NTEC examining partial ownership of power plant

Noel Lyn Smith
Workers are seen guiding vehicles on the main road earlier this year at the Four Corners Power Plant in Fruitland.

FARMINGTON — The Navajo Transitional Energy Co. has received the green light from its board of directors to pursue the option of acquiring an ownership interest in the Four Corners Power Plant.

In a press release issued Monday evening, NTEC officials stated they are reviewing the possibility of obtaining a 7-percent interest held by El Paso Electric Co. in units 4 and 5.

The release states NTEC notified the Arizona Public Service Co., which is the power plant's majority owner, about the plans to exercise the option to purchase that interest.

NTEC's board of directors approved the action during a Dec. 18 special meeting, according to the release.

Erny Zah, NTEC spokesman, said the company's option to pursue ownership was included in the coal sales agreement with APS.

NTEC owns Navajo Mine, which is the power plant's sole supplier of coal.

"We continue to support the Navajo Nation and welcome them as a joint owner of the Four Corners Power Plant," APS spokesman Steven Gotfried said in an email Monday evening.

A call placed late Monday seeking comment from El Paso Electric was not returned.

Steve Gundersen, NTEC board chairman, said in the release that the company is "positioning to move into the power generating industry."

"This acquisition would enable NTEC to bolster Navajo energy security and to be at the forefront of innovation and progress," Gundersen said.

NTEC expects to complete the acquisition by July 2016, according to the release.

APS owns 63 percent of the generation from units 4 and 5 followed by the Public Service Company of New Mexico with 13 percent, then the Salt River Project with 10 percent, and Tucson Electric Power and El Paso Electric with 7 percent each.

On Feb. 17, El Paso Electric entered into an asset purchase agreement to sell its entire interest to APS, according to a filing with the Securities and Exchange Commission.

El Paso Electric notified the other owners in 2013 that it will not extend its participation in the power plant beyond July 2016, according to the SEC filing.

Zah said NTEC hired Navigant Consulting Inc. to complete an independent power market analysis based on El Paso Electric’s ownership.

The cost for assuming ownership "cannot be disclosed until negotiations are closed with APS, El Paso and NTEC," Zah said.

NTEC's release states the company will work with APS and the other owners to install emission reducing technology, including selective catalytic reduction equipment on the two units.

During an event for the power plant in June, Mark Schiavoni, APS executive vice president and chief operating officer, said the retrofit would cost $635 million and would be in place by July 2018.

The technology is designed to reduce nitrogen oxide emissions to meet federal haze regulations.

"We understand that energy production has to continually become more clean and efficient and we look forward to the possibilities of working closely with APS and other power plant owners to raise the standard of cleaner energy production on the Navajo Nation," NTEC CEO Clark Moseley said in the release.

Moseley said in the release that experience could be gained from the purchase and it "could prove to be invaluable to the future success of NTEC energy projects."

Noel Lyn Smith covers the Navajo Nation for The Daily Times. She can be reached at 505-564-4636.