The imminent shutdown of Arizona’s largest coal-fired energy plant is an environmental win for the state, but an economic headache for the Navajo Nation. The caveat: It may position the Nation to dominate the West’s renewable energy demands.
For the past 11 years,
Skyler June has worked as an operations and maintenance specialist at the Navajo Generating Station near Page, the largest energy-generating coal-fired power plant west of the Mississippi. Not coincidentally, it’s also the West’s biggest single polluting mechanism, spewing out more than 20 million tons of carbon dioxide per year, accounting for nearly a third of Arizona’s climate-warming emissions.
Now, with the aging plant finally set to be shut down on December 22 – an environment-positive decision accelerated by cheap natural gas prices and industry trends – June has a new gig. He’s one of 10 former NGS employees currently being retrained as IT specialists for Salt River Project, the plant’s operator and majority utility owner.
“At the plant, I was working in an environment that was hazardous on a daily basis,” says the 33-year-old, who recently relocated from his home in Kaibeto, a tiny town on the Arizona Navajo Nation about a 40-minute drive from the plant, to Mesa, commuting to his paid internship at SRP’s headquarters in Tempe. “Here, transitioning into an office space, the most I can get hurt is if I forget to hold the handrail and trip walking down the stairs!”
June’s story is one SRP likes to promote, as it epitomizes the company’s commitment to what climate activists would call a “just transition” for its employees as the utility moves into cleaner forms of energy production. While SRP’s pilot tech apprenticeship program only takes care of a handful of the 473 full-time, part-time and contracted workers let go from the plant, June’s success story highlights a laudable start to transitioning NGS’s largely Navajo workforce out of jobs in the declining coal industry and into high-tech careers geared toward renewable energy.
But retraining employees is only a piece of a complex socio-economic puzzle set in motion by the closure of the plant, along with the closure of the Kayenta Mine, straddling Navajo and Hopi land, that serves it.
Since 1964, when St. Louis-based Peabody Energy began operating the mine, both the Navajo and Hopi tribes have received lease payments and royalties on profits made on the coal excavated from their land – initially a paltry 2 to 6 percent, eventually negotiated to 12.5 percent in 1984, where it has remained since. Closing the plant and mine will result in a projected $40 million loss for the Navajo Nation and between an $18 million to $21 million loss for the smaller Hopi Tribe, whose land is surrounded by the Navajo’s. That translates to diminished resources and fewer jobs for a population with an unemployment rate of 48.5 percent, nearly nine times the current U.S. average.
However, there’s a silver lining. As part of the agreement reached with the plant’s utility owners, the Nation will retain numerous assets left behind in the decommissioning. It will also inherit rights to 500 megawatts on the NGS’s transmission system – power lines that provide what the National Renewable Energy Laboratory calls an energy “superhighway” stretching from the Navajo land to Phoenix, Las Vegas and Southern California. This provides, according to a recent NREL report, “the most significant competitive advantage that the Navajo Nation and the Hopi Tribe have for development of new generation resources.”
Add to that an average of 270 sunny days per year, and the Navajo Nation stands as the “largest contiguous premium solar resource area in the West,” says the NREL, with more than 424 square miles of prime development area, equating to more than 3 gigawatts in solar photovoltaic (PV) potential – about the same output as the Palo Verde Nuclear Generating Station near Phoenix, which supplies energy to cities as far away as San Diego .
Simply put, the closing of the NGS puts the Navajo Nation in a unique position to dominate the looming renewable energy demands of the West. And its leaders say they intend to do that.
The decision to close Navajo Generating Station was not made lightly, according to SRP spokesperson Jeffrey Lane, who notes that approval of the closing was made jointly by all four of the plant’s utility owners: Salt River Project, Arizona Public Service, Tucson Electric Power and Nevada-based NV Energy.
“That decision to decommission the plant was based on the rapidly changing economics of the energy industry, which has seen natural gas prices sink to record lows and become a viable long-term and economical alternative to coal power,” Lane says.
Other states withdrawing from coal played a significant part, too. “The economics of operating NGS began to shift in 2006 after a law was passed in California that prevented the Los Angeles Department of Water and Power, a previous NGS co-owner, to approve any life extension of NGS,” Lane says. “A similar law in Nevada was passed in 2013 that would force part-owner NV Energy to leave after 2019 as well.”
