Trump appointee could help keep Navajo Generating Station open

Ryan Randazzo | The Republic | azcentral.com

Show Caption Hide Caption Coal miners fight to keep Navajo Generating Station open Coal miners and their families rally at the Arizona Capitol on Feb. 6, 2018, to demand the Navajo Generating Station remain open. Nick Oza/azcentral.com

President Donald Trump's appointee overseeing the U.S. Bureau of Reclamation could halt closure of the Navajo coal plant by forcing the Central Arizona Project to buy its power.

Timothy Petty, whom Trump appointed last year as assistant secretary for water and science, wrote to CAP on Friday, telling the agency's leaders that they are bound by law to take the coal plant's power.

A guaranteed customer such as CAP would make the power plant more attractive to potential buyers, who could take over from the utilities that plan to close it next year.

RELATED: 5 things to know about Navajo Generating Station's possible closure

Salt River Project and the other utilities that own the plant say it is no longer economically viable.

In addition to SRP, Arizona Public Service Co., Tucson Electric Power and NV Energy, the Bureau of Reclamation owns a share of the plant. The bureau's share is used to power the CAP canal that pumps water uphill from the Colorado River to Phoenix and Tucson.

In his position at the Interior Department, Petty oversees the Bureau of Reclamation and the U.S. Geological Survey.

CAP officials have said it is cheaper to buy power on the market from natural-gas plants than to take power from the coal plant.

But Petty said they don't have that choice. He said the Colorado River Basin Project Act of 1968 dictates that the canal must use the coal plant as its power source.

"With the 1968 Act in mind, the Department (of Interior) expects to consider several options going forward, including the feasibility of continued use of NGS-provided power," Petty wrote.

CAP: No big deal

CAP deputy general manager Tom McCann said Monday that his agency has a different view of the law.

"We don’t view this as a big deal," McCann said.

The Hopi Tribe and a coal-miners' union already are suing CAP based on the same legal premise that the canal must use the coal plant for power.

CAP officials nonetheless are scheduled to vote Thursday on two contracts to purchase power for the canal from other sources once NGS closes next year.

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Both of those contracts — one for solar power and one for SRP power from various sources — are more economical than power from the coal plant, McCann said.

The letter from the Interior Department did not threaten legal action against CAP or to otherwise interfere with its power purchases. It simply asked for collaboration between the agencies, which McCann said already exists.

CAP's expenses are passed on to the cities, tribes and farmers in Maricopa, Pinal and Pima counties who rely on Colorado River water supplied by the canal.

But concern over the coal plant's fate is about more than economics.

Copper offering opportunity for coal miners With the impending closure of the Navajo Generating Station coal-fired power plant in December 2019, hundreds of power plant workers and coal miners will need new jobs. Arizona's copper mines could offer them opportunity.

The power plant and coal mine that supplies it are both on reservation land. When operating at full capacity they employ about 750 people, most members of the Navajo and Hopi tribes.

Elected tribal leaders have been working to keep the plant and mine operating, possibly through a new buyer who would take over the power plant.

Trump campaigned on a promise to save coal jobs.

Potential plant buyers

McCann said CAP has been meeting with potential buyers considering taking over the power plant and would like to sell the canal power if they do.

One buyer has been identified as Avenue Capital and its power plant affiliate, Middle River Power.

McCann said at least one other potential buyer has met with CAP.

But SRP said two months ago that time is running out for a buyer to take over the plant without at least a temporary shutdown at the end of 2019 while permits and leases are negotiated.

Trump could act broadly on coal

The Interior Department sent its letter to CAP on the same day a report came out that Trump's Energy Department could use emergency powers to keep troubled coal plants operating.

Bloomberg cited a memo that outlined how the administration could force power grid operators to purchase from struggling coal and nuclear plants.

The Energy Department memo said that coal and nuclear plants are important to the grid in the event of a major power disruption because they keep fuel on site, rather than pipe it in like the natural-gas plants that are replacing them across the country for economic reasons.

"To promote the national defense and maximize domestic energy supplies, federal action is necessary to stop the further premature retirements of fuel-secure generation," the draft memo said.

The news drew rebuke from a variety of observers.

"I eagerly await the administration’s regulations protecting pagers, fax machines, and Blockbuster," former California Gov. Arnold Schwarzenegger wrote on Twitter.

I eagerly await the administration’s regulations protecting pagers, fax machines, and Blockbuster. https://t.co/ykLJHT4OvK — Arnold (@Schwarzenegger) June 1, 2018

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