The owners of the Navajo Generating Station have voted to extend operations of the coal-fired power plant in LeChee, Arizona through December 2019, unless an agreement can be reached with the Navajo Nation.
The owners’ – Arizona Public Service Co., Bureau of Reclamation, NV Energy, Salt River Project, Tucson Electric Power – decision is based on the rapidly changing economics of the energy industry, which has seen natural gas prices sink to record lows and become a viable long-term and economical alternative to coal power.
“NGS and its employees are one reason why this region, the state of Arizona and the Phoenix metropolitan area have been able to grow and thrive,” said Scott Harelson, spokesman for SRP, the plant’s operator. “However, SRP has an obligation to provide low-cost service to our more than 1 million customers and the higher cost of operating NGS would be borne by our customers.”
This measure would preserve for nearly three years continued employment at the plant, additional revenues for the Navajo Nation and the Hopi Tribe.
“It also provides the Nation or others with the potential to operate the plant beyond 2019 should they so choose,” Harelson said. However, the current non-governmental group does not intend to be participants at that time.
NGS employees were informed in an afternoon meeting on Monday at the plant. The news was received with positive and negative reactions, said a NGS employee who did not want to be named.
NGS employees also received notification stating that “this was an extremely difficult decision and on that SRP and the other owners came to only after a serious study of all options – a process that began several years ago.”
“The Navajo Nation and the Office of the President and Vice President have been working diligently with the NGS owners including federal partners and other entities,” President Russell Begaye told the Navajo Times.
Begaye said the Nation’s goals were to see that the plant stays in operation for the next 10 years.
SRP deputy general manager Mike Hummel said the owners do not make this decision lightly.
While today’s vote provides positive stability for the reservation, Navajo Nation Speaker of the Council LoRenzo Bates said SRP and the other owners should continue working with Diné leaders to develop long-term solutions that take into account the potential loss of revenue and jobs, and the economic impact that a shutdown would have on the entire state in 2019, Bates said.
“Today’s decision is the first step in the right direction for all stakeholders,” he added. “As leaders of the Navajo Nation, we are very concerned about the workforce – the hundreds of Navajo families that make a living from NGS and the many more jobs and revenues that are created from secondary markets. The benefits of NGS go beyond the Navajo Nation and extend throughout the state of Arizona.”
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