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Coal miners rally at the state Capitol in bid to save Navajo Generating Station

Ryan Randazzo
The Republic |
More than 100 coal miners rallied at the state Capitol on June 6, 2018,, saying a new buyer for the embattled Navajo Generating Station coal plant could make an offer to buy the facility.

More than 100 coal miners rallied at the state Capitol on Wednesday, calling for officials to allow time for a new company to buy the embattled Navajo Generating Station coal plant.

The miners said the purchaser needs three months to make an offer and they want the board of directors that oversees the Central Arizona Project canal to delay making deals to purchase power from other sources.

The CAP canal gets most of the power to pump water from the Colorado River to Phoenix and Tucson from the coal plant near Page. Its board of directors is scheduled to vote Thursday on two deals to get power from other sources after the expected 2019 closure of the coal plant.

"I don't think CAP needs to rush it right now," said Marie Justice, who drives trucks at the Kayenta Mine and serves as president of the United Mine Workers of America Local 1924.

"We want to give the prospective owners the opportunity to bring (the plant owners) a proposal," said Justice, who is in her 30th year working at the mine.

The deals the Central Arizona Project is considering would provide electricity for less than the coal plant charges, CAP Deputy General Manager Tom McCann said.

But those deals only represent about 14 percent of the CAP's energy requirements, and McCann said the canal still could buy power from NGS if the plant's new buyers can offer power at competitive prices.

Salt River Project and the other electric companies that own the coal plant plan to close it next year because cheaper power is available from natural gas plants.

If the plant closes, the coal mine 80 miles away on Navajo and Hopi land will also close. The mine delivers its coal to the plant via electric railroad and has nowhere else to sell it.

When running at full capacity, the mine and plant employ about 750 mostly Native American workers.

Middle River is proposed buyer

Speakers at the rally said the proposed buyer is Middle River Power, the power plant affiliate of a company called Avenue Capital Group. Their interest in buying the plant was reported in April.

Avenue Capital is based in New York and focuses on "distressed" investments. Middle River Power is based in Illinois and is an investment company that buys power plants.

Some environmentalists who hope to see the coal plant close have suggested Middle River would cut costs and not look out for the interests of workers.

Justice said she and her fellow workers are not concerned about that.

"We just want to survive," she said, adding that many young workers at the facilities will have to leave the reservations to find work if the plant and mine close.

"We want them to be able to have a future and be able to raise their families on their homeland," Justice said.

CAP getting solar cheaper than coal

One deal CAP is scheduled to vote on would lead to construction of a 30-megawatt solar power plant, which would sell power to the canal for 20 years. The price for power in that deal is 2.5 cents per kilowatt-hour, McCann said.

That price is among the lowest ever for power from a solar plant. By comparison, the Solana Generating Station near Gila Bend sells Arizona Public Service Co. power for about 14 cents per kilowatt-hour, though that power is more valuable because it is available after dark, thanks to that plant's storage capabilities.

The cost of power from the coal plant costs about 3.5 cents per kilowatt hour today, McCann said, but that price is lower than normal because SRP is not paying for maintenance that would be needed if the plant were to run after 2019. The cost of that maintenance would normally be reflected in the cost of power.

In 2016, when the plant was operating and conducting maintenence as usual, the cost was about 3.8 cents per kilowatt hour, he said.

The other contract CAP is considering is with Salt River Project to get power from a variety of sources for five years, and also is cheaper than what the canal is getting from NGS.

Interior Department warned CAP

Speakers at Wednesday's rally referenced a letter sent last Friday to CAP by President Donald Trump's appointee overseeing the U.S. Bureau of Reclamation, which is a part owner of the coal plant.

Timothy Petty, whom Trump appointed last year as assistant secretary for water and science, told CAP leaders that they are bound by law to take the coal plant's power.

CAP officials issued a statement that said the canal operators have been working with the Bureau of Reclamation and Department of Interior since the electric companies decided to close the power plant.

"Native American tribes, municipal water providers and agricultural districts in central Arizona — more than 5 million people and 350,000 acres of irrigated land — depend on CAP for the reliable delivery of reasonably priced water," the statement continued. "Since the NGS owners decided last year to close NGS at the end of 2019, CAP has been working diligently to ensure we will have the energy we need to deliver water in 2020. If a new NGS ownership group materializes and can provide competitively priced power, CAP remains open to considering that alternative."

The statement makes clear that CAP does not believe it is legally bound to purchase power from the coal plant if new owners take over and the price is not competitive.

SRP officials have said they are willing to work with new ownership, but time is running out to negotiate the required leases and environmental agreements required for a new owner. They said at this point it would be difficult to accomplish those tasks without at least a temporary shutdown of the plant at the end of 2019.

Speakers at Wednesday's rally asked for support from everyone from Gov. Doug Ducey to state lawmakers to the president, mentioning President Donald Trump's campaign promises to help the coal industry.