Despite protests from Navajo miners, Central Arizona Project approves power deal

The board of directors overseeing the Central Arizona Project canal on Thursday approved two deals for power to partially replace what they expect to lose next year when the embattled Navajo coal plant near Page closes.

Coal miners from the Kayenta Mine protested at the state Capitol on Wednesday and attended the board meeting of the Central Arizona Water Conservation District, asking the board to put the vote on hold for three months.

They said time was needed for Chicago-based Middle River Power to put together a proposal to buy the Navajo Generating Station and prevent its closure.

The board did not listen. The vote was unanimous except for one member, Mark Lewis, who abstained because of a conflict of interest.

Lewis is on both the CACWD board and the council of Salt River Project, the electric company that runs the plant and decided last year it was no longer economical.

Deal will mean new solar plant

One of the power deals approved Thursday will result in the construction of a 30-megawatt solar plant somewhere along the canal, which will sell power to CAP for just 2.5 cents per kilowatt-hour, one of the cheapest contracts of its kind.

The other agreement is a five-year deal for power from SRP from a variety of sources.

Combined, the contracts only cover about 14 percent of CAP's power needs, and officials said if Middle River or another entity can successfully take over the coal plant, they'll consider taking its power — if it's offered at a reasonable price.

CAP officials said they were concerned for the Navajo and Hopi communities that would be affected by the coal plant's closure, but that ultimately the decision was not theirs.

"I want to be clear, CAP did not have a vote on closing NGS," CACWD President Lisa Atkins said Thursday. "CAP does not own NGS. CAP is not required by law to buy NGS power. ... CAP seeks a long-term, cost-effective, reliable and diverse power portfolio for the benefit of its water users."

Middle River Power optimistic, but not specific

Joe Greco, senior vice president of Middle River Power, addressed the board Thursday. He did not disclose a possible price for the plant or provide other specifics. He said his company could operate the plant efficiently and economically for customers.

The future of the plant on the sprawling Navajo reservation in northern Arizona remained unclear after the announcement by Middle River Power, a portfolio company of Avenue Capital responsible for managing its power plant investments.

But the hundreds of members of the Navajo Nation and Hopi Tribe who work at the plant and the mine that supplies its coal have been heartened that their livelihoods could be saved by the only potential buyer to emerge since the utilities that own the plant announced they would close it.

The water conservation district uses power from the generating plant to operate an aqueduct system that moves Colorado River Water to cities, farmers and tribes in central and southern Arizona.

Greco characterized his company's intentions as serious and said it was looking at options "to keep the NGS operating well into the future."

Hopi chairman: 'Slow this process down'

"Let's slow this process down, answer questions and give the prospective owner a chance," said Timothy Nuvangyaoma, the Hopi Tribe chairman. He said that because the tribe gets about 85 percent of its operating budget revenues from the power plant and coal mine, closing them would result in "economic catastrophe."

Board members denied Greco's request to delay approval of agreements to buy power from several firms for some of the energy necessary to move Arizona's water, saying it needed to move ahead and noting the aqueduct has relied on multiple power sources in the past.

The utilities that own the Navajo Generating Station decided last year to shutter it when its lease expires in late 2019. While supporters of the plant insist it can produce economically priced energy, utility operators say the station is more expensive to run than natural gas-burning plants.

The Associated Press contributed to this report.

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