Business | Environment

Native Sun News: Navajo Nation signs lease for coal-fired plant

The following story was written and reported by Kate Saltzstein. All content © Native Sun News.

FOUR CORNERS — Navajo Nation President Ben Shelly signed an agreement this week approving a 25-year extension of the Four Corners Power Plant lease with added environmental controls and an increase of $7 million per year up from the previous lease which gave the tribe $1.5 million per year.

Earlier this month, the tribal council voted 18 to 2 to extend the lease with Arizona Public Service Corporation (APS) until 2041.

“My priority is to protect over 700 Navajo people employed at both the Four Corners Power Plant and BHP Billiton (the natural resources company that owns the plant), including their families who rely on a steady income,” Shelly said in press release. “This is a step in the right direction and it’s a business decision we did not take lightly.”

Shelly “took into consideration revenues the plant generates for the Navajo Nation, approximately $65 million in taxes, $100 million in employment payroll, and the $7 million for the newly negotiated lease. This totaled $172 million annually to benefit the Navajo Nation, with $72 million going directly to its general fund.”

If the lease had not been signed, the power plant would have closed down resulting in revenue shortfalls for the tribe after July, 2016, Shelly said.

The Navajo Nation Environmental Protection Agency “has stated the plant is in compliance with their environmental standards and they monitor the plant under a voluntary compliance agreement. The Nation’s EPA will further regulate the plant as authority is delegated from the U.S. Environmental Protection Agency.”

The power plant is located in Fruitland, New Mexico, on the Navajo reservation about 25 miles west of Farmington. It provides electricity to 300,000 households in New Mexico, Arizona, California and Texas.

Along with the nearby Navajo Coal Mine, it employs about 1,000 people mostly Navajo. With the new lease, the plant will be required to use the best technology available to reduce sulfur oxide and carbon dioxide emissions. It requires that smog-causing nitrogen oxide emissions will be reduced from 45,000 tons per year to 5,800 tons per year.

New Mexico state senator Lynda Lovejoy, a Navajo from Crownpoint, had written to Shelly saying that the tribe should receive more than $7 million per year from the lease and should inform people better during deliberations on important leases.

Lovejoy said that “$7 million per year for 25 years is very concerning because records indicate that the Arizona Public Service Corporation’s chief executive officers make about $5 million.”

Also, she said that the tribal council’s deliberations should be made public.

“The council’s process that leads to their final decision lacks transparency,” Lovejoy said in an email. “Many of our people do not or cannot access information during the council’s deliberation. The only people who are privy to important information are the council delegates and their staff. And, that is my reason for writing the letter to the Navajo Nation president so that he would make a more concerted effort to get out to the public through the use of public radio to inform the Navajo people about his opinion of the councils’ action. The people have a right to know and have their leaders communicate to them about important decisions that impact our people especially when it relates to a long term agreement.”

Charmaine Jackson, the tribe’s communications director, said that Shelly considered all comments as he looked over the lease but that he did not have a reaction to Lovejoy’s comments.

(Kate Saltzstein can be reached at

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