After the utilities voted in 2017 to opt out of ownership, the U.S. Bureau of Reclamation, which also owns a 24.3 percent stake in the plant, lobbied hard to find a new buyer to keep NGS running beyond 2019 (the online energy and environmental news site ClimateWire called it “one of the first tests of the Trump administration’s pledge to revive the coal industry”). One of the companies approached was the Navajo Transitional Energy Company, a Navajo-owned business that already owned the mine supplying coal to the Four Corners Power Plant in New Mexico along with a 7 percent stake in that plant’s production units.
But negotiations with NTEC broke down last February when SRP demanded to buy its way out of eventual cleanup operations, in the event NTEC decided to decommission the plant down the road, along with any future liabilities. (In a press release, SRP spun the deal-breaker as “NTEC is not able to provide the required assurances to protect the plant’s owners, their customers and shareholders in the event of a sale.”)
“NGS owners and Peabody have mined and burned coal on Navajo land for 50 years,” said Nicole Horseherder, director of the Flagstaff-based Navajo environmental group Tó Nizhóní Ání, in a written statement issued on behalf of the Navajo community. “That’s generations of contamination they are accountable for cleaning up, and the Navajo Nation should never let them off the hook for that.”
Instead, SRP agreed to work with several contractors to oversee what Lane calls “the largest and most complex power plant decommissioning ever undertaken by SRP.”
Viewed from the park entrance at Lake Powell, the 1,786-acre NGS plant is at once an engineering marvel and an environmental blight, with its three 775-foot-tall smokestacks appearing to tower over the iconic sculpted sandstone buttes of Antelope Canyon to the east. Inside the massive power block, coal hauled by train from the Kayenta Mine some 78 miles away is loaded on conveyor belts, crushed into a powder and sprayed into giant boiler furnaces, which are then heated to 2,000 degrees, producing steam to spin a set of 80-ton turbines that finally convert the heat into electricity.
Some of this electricity is used to drive pumps that haul trillions of gallons of water out of the Colorado River and send it down throughout Arizona via the canals of the Central Arizona Project, which has now opted to purchase its power from solar companies, deemed more cost-effective and reliable than continuing with coal.
Next month all that infrastructure begins to come down, kicking off a project that will continue at least through 2021. “This work includes decontaminating, decommissioning, torch cutting, imploding and demolishing the power block and related structures,” Lane says, “including cooling towers, coal conveyance facilities, limestone crushing facilities and other support facilities.”
The utility has also promised to oversee the restoration of the overall site, “including revegetation using an agreed-upon seed mix.”
Lane says more than 90 percent of the decommissioned plant will be recycled, the catenary (freely hanging power cables) will be removed and the electrical system that powered the coal-carrying rail cars will be disassembled. The massive deconstruction project will keep at least some of the plant’s former workers employed for another couple of years. “Hiring preference for this contract work,” Lane says, “will be extended to members of the Navajo Nation.”
A key part of the agreement adds that the Navajo Nation will retain numerous assets associated with the plant, including various buildings, the railroad tracks, a switchyard, communication sites and the lake pump system – assets Lane says have a replacement value “in the tens of millions of dollars” – along with a cash payment of approximately
“We have plans going forward for every one of the assets,” says JT Willie, director of the Navajo Nation’s division of economic development. “For the new warehouse that was constructed just recently by SRP, we are thinking of making it into a boat storage unit for the Antelope Point Marina over on Lake Powell, because they’ve maxed out their storage capacity there. Within that same building, we’re also interested in getting some small businesses set up along with maybe a coffee shop or little gift shops or bistros.
“The rail system won’t be coming into our possession until the end of 2020 or beginning of 2021,” Willie adds. “Right now the railroad is powered by the generating station through the catenary system, which will be removed, along with the locomotives – so we’ll just be getting the rail system. But with that, we plan to either build our own trains to bring tourists down from Page to the Navajo National Monument or else to take advantage of the ‘Rails-to-Trails’ initiative and turn the whole thing into a running, biking and walking trail.”
The Nation’s biggest plans, however, revolve around the rights to the NGS transmission lines granted by the U.S. Bureau of Reclamation, which Lane says have a competitive value of more than $80 million. “These transmission rights can aid the Navajo Nation in planning and developing their own energy future,” Lane says.
