Begaye: Coal cost is culprit in NGS fate

LECHEE, PAGE, and TUBA CITY, Ariz.

When President Russell Begaye asked the owners of the Navajo Generating Station what could be done to extend the lease up to 2029, he was told that the cost of Peabody Western Coal Company’s coal is too high.

And if Peabody brings their cost down, the owners will consider extending the lease, Begaye told the Navajo Times in an interview.

The coal-fired power plant’s five owners – Arizona Public Service Co., the U.S. Bureau of Reclamation, NV Energy, Salt River Project, and Tucson Electric Power – are considering options that include keeping it open, but also closing it within the next few years, SRP spokesman Scott Harelson said.

The plant’s lease with the Navajo Nation expires Dec. 31, 2019 but the plant could be closed before then.

Las Vegas-based NV Energy, which owns 11.3 percent of the plant in LeChee, is putting a stop to a lease extension, said Begaye, who has been meeting with SRP, the plant’s operator.

Begaye recently met with NV Energy CEO and president Paul Caudill, the company’s attorney, and another individual to ask why they are not consenting to a lease extension.

“They said they are ready to sign,” Begaye explained. “They want guarantee that they will have no liability beyond 2019 because their legislators voted saying they cannot use energy from NGS on account of it being a coal-fired power plant.”

Nevada lawmakers in early June 2013 officially moved the state out of the coal business. Legislators approved a landmark energy shift away from coal-fired power plants and mandated investment in renewable energy and natural gas.

If NV Energy agrees to a lease extension, Arizona Public Service Co. will concur, Begaye said.

However, around September and October 2016, APS announced that the price of natural gas is relatively low, making electricity produced by natural-gas-fired plants cheaper and more desirable than NGS’s coal-produced power.

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