WINDOW ROCK – After months of negotiations, the Navajo Nation, alongside all stakeholders, signed the Navajo Generating Station (NGS) Extension Lease Nov. 30 extending operations of the plant for another two years until December 2019.
“The NGS Extension Lease affords the Navajo Nation, NGS and Peabody employees, and impacted communities time to transition into other employment opportunities and energy markets if need be,” said Navajo Nation President Russell Begaye.
Vice President Jonathan Nez congratulated the negotiating team on their work for the two-year extension.
“I’m sure the workers and their families appreciate the work that’s being done to give them some certainty to the end of 2019,” he said.
For now, the extension lease preserves 3,100 direct or indirect jobs for the Navajo Nation.
Bidtah Becker, executive director of the Division of Natural Resources, led the negotiations to extend operations and expressed appreciation for the collaboration and creativity it took to bring the process to an end.
“The signing of the extension lease marks an era of self-determination for the Navajo Nation,” Becker said.
The 35-year lease includes $110 million in lease payments, minimum fuel purchase revenue assurances for the Navajo Nation of $39 million and use of transmission from the NGS transmission station to sites off the reservation. NGS owners are: SRP, the plant’s operator; the U.S. Bureau of Reclamation; Arizona Public Service Co.; Tucson Electric Power Co.; and NV Energy.
Under the lease, the NGS owners agreed that the Navajo Nation could retain additional assets associated with NGS, including the railroad and the lake pump system. The savings for not decommissioning these assets will be shared with the Nation and is more than $18 million.
Mike Hummel, deputy general manager of SRP, said a great deal of hard work from numerous individuals made the agreement possible.
“We are grateful for their effort as this agreement provides meaningful benefits for all involved and creates a path forward during this challenging transition,” Hummel said. “Importantly to us, the new lease paves the way for SRP employees at the plant to remain on the job for up to an additional two years and allows us to fulfill our commitment to redeploying all regular NGS employees to other SRP facilities by 2019.”
Percy Deal of Diné CARE said the agreement makes official what has been known for a long time, that the era of coal operations at NGS and the mine on Black Mesa will soon be over, as coal is ending everywhere.
“The timeline is now set and the clock ticking to go full charge ahead on diversifying the Navajo Nation’s economy, investing in renewable energy and creating sustainable economic development,” Deal said.
Nicole Horseherder of Tó Nizhóni Ání said Navajo leadership needs to seize the moment.
“There is much to be done to prepare for a successful transition away from coal,” Horseherder said. “We need to have a plan for the reclamation and the remediation of our land after decades of pollution. There is also work to be done to discontinue the industrial use of the Navajo Aquifer and from the Colorado River, which has been depleted due to NGS and Kayenta coal mine operations.”
“The lease extension provides some time and money for transition, which is good and needed,” Deal said. “But the Navajo president and the council must now focus on what is needed for the Navajo Nation to transition and become a clean energy producer. The energy markets and power purchasers that want clean energy won’t wait around forever.”
A Navajo Nation Energy Resource Roadmap is currently in progress, according to a press release from the Office of the President and Vice President, which says it will provide Navajo with the insight necessary to make better-informed decisions on energy investment choices and transitioning to cleaner energy.
The roadmap will include information about energy research, emerging technologies and developing technologies that are currently being sold in the open commercial markets today.
The extension lease will cease coal combustion at NGS by Dec. 22, 2019. The facility would then be completely retired by Dec. 22, 2024.
“Rather than continue to depend on the industry, we must continue to diversify our economy because the future of coal needs to be more cost-effective to support furthered operations of the plant,” Begaye said. “We must prepare for long-term prosperity to build a nation that will last far into the future.”