Plans To Save Largest US Coal Plant In The West Hit A Roadblock

Negotiations to keep one of the biggest coal power plants in the U.S. in operation have stalled, placing hundreds of Native American workers at risk of losing their jobs.

Owners of the Navajo Generating Station — a 2,250-megawatt coal-fired plant in northern Arizona — say talks to transfer ownership of the facility have reached a standstill, and they are moving forward with plans to decommission the plant by Dec. 22. The announcement is the latest in a string of bad news for supporters of the Navajo Generating Station (NGS).

Salt River Project, Arizona Public Service, NV Energy and Tuscon Electric Power — all joint owners of NGS — announced in February 2017 that they would be closing the plant down by the end of 2019, claiming its continued operation to be unprofitable. Since that time, there has been a concerted effort to find a buyer and save the more than 700 related jobs to the plant.

Middle River Power, a private equity firm based in Chicago, had been in talks to acquire NGS, but backed out in September after failing to find enough potential buyers of power. Since that time, the Navajo Transitional Energy Company — a coal company created and owned by the Navajo Nation — is actively pursing its options on buying the plant.

However, talks reached an impasse when NGS owners asked the Navajo Transitional Energy Company (NTEC) to take on any known and unknown liabilities, such as land restoration and whatever environmental regulations may be enacted in the future. The Navajo have framed the pledge as unnecessary.

“While the owners have been willing to explore avenues for NTEC to assume ownership of NGS, NTEC is not able to provide the required assurances to protect the plant’s owners, their customers and shareholders in the event of a sale. Because of the time challenges to meet their decommissioning obligations, the owners will continue to move forward with plans to decommission NGS later this year,” Salt River Project spokesman Scott Harelson said in a statement.

The breakdown in negations puts hundreds of jobs at risk, and would likely devastate the surrounding Native American communities. The vast majority of the employees working at NGS — and the Kayenta Mine that supplies its coal — belong to the nearby Navajo Nation and Hopi tribe. In fact, the NGS plant and mine together provide nearly $40 million in annual revenue to the Navajo Nation. Loss of the coal plant would be brutal for a community that already suffers from sky-high unemployment rates.

However, not all is lost for NGS supporters.

Navajo Transitional Energy Company leaders are still hopeful they can reach a deal, and the Navajo Nation Council will continue meeting with company representatives in order to reach a compromise.