Threatened generator concerns O’Halleran

Congressman grapples with potential job losses

Newly elected U.S. Rep. Tom O’Halleran has been representing Arizona’s 1st Congressional District barely a week and now faces a potential economic crisis with the threatened closure of the Navajo Generating Station.

“We want to find out how we can best serve the process so we don’t lose 1,000 high-paying jobs in that area,” O’Halleran said Thursday.

The power plant on Navajo land near Page, supplied by a coal mine on Navajo and Hopi land, is no longer generating electricity at a competitive price. The utilities that own it are considering all options, including closing it this year.

The current lease with the Navajo Nation expires at the end of 2019, and if the owners are not going to run it beyond that, they need to shut it down later this year to have it dismantled by the end of the lease.

The plant is owned by the U.S. Bureau of Reclamation, Salt River Project, Arizona Public Service Co., Tucson Electric Power and NV Energy, which plans to withdraw.

O’Halleran said he is concerned that closing the plant would further weaken the economy in northern Arizona and on the reservations.

Many environmental groups want to see a transition from coal-generated power to renewable solar and wind projects in the region. Those technologies won’t have the economic benefit of the coal plant, O’Halleran said.

“I really haven’t seen the renewable-energy jobs that have those types of wages associated with them,” he said. “That would be one of the problems. During the initial construction maybe. But the long-term maintenance issues involved in those plants are much different.”

The plant owners have agreed to shut one of the three units or curtail operations by one-third, and to add new environmental controls on the other units in 2030 to reduce the haze

“We want to find out how we can best serve the process so we don’t lose 1,000 high-paying jobs in that area.” U.S. REP. TOM O’HALLERAN ARIZONA’S 1ST CONGRESSIONAL DISTRICT

created by burning coal.

Converting to natural gas?

Natural gas burns cleaner than coal. O’Halleran said converting the coal plant to natural gas is one possibility, though that move still would affect jobs at the mine.

“If they are going to be able to move to gas versus coal at that plant, they obviously would not have to do a lot of the work to bring that plant into compliance (with the Environmental Protection Agency air regulations),” he said. “It would far exceed the compliance issues.”

But O’Halleran said that while natural-gas prices are low now, they can be volatile and a long-term bet on them at the expense of coal might not be safe.

“We don’t know what the world is going to be doing 13 years from now,” he said.

Officials from SRP and the Navajo Nation said renegotiating more favorable lease terms would not significantly change the economics of the plant.

“The primary driver is the cost of fuel,” said Mihio Manus, communication director for Navajo Nation President Russell Begaye’s office. “Coal is no longer economical, whereas natural gas has taken the lead in being an economical fuel source.”

Manus said he does not agree with environmental groups that say the threat of a closure is an attempt by SRP to secure better lease terms.

“Unless the price of coal can be negotiated by at least 35-40 percent less, it remains uneconomical,” Manus said.

SRP spokesman Scott Harelson said no changes are being sought in the lease terms.

“The owners of NGS negotiated a lease extension with the Navajo Nation in good faith, and if a decision is made to continue operations of the plant beyond 2019, those are the terms we will operate under,” he said.