NENAHNEZAD — Navajo Nation leaders are increasingly looking to the proposed Desert Rock power plant to surge the tribal economy as new environmental rules threaten operations at existing coal-fired plants, potentially costing hundreds of jobs and millions in tribal revenues.

The Desert Rock Energy Project sets itself apart from other generating facilities on the Navajo Nation because the tribe intends to invest more than $350 million into it, earning a 25 percent share in the $4 billion power plant's revenues that would provide millions in additional tribal income, said Doug MacCourt, representing the Diné Power Authority.

Critics of the development, however, claim the alleged economic gains will not trump the health and environmental costs to be paid by the Navajo and other residents of the Four Corners over the lifespan of a third coal-fired power plant within a single 30-mile radius if all three exist.

Desert Rock, proposed to be built in Nenahnezad about 25 miles southwest of Farmington, describes itself as a modern “ultra low” emissions facility that will produce a fraction of the chemicals and greenhouse gases emitted by the other two decades-old power plants in the area. The project, developed in conjunction with Texas-based developer Sithe Global, is on hold after the Environmental Protection Agency in April revoked an air quality permit for the facility, regardless of the proposed improvements
MacCourt
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describes Desert Rock as the key to the tribe's future.

The Navajo investment in Desert Rock, which would be paid almost entirely by borrowing from bank and bond markets, would be repaid over a 25-year period.

It likely would require payments less than what the Navajo Nation projects as its tax-free revenues from electricity generation. The tribe could opt to purchase rights for as much as 49 percent of the plant. However, the additional share is available only at a higher market rate.

The tribe anticipates earning more than $14 million in profit in the first year of Desert Rock's operation with a 25 percent share, and more than $46 million after
10 years of operation, MacCourt said.

“As you start getting out into year 25-plus, you're talking about really significant numbers for that 25 percent stake,” MacCourt said. “When you couple that this will be financed largely through the security on the revenue stream, it's pretty much a no-brainer.”

Utilizing Navajo resources

The two existing power plants on Navajo land could be forced to reduce operations and lay off as many as 300 plant workers if the EPA opts to require $1 billion in haze-improving environmental upgrades under consideration, company officials claim.

A project like Desert Rock capable of adding new, high-wage jobs is critical to the Navajo Nation, where a reported 50 percent of residents are out of work, according to the Navajo Nation Office of the President and Vice-President.

Similar to the Four Corners Power Plant in Fruitland and the Navajo Generating Station in Page, Ariz., Desert Rock would provide an additional 400 full-time plant operations and mining jobs to Navajo workers and more than $50 million in tribal taxes and natural resource royalties. The four-year construction of Desert Rock also will employ more than 1,000 temporary workers.
Navajo Nation President Joe Shirley was unavailable to comment on the Desert Rock project.

The bottom line for the Navajo Nation will continue to be supporting the needs of the community, and revenues and jobs provided by the project will go a long way to help improve the quality of life for tribal residents, Shirley spokesman George Hardeen said.

“Ultimately it's for jobs. That's Joe Shirley's perspective; jobs and revenue for the Nation to fund the services it provides,” he said. “It takes money to address these, and Desert Rock is an important component to help generate the revenue needed. ... If we could make the same amount of money selling incense and candles that we could make selling electricity, we'd be in the incense and candles business. But energy production is and historically has been the most lucrative business wherever you go.”

Taking an opportunity to create new revenues utilizing the 200-year coal supply available through the BHP Navajo Mine, the tribe has a unique opportunity to combine its investment in the facility with its rights to a large coal supply. It also could profit from a growing regional demand for electricity, Desert Rock advocates claim.

“With this power plant, they get it from a tax side, they get it from a (land) lease side, they get it as a revenue site,” said Frank Maisano, an attorney representing Sithe Global and spokesman for the Desert Rock project. “There's a multitude of ways that the coal benefits them, and multiplies itself into direct benefit for the Navajo people.”

Not a fix-all

Critics of Desert Rock argue the project is seen by some Navajo leaders as a fix-all solution to Navajo problems, welcomed without taking into consideration the long-term consequences of creating a third power plant in the region.

“The tribe is just taking whatever pennies they can get, and whatever pennies they can get, they think it's going to be able to solve all the financial problems that the tribe has,” said Dáilan Long, with Diné Citizens Against Ruining Our Environment. “I think the tribe doesn't acknowledge some of the environmental costs, or some of the health costs, or some of the social costs that are already being incurred.”   

Although the project has promised dramatically lower chemical emissions, better research is needed to understand how the chemical byproducts continue to burden human health in northwest New Mexico, where numbers of children requiring medical treatment for asthma and other respiratory conditions annually increases, critics contend.

But in the cost-benefit analysis that weighs community health against economics for the Desert Rock project, the prospect of new money continues to win out among tribal decision makers, Long said.

Another concern cited by critics is that any new money created by the power plant project will go to fund pet projects of Navajo leaders, rather than reinvested money into the Nenahnezad and Burnham communities directly affected by the power plant blight and pollution.

The Nenahnezad Chapter, unanimously approving the Desert Rock site lease in 2004, requested $2 million for a community health facility, “a percentage” of the plant royalties be returned to the chapter for capital projects, annual pro-rated power plant funds to pay chapter scholarships and needed road construction equipment, according to the chapter resolution.

Chapter President Lucinda Bennalley could not be reached for comment regarding the status of the chapter requests.

“Proponents of the power plant are using economic development as an excuse. We can't use an excuse and put the lives of the people at risk. We can't just be thinking in dollar signs,” said Elouise Brown, president of the anti-Desert Rock group, Dooda Desert Rock. “No matter how much money this proposed plant generates, it's not going to be enough to keep the people healthy, and our lives are not worth dollars in any amount.”

James Monteleone:
jmonteleone@daily-times.com