Energy

The Western US’s Largest Coal Plant Has A ‘Fighting Chance’ Of Survival

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Secretary of the Interior Ryan Zinke hailed the Navajo Nation’s ratification of a new lease with operators of the largest coal-fired power plant in the western U.S., staving off its immediate decommissioning.

Zinke said the action gave Navajo and Hopi workers a “fighting chance” to keep their jobs at the coal plant and the mine that supplies it.

Navajo Nation ratified a lease agreement with operators of the Navajo Generating Station (NGS) Tuesday to extend power plant and mining operations through 2019. This gives the Department of the Interior, which co-owns the plant, and other stakeholders time to find ways to keep the NGS viable.

“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,” Zinke said in a statement.

“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,” Zinke said.

NGS and the Kayenta mine that supplies it with coal are important sources of jobs for hundreds of Navajo and Hopi workers. The aging coal plant has struggled to compete with low-priced natural gas and mounting environmental regulations.

NGS is jointly owned by the U.S. Bureau of Reclamation, the Salt River Project, the Arizona Public Service Commission, Tucson Electric Power Company and NV Energy.

Utilities that own NGS voted in mid-February to divest from the plant, opting to build natural gas plants. The new Navajo Nation lease gives the Trump administration another two years to find other owners for the plant.

The Trump administration, however, could also end up buying out other NGS shareholders, or it could work to keep utilities on board. If no new agreement is reached, the plant will be de-commissioned after 2019.

Either way, it’s a hard sell given the costly environmental compliance NGS faces going forward.

NGS operators agreed with Environmental Protection Agency to shut down one of its coal generators after 2019 and add costly emissions control equipment by 2030. The plant already added $1 billion worth of environmental controls in the last two decades.

The Interior Department held talks in March to discuss a plan for NGS going forward. The agency is supposed to act in the best interest of the tribes, and officials don’t want the plant to close and put more than 800 tribal members out of work.

“Now, NGS operations can continue while stakeholders examine opportunities for a new operating partner to extend the life of the plant beyond its original 50-year lease,” Zinke said.

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