Navajo Generating Station buyers lose interest

Upon Middle River Power Announcement, Navajo Community Calls to Redouble Efforts to Transition to Renewable Energy

As Middle River Power backs away from efforts to purchase Navajo Generating Station, local Navajo community leaders issued the following statement reacting to the news:

“Based on economics alone, this plant was never going to make it past 2019. The time and money spent over the last year to find someone to buy the costly coal plant distracted from a clean energy transition that our people desperately need,” said Nadine Narindrankura of Tó Nizhóni Ání. “Navajo leadership needs to seize this moment. The opportunity has presented itself once more to prepare for a successful transition away from coal. The future is in renewables, not in a dead coal market. There is much to be done — the Navajo Nation should focus its efforts on building the 500MW of renewable energy using the transmission lines negotiated on the current lease agreement on NGS.”

“Now that Middle River Power has withdrawn its intention to purchase the Navajo Generating Station, all attention should now be directed toward developing new economic opportunities that will support the plant workers, the mine workers, and the Tribes that had grown overly dependent on coal revenue,” said Percy Deal, local Navajo Nation resident. “The Navajo and Hopi lands are ideal for new solar power development, and building new clean energy infrastructure can support new jobs and revenue opportunities. Local families have never taken our eyes off of what we have been praying for — for our livelihoods to be on a path to recovery after all this is said and done.”

“The clock is ticking to go full charge ahead on diversifying the Navajo Nation’s economy, investing in renewable energy, and creating sustainable economic development,” said Carol Davis of Diné CARE. “We also need to have a plan for the reclamation and the remediation of our land after decades of pollution, and we need 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.”

Contact: Nicole Horseherder, (928) 675-1851, or nhorseherder@gmail.com; Carol Davis, (928) 679-5045, or caroljdavis.2004@gmail.com; Percy Deal, (928) 205-7332, or deal.percy@gmail.com

PRESS RELEASE – Middle River Power Ends Pursuit of NGS Ownership

New York investment company Avenue Capital Group and Illinois-based Middle River Power (MRP), announced today, Sept. 20, 2018,  that they are no longer seeking to purchase the Navajo Generating Station (NGS) near Page, Ariz., and operate the plant after the current owners stop their operation the coal-fired plant on Dec. 22, 2019.

In February 2017, the current utility owners of the nearly 50-year old plant made the difficult decision to end their participation in NGS when the current term of their lease with the Navajo Nation ends in 2019 after it became clear that current and forecasted natural gas prices had made coal-fired generation at NGS uneconomical.

Shortly after this decision, the U.S. Department of the Interior, along with other stakeholders, launched an effort to keep the plant open while Peabody Coal retained a consultant, Lazard, to identify potential new owners.

Salt River Project (SRP), as operator of NGS, worked closely with all interested parties and immediately created a virtual data room that provided all information about the plant from operation budgets and maintenance activities to personnel and administrative costs. Initially, 16 entities expressed interest and signed non-disclosure agreements.

To help provide visibility and information about NGS, SRP hosted numerous tours of the plant over the past 18 months for prospective buyers, elected officials, regulators and representatives of the Navajo Nation and Hopi Tribe as well as federal government officials.

Tours were conducted for MRP representatives in March and April and they were invited to attend a meeting of the Navajo Project Coordinating Committee where they were provided information about the owners’ understanding of federal environmental requirements, the Navajo Nation approval process and other major tasks that would need to be accomplished for a successful transition.

Additional meetings with MRP, the Navajo Nation and others were subsequently held in Flagstaff in an effort to move the process along, identify needed agreements and set milestones.

“We appreciate the time and effort made by MRP officials as they considered the possibility of purchasing NGS,” said SRP General Manager and CEO Mike Hummel. “We understand their decision to end our discussions and will continue to focus on our dedicated employees and their efforts to finish strong in our final year of operations of the plant. We will continue to work with and communicate with the Navajo Nation and the Hopi Tribe related to NGS operations.”

Regular employees of NGS are now being redeployed to other facilities as SRP carries out its commitment to offer employment within SRP to those who desire. SRP anticipates that by December 2019, only a small number of permanent employees will remain at NGS, and that it will be operating NGS primarily with temporary contract employees at that time.

SRP continues to conduct activities in a safe manner for its employees and make capital investments necessary to complete decommissioning of the plant within the current agreed upon timelines with the Navajo Nation.

The utility owners of NGS include SRP, Arizona Public Service Co., Tucson Electric Power Co., NV Energy and the United States.

