Mark Trahant: Navajo Nation won't be taking over troubled coal power plant

Tuesday, March 26, 2019  

The Navajo Nation’s interest in taking over a coal mine and a generating station has come to an end. That will mean a dramatic change in energy policy, jobs, as well as the loss of millions of dollars in lease payments to the Navajo Nation and the Hopi Tribe.

The Salt River Project announced in 2017 that it would close the 2,250-megawatt Navajo Generating Station by the end of this year. Navajo leaders asked the Navajo Transitional Energy Company to explore acquiring the power plant and a Kayenta coal mine as a way to save the revenue and hundreds of jobs. But there were two major structural barriers. The power plant’s owners wanted a cap on the liability for cleanup, a cost that could be in the hundreds of millions of dollars, and it was getting more expensive for any coal-based plant to sell the electricity to utility companies.

After a series of town halls, the Navajo Nation Council Naabik’íyáti’ Committee last week narrowly rejected a measure to take the next step. Legislation would have supported the Navajo Transitional Energy Company taking over the Navajo Generating Station and Peabody Kayenta Mine. After the council’s 9 to 11 vote, Navajo Transitional Energy issued a release stating they were ceasing their efforts to acquire the power plant and mine.

“For close to 100 years, the Navajo Nation has been a strong traditional energy producer. In that time, government revenue from energy production has supported the nation in becoming the strongest and most robust tribal government in the United States, propelling our people in endeavors our forbearers would have never imagined,” Navajo Nation Council Speaker Seth Damon said in a news release.

The “Navajo Nation Council signaled that it is time for change. In order to develop a healthy and diverse economy that does not overly rely on any particular industry, the 24th Navajo Nation Council will advance new and innovative development initiatives that place our people’s ability to live in our traditional homelands first," the speaker said. "Expanding tourism, alternative energy development, carbon credits, and manufacturing are all ideas that this council is pursuing to ensure that a healthy government can continue to provide for its people.”

The Navajo Generating Station employed more than 500 people, most of the workers Native American. The Kayenta coal mine added another 400 plus jobs. And, as recently as 2014, the Kayenta Mine, which is owned by Peabody Energy, logged a $60.8 million payroll. A study by Arizona State University estimated that 4,649 will be lost, including 857 direct mining and power station high-paying Navajo jobs. The annual losses to the overall Navajo economy will be $932 million. The Navajo Nation also earned some $25 million a year in leases and royalties from the energy operations.

So what’s next?

Erny Zah, a spokesman for the Navajo Transitional Energy Company, told the Associated Press that news will be tough on the families that have relied on the industry. "A decade-long process would have definitely helped explore some newer opportunities that would have created economic stability for northeastern Arizona," Zah said. "And, now, we are going to do our best to see what we can do to help."

However Lori Goodman of the environmental group, Dine’ Care, said: “It’s been known for a long time that coal isn’t the future, but this final certainty is crucial. For anyone who’s been hesitant about moving strongly for renewable energy development, for building our economy in ways that will benefit our communities and our Mother Earth and Father Sky, now there is no reason or excuse to hold back. This moment is why our new council and president were elected. The legacy they will leave for the transition from coal starts now.”

That transition to a new kind of a regional economy will start as soon as next month when Salt River Projects will begin awarding contracts for the plant’s decommissioning and for cleanup projects.

“Often overlooked ... is the likelihood that reclamation work at the mine and the power plant will take years to complete and will require hundreds of skilled employees, many of whom work now at NGS or Kayenta Mine,” said a report by the Institute for Energy Economics and Financial Analysis. “A successful transition following closure of the power plant and the mine complex will require that the responsible parties be held accountable for their cleanup obligations. Public pressure may be required for proper reclamation of Kayenta Mine, which is owned by Peabody Energy, part of an industry that is not especially well known for its reclamation track record.”

Most of the clean up at the plant and at the mine could be finished during the next five years, but “full remediation and reclamation will take years to complete and will require an array of skilled work.” The Institute study says that phase will take at least 35 years and possibly beyond.

The cleanup phase includes reclamation of the land used for mining as well as the cleanup of ash and other toxic waste at the plant site.

The Institute says Salt River Project and Peabody are “obligated to pay for remediation and reclamation — and to do so at prevailing wage and salary levels. Their responsibilities, by contract, include post-closure activities.”

The Institute said documents filed with federal agencies show the number of employees working to cleanup the Kayenta Mine would be about 175.

This will not be the only major coal transition in the West. The same economics -- lower cost natural gas, increasing wind and solar energy -- are hitting other mining operations and power plants.

“In the Powder River Basin of Montana, for instance, the Colstrip coal mine-and-power plant complex that is the economic heart of the area also has a limited future because of the same difficulties facing Navajo Generating Station,” the Institute reports. That region is also discussing a “post coal” future. And the Montana Legislature, like the Navajo Nation just did, is seeking alternatives to delay that inevitable future.

Mark Trahant is the editor of Indian Country Today. He is a member of the Shoshone-Bannock Tribes. Follow him on Twitter @TrahantReports.

This story originally appeared on Indian Country Today on March 25, 2019.