institute for Energy Economics and Financial Analysis, a nonprofit research group that has been following the coal industry. A spokeswoman for the Central Arizona Project confirmed their authenticity.

Lazard has said prolonging the life of the plant would hinge on the willingness of current owners and the Central Arizona Project to buy power after 2019, a long-term lease with the Navajo Nation, a coal-supply agreement and spending less to operate the plant. The current owners decided to close it because natural gas was cheaper.

Gov. Doug Ducey signed legislation last week exempting coal used at the Navajo Generating Station from the state’s sales tax to make it more attractive for a buyer.