Lease re­newed for coal-fired plant on Navajo lands through 2019

The Washington Times Daily - - NATION - BY BEN WOLF­GANG

A North­ern Ari­zona coal-fired power plant par­tially owned by the fed­eral govern­ment and crit­i­cal to tribal economies in the West will sur­vive for an­other two years, but its uncer­tain fu­ture un­der­scores the deep chal­lenges fac­ing ag­ing coal fa­cil­i­ties na­tion­wide.

The Navajo Na­tion this week ap­proved a lease ex­ten­sion for the Salt River Project-Navajo Gen­er­at­ing Sta­tion (NGS) through 2019, tem­po­rar­ily head­ing off a cat­a­strophic clo­sure that would have left hun­dreds with­out jobs and al­most cer­tainly would’ve led to the shut­ter­ing of Pe­abody En­ergy’s nearby Kayenta Mine that sup­plies the fa­cil­ity.

The Bu­reau of Recla­ma­tion owns a 24 per­cent stake in the 2,250-megawatt project that sits on Navajo land in North­ern Ari­zona, giv­ing the fed­eral govern­ment deep in­ter­est in find­ing a res­o­lu­tion — es­pe­cially in light of Pres­i­dent Trump’s vow to res­cue the U.S. coal in­dus­try and pre­vent mines and coal-fired plants from clos­ing.

That prom­ise, how­ever, will be dif­fi­cult to keep mov­ing for­ward. Coal in­dus­try lead­ers say many plants are near­ing the end of their life span, with the av­er­age age of a coal-fired fa­cil­ity be­ing about 40 years old. NGS was opened in 1976, and the util­i­ties that own and op­er­ate the plant say they’ll bail af­ter the 2019 lease ex­ten­sion ends — an in­creas­ingly com­mon de­ci­sion among util­i­ties.

Nat­u­ral gas and re­new­able en­ergy fa­cil­i­ties are much younger, ac­cord­ing to in­dus­try and fed­eral data, and con­struct­ing new plants that burn nat­u­ral gas or har­ness wind and solar power is much cheaper than new coal plants, which re­quire ex­pen­sive emis­sions-con­trol tech­nol­ogy.

That’s left the sec­tor fight­ing to keep ag­ing fa­cil­i­ties up and run­ning as long as pos­si­ble.

“It’s very dif­fi­cult to build a new coal plant for two rea­sons. One is how much it costs, and two is the re­sis­tance to build­ing a new coal plant” due to en­vi­ron­men­tal con­cerns, said Pail Bai­ley, pres­i­dent and CEO of the Amer­i­can Coali­tion for Clean Coal Elec­tric­ity. “It’s very hard to build a new coal plant. … You can build a new gas plant cheaper and faster than you can build a new coal plant.”

In the case of NGS, ad­min­is­tra­tion of­fi­cials rec­og­nized the im­por­tance of keep­ing the fa­cil­ity up and run­ning, both for its im­por­tance to the short­term fu­ture of the coal in­dus­try and its im­pacts on lo­cal tribal economies. The lease ex­ten­sion will stave off fi­nan­cial dev­as­ta­tion for the Hopi Tribe, which gets about 80 per­cent of its an­nual bud­get from Kayenta Mine roy­al­ties.

“Since the first weeks of the Trump ad­min­is­tra­tion, one of In­te­rior’s top pri­or­i­ties has been to roll up our sleeves with di­verse stake­hold­ers in search of an eco­nomic path for­ward to ex­tend NGS and Kayenta Mine op­er­a­tions af­ter 2019. Oper­at­ing NGS and the Kayenta Mine through 2019 is the first step to meet this pri­or­ity,” In­te­rior Sec­re­tary Ryan Zinke said in a state­ment Tues­day night. “This Navajo Na­tion Coun­cil’s en­dorse­ment of a new lease gives NGS and Kayenta Mine work­ers a fight­ing chance and gives Navajo and Hopi economies a mo­ment to re­group for the work ahead.”

But the lease ex­ten­sion could be just a tem­po­rary re­prieve. The util­i­ties that own the other 76 per­cent of the plant — such as Salt River Project, which op­er­ates the fa­cil­ity and has been deeply in­volved in ne­go­ti­a­tions with the Navajo Na­tion — aren’t in­ter­ested in a long-term fu­ture with NGS.

Those util­i­ties an­nounced ear­lier this year they’d pull out of the project af­ter 2019, cit­ing the eco­nomic chal­lenges of con­tin­u­ing to op­er­ate the plant. It’s un­clear whether an­other util­ity will step in to buy the plant af­ter 2019, or if the fed­eral govern­ment could take the un­prece­dented step of fully own­ing such a fa­cil­ity, or if it will close en­tirely.

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