PRESS RELEASE – NAVAJO NATION TO PURSUE MORE VIABLE OPTIONS FOR NGS

WINDOW ROCK – On Thursday, Sept. 20, 2018, President Russell Begaye announced that the Navajo Nation would move beyond negotiations with Avenue Capital and Middle River Power over the ownership and operation of the Navajo Generating Station, and pursue other opportunities.

“The Navajo Generating Station is a highly rated power plant that has the potential for many more years of operation,” President Begaye said. “The plant has been maintained at a very high level and meets industry standards for emission. Coal is one of the most dependable sources of power and because of which, NGS is an attractive power plant for companies that want to expand their power sources to be supplied to the entire southwest.”

He added that the Nation looks forward to working with companies that are expressing interest.

“I appreciate the support of the federal government to help maintain NGS,” President Begaye said. “NGS has a big impact, not only to the Navajo Nation and Hopi Tribe but also to schools, social programs and services provided to cities like Page and counties across the Four Corners.”

Speaker LoRenzo Bates is in agreement with the new approach and they look forward to meeting and considering new options.

“The Navajo Nation is poised to pursue other viable options to allow for the continuation of the Navajo Generating Station beyond 2019,” said Speaker Bates.

The current two-year agreement allows for NGS to operate until the end of 2019.

“Today, there are many new technologies that are becoming more and more feasible options, and there is no shortage of interest in NGS by such developers,” Speaker Bates added. “We’ve had many potential buyers and developers approach the Nation.”

PRESS RELEASE – Navajo Nation to pursue more viable options for NGS

WINDOW ROCK – On Thursday, Sept. 20, 2018, Speaker LoRenzo Bates (Nenahnezad, Newcomb, San Juan, Tiis Tsoh Sikaad, Tse’Daa’Kaan, Upper Fruitland) announced that the Navajo Nation would move beyond negotiations with Avenue Capital and Middle River Power over the ownership and operation of the Navajo Generating Station, and pursue other opportunities.

“The Navajo Nation is poised to pursue other viable options to allow for the continuation of the Navajo Generating Station beyond 2019,” said Speaker Bates.

The current two-year agreement allows for NGS to operate until the end of 2019.

“Today, there are many new technologies that are becoming more and more feasible options, and there is no shortage of interest in NGS by such developers,” Speaker Bates added. “We’ve had many potential buyers and developers approach the Nation.”

He also noted that President Russell Begaye is in agreement with the new approach and they look forward to meeting and considering new options.

“The Navajo Generating Station is a highly rated power plant that has the potential for many more years of operation. The plant has been maintained at a very high level and meets industry standards for emission. Coal is one of the most dependable sources of power and because of which, NGS is an attractive power plant for companies that want to expand their power sources to be supplied to the entire southwest,” said President Begaye.

He added that the Nation looks forward to working with companies that are expressing interest.

“I appreciate the support of the federal government to help maintain NGS. NGS has a big impact, not only to the Navajo Nation and Hopi Tribe, but also to schools, social programs and services provided to cities like Page and counties across the Four Corners,” President Begaye stated.

PRESS STATEMENT FROM PEABODY via Charlene Murdock
Director, Corporate Communications, Peabody, Peabody Plaza | 701 Market St. | St. Louis, MO 63101-1826, Office Phone: (314) 342-7526, cmurdock@peabodyenergy.com

Peabody today, Sept. 20, 2018, called on multiple stakeholder groups and, particularly, the U.S. government, to take all necessary steps to ensure ongoing operation of the Navajo Generating Station and Kayenta Mine beyond 2019.

“The future of NGS and Kayenta remains at risk, despite the generating station running at high levels, a consistent call by tribes to preserve 850 needed jobs, third-party reports that validate the plant’s competitiveness, and a U.S. government with a significant ownership in the plant and a duty to provide power and protect the tribes,” said Peabody President – Americas Kemal Williamson. “We urge the U.S. government to help lead efforts to ensure ongoing operation of the plant and mine for the benefit of the tribes and the people of Arizona. Peabody and others continue to aggressively work toward that goal.”

The company noted that the passage of time narrows the path toward ongoing operations. For over a year now, an unprecedented group of stakeholders including the Navajo Nation, Hopi Tribe, union members, state and federal government officials, regulators, business groups and others have come together to keep the Navajo Generating Station and Kayenta Mine open beyond 2019.

During that same time, the power plant has run at high capacity utilization levels, demonstrating the importance of the plant in supplying reliable, low-cost baseload power.

With the current reluctant lead owner and operator of the plant threatening closure of the plant by the end of 2019, though, the urgency to advance viable alternatives continues to grow.

The federal government owns 24 percent of the plant and oversees the group charged with reliability of water in Arizona.

Leave a Reply

Your email address will not be published.