By John Siciliano
February 7, 2018 - Interior Secretary Ryan Zinke is working to save the Navajo Generating Station, the largest coal plant in the West, backing a new coalition that is pushing the plant as a vital resource.
"Interior is committed to working with all parties, to include current or any future owners, to keep the [Navajo Generating Station] operational in support of good-paying tribal jobs," Interior Secretary Ryan Zinke said in a statement Tuesday.
Photo by Andrew Harnik, AP
"Interior is committed to working with all parties, to include current or any future owners, to keep the power plant operational in support of good-paying tribal jobs," Zinke said in a statement Tuesday.
Most of the plant’s owners want to close the facility, but Interior and the mining firm Peabody have been struggling to keep that from happening over the last year. The federal government is a 24 percent owner in the plant. The plant’s closure has been delayed until December 2019 as Peabody looks for new owners to replace the companies and utilities that currently share in the ownership of the massive power plant. Peabody is also a partner in the plant as its sole fuel provider.
Politically, saving the plant has been seen as a demonstration of President Trump’s commitment to keeping coal as a part of the nation’s energy backbone, even though low natural gas prices are one of the principal reasons why several of its owners want to pull out of the plant.
Union workers started a national campaign Tuesday called “Yes to NGS,” which urges the continued operation of the Navajo Generating Station as a vital resource to keep tribal families together.
The United Mine Workers of America announced the broad national labor, industry, and consumer coalition to “advocate for keeping the plant online long-term to secure Arizona’s energy and water future and protect Navajo and Hopi economies.”
The coalition will advocate to keep the plant open into the 2040s, as envisioned when the plant was built. The tribes rely on the plant for water, electricity, employment, and tribal revenue. The Navajo in Arizona lease the land where the power plant resides.
“The Navajo Generating Station was developed on tribal lands by tribal workers who mine the coal and create the power that moves water to benefit families and businesses across Arizona,” said Cecil Roberts, president of the United Mine Workers of America.
Meanwhile, asset management firm Lazard, hired by Peabody to find new owners for the coal plant, is pushing back against plans by water regulators in central Arizona to seek out new sources of electricity soon after the plant's extended deadline expires in December 2019. Lazard sent a letter to the Central Arizona Water Conservation District Feb. 1, which stated that assuming "the plant will close in 2019 is premature and misguided."
It is Lazard's view that the Navajo Generating Station "will be sold and the plant will run well beyond 2019" through the mid-2040s, according to the letter.
The firm said it is in negotiations with investment firms that are looking to purchase the power plant. The final selection of plant investors will be finalized "as quickly as possible this year," it said. It has not released the names of the investors and utility companies that have expressed interest in buying the plant because of the confidential nature of the discussions.
However, interest in the coal plant has primarily come from "well-respected financial investors with strong track records in the power generation sector," the letter read.
"Lazard is encouraged by the number and quality of potential new owners that have submitted ownership proposals for NGS — over 15 private equity firms and power plant operators expressed initial interest," it said.
Peabody has been busy demonstrating the need for the plant. A study by consultants Quanta Technology and funded by the coal company was submitted to Arizona’s state utility commission brownouts and blackouts from Los Angeles to Phoenix.