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Biggest Coal Plant in West Facing Closure

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A major coal-fired power plant in northern Arizona is due to shut down, resulting in dire consequences for the local economy unless something can be done quickly.

In operation since the 1970s, the Navajo Generating System has not only provided electrical power for customers across the region for decades, it is also a crucial source of employment and revenue for the largest Native American reservation in the country. The 2,250-megawatt plant provides more than 700 jobs, with Navajo and Hopi people filling the vast majority of them.

Navajo Generating System also accounts for 22 percent of the Navajo tribe’s total revenue and a whopping 85 percent for the Hopi.

It was originally intended for the plant to remain open until 2044. But in another example of how cheap natural gas has upended the coal industry, NGS has become too expensive to keep running. Salt River Project, the operator and major stakeholder of the plant, announced it would be closing NGS by the end of next year.

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“Right now all, the indicators are this plant is going to shut down. It’s going to be decommissioned,” Navajo Nation President Russell Begaye said Wednesday.

Navajo and Hopi leaders visited Washington, D.C., on Thursday to speak at a House Natural Resources Committee hearing on the impending closure. A common theme among most of the eight speakers was the monumental impact a defunct NGS would have on the Hopi and Navajo people — an already impoverished community.

“We already suffer from an unemployment rate of more than 60 percent,” Hopi tribe Chairman Tim Nuvangyaoma told committee members. “I cannot stress enough the severity of the financial consequences for my tribe if NGS closes.”

Nuvangyaoma and LoRenzo C. Bates — a member of the Navajo National Council who also spoke at the House Committee meeting — pointed to the difficulty in reducing dependency on NGS as it is difficult to diversify their landlocked economy.

Should the government provide subsidies to keep this plant open until a buyer is found?

However, not all hope is lost for community members dependent on the plant. If a new owner took over NGS, the facility would be able to keep its doors open. Lazard, an investment firm hired by Peabody Energy, is leading an effort to find a new buyer.

“Fifteen [potential buyers] expressed interest and were asked to provide an initial proposal for NGS. By the end of September [2017], we had received five initial proposals to keep NGS alive. We believe that selecting a credible potential investor to engage with key stakeholders would produce the best chance of success,” Lazard Vice Chairman George Bilicic told committee members.

Through proper management, NGS is fully capable of providing power below market rates and compete with natural gas, Bilicic said.

As the search continues for a new buyer to save NGS, not everyone in the Navajo community wants to see the major coal plant remain open. A group of Native American environmentalists have long derided NGS, arguing its existence has polluted the surrounding environment.

“The fact that no company has stepped forward to buy NGS to this day speaks to how untenable the ‘Yes to NGS’ campaign led by Peabody is,” said Lori Goodman, spokeswoman for Dine’ Citizens Against Ruining our Environment, in a statement to The Daily Caller News Foundation.

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Goodman is referring to Peabody Energy’s “Yes to NGS” campaign to save the plant from closing. Goodman wants to see more investment in renewable energy sources instead.

“There is a better way — we can transition to renewable energy sources. We need our Navajo Nation leadership to support these initiatives. Peabody’s lies are doing more harm than good, and they are stifling our optimism for the future,” Goodman said.

This story originally appeared on The Daily Caller News Foundation website.

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