RDC discusses NGS lease behind closed doors

By Alastair Lee Bitsoi
Navajo Times

WINDOW ROCK, February 28, 2013

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W hen the lease extension legislation for Navajo Generating Station reached the Resources and Development Committee's floor Tuesday afternoon, Navajo Attorney General Harrison Tsosie cited the Navajo Privacy Act to discuss the matter in executive session.

Council Delegate Leonard Tsosie (Baca-Prewitt/Casamero Lake/Counselor/Littlewater/Ojo Encino/Pueblo Pintado/Torreon/Whitehorse Lake) asked the attorney general why it was necessary to convene in executive session if the negotiation team already finalized the lease extension negotiations, which had been going on since President Ben Shelly took office.

If the Navajo Nation approves NGS's lease extension, the tribe would receive about $42 million per year in lease payments from 2019 to 2044. The annual payment of $42 million is substantially larger than $608,400 outlined in the original lease approved in 1969.

"I'm a little bit worried about the executive session," Leonard Tsosie said. "If the whole thing is not finalized I'm thinking we shouldn't talk about it if they're still negotiating or whatever because this is like the water rights legislation. Eventually this thing has to become public."

Tsosie added that the NGS update meeting held at Fire Rock Navajo Casino on Feb. 22 was not part of the legislative process, and now that the legislation had reached RDC there was little need for executive session.

"I don't know how we're going to handle this when this is a grave concern to the Navajo public," Tsosie said.

He then asked committee chair Katherine Benally (Chilchinbeto/Dennehotso/Kayenta) for guidance on whether to take discussion into executive session. Benally then asked Harrison Tsosie to clarify if the lease extension was finalized or not.

"The document that is before you is a final document and under Navajo law once we negotiate a final document that document comes before the Navajo Nation Council for approval," Harrison Tsosie added.

The next question posed by Leonard Tsosie and Benally was when the attorney general would allow the Navajo people to see the lease extension negotiations.

Though he didn't give a timeline of when the Navajo people would be allowed to see the lease, Harrison Tsosie said convening in executive session is "mandatory and not discretionary," according to his interpretation of the Navajo Privacy Act.

Switching between Navajo and English, Harrison Tsosie said, "At 2 N.N.C. Section 85 A-7, the Navajo Privacy Act, the following records are private and otherwise protected and shall not be considered public for purposes of required disclosure: the negotiation position of the Navajo Nation before a contract lease or other agreement is entered into."

"This is private and cannot be disclosed," the attorney general added.

He also cited another provision under the Navajo Privacy Act - Section 85 A-12 - that read, "The following records are private and otherwise protected and shall not be considered public for purposes of required disclosure. Information contained within or related to a contract lease or other agreement, which is proprietary in nature."

But before going into executive session, Benally gave the floor to grassroots activists Tulley Haswood and Milton Bluehouse and Kayenta Mine worker Hank Whitethorne. The trio offered their recommendations of what the lease extension should include.

In his testimony, Haswood told the committee he would suggest the Council table the lease extension legislation and hold off for a thorough study.

"The negotiations should be for better conditions and much higher rates than the $42 million that is proposed by the NGS owners," he said. "The counter proposal should be based on the three transmission lines that are coming off NGS at 102 miles length, each, to the Navajo boundary near Cameron, Ariz."

Haswood added the six owners of NGS - Tucson Electric, Nevada Power, Arizona Public Service, Los Angeles Power and Water District, Salt River Project and the U.S. Bureau of Reclamation - should pay a fee in lieu of taxes for their gross receipts annually for 83 miles of railroad from Black Mesa and a seven-mile water line from Lake Powell, both to NGS.

NGS, he said, generates about $555 million annually.

"The lease extension should be based on rights-of-ways at $300 per rod," Haswood said. "One rod equals about 16.5 feet. There are 396 miles of rights-of-ways equaling 126,720 rods, which could earn $38 million annually."

Regarding the Bureau of Reclamation's ownership, Haswood said the federal agency has a conflict of interest. Haswood said the bureau didn't sign the original lease and still hasn't signed it in these lease extensions.

"What they did is turn their 24.3 percent share to SRP, which on a yearly basis added with SRP's would come up to $255 million," he explained.

Haswood also recommended the Navajo Nation consider purchasing Los Angeles Power and Water District's 21.2 percent ownership of NGS, which could be part of the lease extension negotiations. A 2006 California law requires utility companies in the state to reduce their stake in coal-fired electric generation. LAPWD has until 2019 to sell its 21.2 percent ownership.

If this happens, Navajo will earn about $118 million, plus $110 million, which equals to about $228 million annually, Haswood said.

He added, "With the rights-of-way and all of the infrastructure already in place, the Navajo Nation has total leverage and control for the NGS lease extension."

Earlier in the meeting, the committee accepted a report, by a vote of 3-0, from members of the United Mine Workers of America No. 1924 that work at Kayenta Mine, the sole coal supplier for NGS. The coal miners told the committee how important jobs at the mine are to the Navajo economy.

Approximately 900 people are employed at both NGS and Kayenta Mine, with more than 85 percent Native American.

"The reason we are here is because we are concerned about the future of our mines, and the future of NGS," said Marie Justice, contact chair for the UMWA No. 1924."They are our customer(s), we supply coal to them."

"We are hopeful you get this done, so we have new miners," added Justice, who was present along with coal miners Alex Osif, Jessie Chief, Daniel Billie and Hank Whitethorne. "We would like to give them a future there."

After nearly two hours of discussion in executive session, the committee passed the resolution by a vote of 2-1. Council delegates Roscoe Smith (Crystal/Fort Defiance/Red Lake/Sawmill) and Leonard Pete (Chinle) voted in favor of the bill, while Leonard Tsosie voted against it.

The resolution proceeds to the Naabik'iyati' Committee, which is scheduled to meet today for a regular meeting.

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