One renewable energy startup, Navajo Power, has already built two large solar farms and is working on a third, and the Navajo Tribal Utility Authority, which currently services the majority of the Navajo Nation, has also built two solar farms near Kayenta.
“We have been hearing proposals from a lot of interested individuals and companies that want to tap into that [500-megawatt transmission system] to develop renewable energy,” Willie says. “It’s a very exciting time for the Nation.”
Arizona’s Navajo Nation has had a conflicted relationship with the coal industry from the get-go. On the one hand, the coal-fired plants circling the territory – NGS, the Cholla Power Plant in Joseph City, Arizona (scheduled to close in 2025) and two along the Nation’s eastern border, the San Juan Generating Station and Four Corners Power Plant (slated to close in 2022 and 2031, respectively, unless new owners are found) – brought high-paying jobs and delivered much-needed tax revenue to tribal members. On the other hand, the mining and burning of the massive coal reserves beneath the U.S.’s largest swath of Native land negatively impacted both the environment and the health of the people.
Feds knew that the NGS would be a major polluter when construction on the plant began in 1969. In an extensive five-part report published by the investigative news source ProPublica in 2015, environmental reporter Abrahm Lustgarten wrote that “an early government analysis warned that burning so much coal would degrade the region’s air by ‘orders of magnitude,’ and federal scientists suggested Navajo and other coal plants in the region could turn the local terrain into a ‘national sacrifice area.’”
Nevertheless, the pollution went unchecked for years. Even when the Obama administration passed the Clean Power Plan in 2015, requiring states to place a cap on power plant emissions and stipulating that Arizona’s plants reduce their carbon outputs by 52 percent, the NGS escaped compliance due to its location on the Navajo Nation, which the EPA treats as a sovereign jurisdiction separate from the states on which it resides. Officials did implement some measures to limit sulfur dioxide and nitrogen dioxide emissions and installed a variety of evaporation ponds and ash landfills to regulate coal combustion residuals, or CCRs, in compliance with later EPA rulings. But overall, the value of the power the plant generated kept it churning, despite its obvious negative contributions to the environment.
Moreover, the power generated by the NGS mostly benefited far-off metropolises like Phoenix, Tucson, Las Vegas and Los Angeles. Meanwhile, an estimated 32 percent of the Navajo Nation’s own residents still lack electricity, largely because so many homes are dispersed miles away from the electrical grid and the NTUA can only cover costs to areas with a population density of at least eight homes per square mile. Below that, individual families are responsible for covering costs to connect to the grid, which can range from $35,000 to $80,000 per mile – too steep for a population where 38 percent live below the poverty line.
Ironically, solar hybrid systems are perfect for off-grid homes, and the NTUA recently procured approximately 200 such systems from a tribally owned and operated solar manufacturing company. Beyond supplying electricity to its own community, the Nation’s efforts could serve as a model to meet the needs of the 1.2 billion people globally who also subsist without residential electrical power, researchers at the U.S. Department of Energy posit.
Further, the development of large-scale renewable energy projects serving other cities throughout the region via the acquired transmission system could make the Navajo Nation competitive with private-sector developers. One recent solar project built on the Moapa River Indian Reservation near Las Vegas is now providing power to the Los Angeles area at a flat rate of less than $24 per megawatt hour, and the NREL projects similar potential on the Navajo and Hopi lands.
Harnessing the sun, wind and water for clean energy is a direction that the Navajo Nation’s leaders ideologically support, too, despite the projected losses in revenue from ceasing coal mining.
“This is nothing new to us as indigenous peoples – being stewards of the land and using what Creator has given us in terms of natural resources,” said Navajo president Jonathan Nez upon the signing of a proclamation embracing renewable energy development in April. “It’s time for our land to heal and become green again. What we’re doing today is planting a seed for our future and for our younger generation.”
The Navajo Nation’s new renewable energy proclamation aims to ensure that the indigenous population is not left out in the current renewable energy rush.
“We recognize that the Navajo Nation has been providing electricity for the Western United States for many years while many of our own people lack basic access to power and running water,” Nez wrote in the proclamation.
“The world around us is moving ahead with clean energy and the Navajo Nation cannot afford to be left behind,” added Nation vice president Myron Lizer at the April gathering in Window Rock. “Especially when we have many sources of clean energy that can be harnessed to benefit our people.”