PHOENIX (AP) — Navajo Nation political leaders are planning to ask the federal government for subsidies to keep a mine and generating station in northern Arizona open.
The current owners of the coal-fired Navajo Generating Station say it is not currently profitable and voted recently to run it until the end of 2019 and then give up ownership, The Arizona Republic reported Thursday (http://bit.ly/2nPBqFz ).
But even for the facility to remain open that long, the Navajo Nation must approve a new lease agreement. If the current lease isn't extended, the plant must close this year so that the Salt River Project can begin decommissioning it to meet the 2019 lease exploration.
Closing the power plant would lead to the closure of the Kayenta Mine. Losing both operations would hurt the economies of the Navajo and Hopi tribes, whose members depend on the facilities for jobs, government revenues and free coal to heat homes.
Most people on the reservation want the plant and mine to rut at least until 2029. In order to achieve that, two power plant employees, one of whom serves as chairman of a local Navajo political chapter, have written a plan.
That plan would have the federal government subsidize the price of cold sold from the mine to the power plant so the plant can be as cost-effective as natural gas. The amount of the subsidy would vary depending on the price of natural gas.
"We looked back at the auto industry, the banking industry, even some solar companies that were subsidized with millions and millions of dollars," said Jerry Williams, president of the Lechee Chapter House and a 36-year employee of the power plant.
Williams and fellow plant worker Erwin Marks wrote the plan and have had dozens of the 110 Navajo political chapter houses sign on. Williams said no one has rejected the plan thus far.
Votes from Navajo chapter houses are not legally binding, but they serve to influence delegates on the Navajo Nation Council.
Navajo Nation President Russell Begaye says he is supportive of the proposal to keep the power plant open.
"We support the Western Agency Council's resolution and we will continue to work diligently to make sure the power plants and mines continue to be in operation until 2029," Begaye said in a statement. "This will afford the Nation the time needed to transition into solar and other renewable energy operations."
The owner of the Kayenta Mine, Peabody Energy, would have to approve the plan. Effectively the energy giant would have to reduce the price of coal sold to the power plant and receive a subsidy from the government to make up the difference.
"We applaud chapter leadership for their support of the mine and power plant given the importance to jobs, the economy and affordable power for the state," Peabody spokeswoman Beth Sutton said.
Sutton said the company has offered to sell coal to the plant at a lower, fixed price that would make it competitive with other power sources without a subsidy and has hired an energy research firm to evaluate the power plant's economics.