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A dragline excavator moves a load of coal earlier this month at the Navajo Mine.
NAVAJO MINE — The Arizona utility planning a partial shutdown of Four Corners Power Plant intends to operate the two remaining stacks for decades, a spokesman said.

"We expect that those would remain in service through July of 2041," said Damon Gross, a spokesman for Arizona Public Service Company.

APS expects to pay $426 million for environmental upgrades on units 4 and 5, Gross said.

Pending regulatory approval of a $294 million deal announced last month for APS to buy a 48-percent stake in Four Corners' units 4 and 5 from Southern California Edison, APS would then shut down the three oldest units at Four Corners in about two years.

The partial shutdown would reduce demand for coal by about 30 percent at Navajo Mine, the sprawling surface mine southwest of Farmington that is Four Corners' sole fuel supplier.

Mine engineers are working to determine how to meet Four Corners' future fuel needs as coal seams in areas that have long been mined become exhausted.

"We're planning the mine to supply those units for the long term," said Pat Risner, a spokesman for mine operator BHP Billiton.

The 47-year-old mine has grown south from the power plant as nearer coal supplies were exhausted. Area I is completely tapped out, while Area II is nearly so. Most mining now occurs in Area III.

A federal judge on Oct. 28 blocked BHP's plan to mine in an area known as Area IV North. Judge John L. Kane of the U.S. District Court for the District of Colorado remanded a necessary environmental permit.

Kane ruled that the federal Office of Surface Mining Reclamation and Enforcement failed to conduct an adequate review or provide meaningful public notice to Navajo communities, and ordered the federal agency, part of the Interior Department, to address the issues.

The ruling could delay BHP's ability to mine in the area for years, or even permanently block it. That leaves mine engineers scrambling to determine how to supply the 8.8 million tons of coal needed annually by the adjacent power plant, which provides electricity to 300,000 homes in the Southwest.

"Until we get in IV North, we would have to mine more coal from Area III," Risner said.

The mine is vitally important to the Navajo Nation, on whose land it is located. The mine employs 445 permanent employees, of whom 86 percent are Navajo, earning an average of $75,000 per year on the Navajo Nation's eastern border. The operation contributes millions annually to the Navajo Nation's budget.

"These jobs have been here for 50 years," Risner said. "We've got third-generation Navajo coal miners here."

Shutting down units 1, 2 and 3 would result in the loss of 100 to 200 jobs at Navajo Mine, and another 190 at the plant, officials said. Both employers plan to avoid layoffs if possible, cutting jobs through normal attrition and retirements by late 2012.

"At this point, we believe over two years we can manage it," Risner said. "It's the right thing to do, to do it through attrition and retirement as much as we can. Our aim is to not force layoffs of any kind if at all possible."

Navajo Mine is entirely reliant on Four Corners, and vice versa.

Each year, mine officials receive from the utility a forecast of needed coal. Engineers plan the mining around that forecast, keeping track on a daily basis of the power plant's needs. The mine stockpiles 800,000 to 900,000 tons of coal, or about 10 percent of Four Corners' annual appetite.

A private rail line transports the coal to the power plant 14 miles away, where its smoke-topped stacks can be seen rising over black mounds of coal.

The utility's proposal would cut the plant's generating capacity from 2,040 to 1,540 megawatts while reducing emissions of carbon dioxide and other harmful substances.

The plan is part of BHP's negotiations with the utility on an extension of their fuel agreement. The agreement expires in 2016.

Environmentalists have sought to force Navajo Mine to clean up its operations. San Juan Citizens Alliance, a Durango-based advocacy group, and Diné Citizens Against Ruining Our Environment brought the suit that prevents Navajo Mine from expanding into Area IV North.

Mike Eisenfeld, New Mexico energy coordinator for San Juan Citizens Alliance, said the judge's ruling indicates the federal agency must do more to comply with National Environmental Policy Act, which requires extensive reviews of such projects.

"They need to do a proper analysis," he said.

Meanwhile, BHP Billiton has readied Area IV North for mining, Risner said.

"It's all prepared and ready to go whenever we get the issues resolved," he said.

Chuck Slothower:

cslothower@daily-times.com