With coal dying, Arizona utility offers $169 million deal with Navajo
November 11, 2020
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by admin

A train cuts across the scrubby Southwest.
Enlarge / This electric train carried coal from the mines to the Navajo Generating Station, which has now shut down.

The physics of climate change dictate that we must move on from fossil fuels to avoid expensive and deadly consequences, but that shift obviously comes with pain for communities and businesses tied to the fossil fuel industry. This may bring to mind coal-mining communities in places like Kentucky and West Virginia, but it’s also playing out across the Navajo and Hopi lands in Arizona and New Mexico.

There are several coal plants located in or near the Navajo Nation, fed by associated coal mines, and staffed by Navajo and Hopi workers—a major source of jobs. Of these, the Navajo Generating Station and Kayenta mine has already shuttered, while the Cholla Power Plant is shutting down over the next few years. The Four Corners plant in New Mexico has seen its planned 2031 retirement date accelerated.

There are several reasons for this. Older coal plants have been retiring across the US as the economics favor cheaper natural gas and renewables. Additionally, the electric utility Arizona Public Service (APS), which owns part of each of these three plants, had a change in leadership at the beginning of the year. New CEO Jeff Guldner announced a plan for the utility to reach zero emissions by 2050, with 45 percent of its electricity from renewables by 2030. That was a shocking reversal considering that APS spent nearly $40 million to fight a 2018 ballot proposition that would have required 50 percent renewables by 2030.

In October, Navajo Nation President Jonathan Nez testified before the Arizona Corporation Commission to propose that APS provide at least $193 million to help the communities affected by the closing coal plants. Nez wanted consideration for workers who might lose their jobs, cooperation to help develop renewable energy projects to replace the jobs and income, and aid expanding access to electricity. A significant number of Navajo and Hopi homes are still not connected to the grid—a long-term challenge given the expense of remedying it.

Last Friday, APS submitted a proposal in response, The Arizona Republic reported. It would provide around $144 million in various measures. That includes $100 million over 10 years in direct funding and $2.5 million per year from the Four Corners plant’s closure through 2038. APS would also provide $10 million to fund electrification projects and promise to run new lines 2,000 feet toward homes before charging for work.

Solar and wind

APS also indicates a willingness to pursue renewable projects on the Navajo Nation, requesting proposals for 250 megawatts in new projects now and another 350 megawatts after the closure of Four Corners. A 55-megawatt solar array is already operating near the now-retired Kayenta mine—the first step toward new sources of energy in the area.

It’s worth noting that APS is currently seeking permission from the Corporation Commission for a rate increase that would increase revenue by about $169 million. But the utility also wants to present this deal as a way to do right by communities they’ve long relied on.

President Nez is supportive of the APS proposal. “This Just Energy Transition Plan will position the Navajo Nation as a national leader in solar and wind energy and will help launch a new era of electrification of homes on the Navajo Nation,” Nez said.

In his testimony last month, Nez said, “The Nation has been a foundational-but-unacknowledged partner in Arizona’s remarkable growth over the last 75 years. The Nation is proud of its Navajo workers at power plants and mines, but understands that the ground is shifting underneath its feet again.”

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