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Navajo Nation to pay costs for 500MW transmission line

Noel Lyn Smith
Farmington Daily Times
The Navajo Generating Station is pictured on Aug. 20, 2019 near Page, Arizona.

FARMINGTON — The Navajo Nation is taking steps to use the 500-megawatt transmission line that was utilized by the defunct Navajo Generating Station in Arizona.

Under the agreement for usage, the tribe will pay $1.9 million to the U.S. Bureau of Reclamation for annual capital costs for the line.

The tribe hopes to use or market the transmission line for electrical power, according to a Dec. 28 press release from the Navajo Nation Office of the President and Vice President.

The release states that the rights to the transmission line were part of the extension lease negotiated in 2017 between the tribe and owners of the coal-fired power plant, which ceased operation on Nov. 18, 2019 and now faces decommission activities over the next three years.

As part of the extension lease, the tribe can use or market the transmission line beginning on Dec. 23, 2019 and for 35 years.

A stipulation in the extension lease requires the NGS ownership to cover the tribe's operation and maintenance costs related to the transmission line for 10 years, but the tribe is responsible for all other costs associated with the line.

Transmission lines take power away from the San Juan Generating Station.

The annual payment to the Bureau of Reclamation – which this year is due on Jan. 3 – is the result of a separate agreement the tribe entered with the agency and the Western Area Power Administration in late 2017, which further detailed the tribe's rights and obligations related to the transmission line.

The Navajo Nation Council approved on Dec. 19 using $1.9 million from the Unreserved Undesignated Fund Balance to pay the amount due to the Bureau of Reclamation for capital costs incurred for 2020. Navajo Nation President Jonathan Nez supported the council's action when he signed the bill on Dec. 28.

The legislation that requested the amount from the UUFB states that revenue projections for marketing the transmission line in 2020 and in 2021 would range from $888,000 for 20% to $7.2 million for 100%.

The bill also approved setting up a fund to receive and hold revenue generated by using or marketing the transmission line.

The fund, once approved by the Budget and Finance Committee, would be used to repay the $1.9 million taken from the UUFB, to pay the capital costs for 2021 and fund energy-related projects recommended by the tribe's Division of Natural Resources.

Noel Lyn Smith covers the Navajo Nation for The Daily Times. She can be reached at 505-564-4636 or by email at nsmith@daily-times.com.

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