Arizona miners to rally at Capitol for power plant future

Source: San Francisco Chronicle 

PHOENIX (AP) — Hundreds of miners and their relatives will join leaders from the Navajo Nation, the Hopi Tribe and the United Mine Workers to rally at the state Capitol to keep open the coal-fired Navajo Generating Station, which provides power to pump water from the Colorado River to cities, tribes and farmers in Arizona.

The gathering Wednesday in downtown Phoenix is the latest effort by employees of the 2,250-megawatt station near Page, Arizona, to save their jobs. Utility operators say the station is more expensive to run than gas-burning plants.

The Hopi Tribe and coal mining groups last month sued the operator of an Arizona aqueduct system known as the Central Arizona Project to halt the plant’s closure when its lease expires in late 2019.

The lawsuit in U.S. District Court contends that federal law obligates the district to buy power from the station. A recent letter from the Interior Department raised the question of whether a 1968 federal act that obligated purchase of electricity from the station should be considered when deciding its future. Congress constructed the station rather than build two dams on the Colorado River for hydroelectricity so Arizona could move its water.

Chicago-based Middle River Power, a portfolio company of Avenue Capital responsible for managing its power plant investments, said in a May 2 letter to the water conservation district’s board president that it was discussing a possible plan for the station’s future with the plant’s operator and owners and federal and tribal officials.

“We are immediately advancing discussions with the existing non-federal owners, tribal leadership and other stakeholders to discuss next steps for a functional transition to new ownership,” wrote Mark Kubow, Middle River Power’s president. Company officials did not immediately respond to a request for more details.

The Salt River Project, a utility that operates the generating station, said Tuesday there is no deal. The other utility participants in the plant are Arizona Public Service Co., Tucson Electric Power Co. and NV Energy. The Los Angeles Department of Water and Power in recent months sold its stake to Salt River.

Salt River Project spokeswoman Scott Harelson said the station’s owners decided to end its participation in the plant because coal generation cost so much and they had “not received an offer or entered into negotiations with any potentially interested party” to buy it.

The Central Arizona Project, run by the Central Arizona Water Conservation District, is a primary customer of the plant, using the power to move water to residents and businesses in the state’s Maricopa, Pinal and Pima counties. The plant also provides electrical service to other customers in Arizona and parts of Nevada.

Coal is abundant on northwestern Arizona’s Navajo and Hopi reservations, with both groups heavily reliant on the plant’s revenues to fund their governments and services for tribal members.

The Central Arizona Project board is meeting Thursday to consider alternative power sources and the plant’s future.

The plant’s sole coal supplier, Peabody, has hired investment firm Lazardo Frerers to find a new owner for the station and the Kayenta Mine.

Written by: Anita Snow, Associated Press