NGS rejects Navajo Council offer

WINDOW ROCK – Salt River Project, on behalf of Navajo Generating Station owners, rejected the Navajo Nation Council’s offer to extend NGS’s lease for 25 years on April 30.

SRP Associate General Manager & Chief Power System Executive Michael Hummel notified President Ben Shelly and Speaker Johnny Naize in a three-page letter that the Council’s April 29 offer was “unacceptable.”

On April 29, after about six hours of debate and several amendments to the lease extension, the Council approved an amended lease extension with a vote of 20 in favor and 1 opposed.

Shelly signed off on the Council’s amended lease extension on April 30 and it was submitted to SRP.

Hummel reiterated to Shelly and Naize that prior correspondence by SRP to Shelly and Naize “clearly indicated” to the Council that their modifications and legislative conditions were “unacceptable.”

He noted, “If the Council insists on the proposed changes, it is unlikely we will reach a resolution.

“The NGS owners believe that timing is critical, and determining if there is a solution agreeable to both parties should happen in an expeditious manner,” Hummel added. “I am very concerned that if we do not reach resolution of these issues very soon, the future of Navajo Generating Station is in jeopardy.”

And he stated proposed federal environmental requirements, a fuel contract and owner involvement are also dependent on “confidence in a resolution to the lease extension.”

Hummel’s reference to environmental requirements involves the Environmental Protection Agency’s announcement in January that they were giving NGS owners five more years or until 2023, to install new nitrogen oxide emission controls that NGS owners claim would cost $1 billion.

The EPA reported that nitrogen oxide reacts with other chemicals in the air to form ozone and fine particulates, which are both linked to asthma, bronchitis, emphysema, and even premature death.

The environmental agency stated in a March press release that its proposals for NGS to reduce its NOx emission is to also improve visibility, as required by the Clean Air Act, at 11 national parks and wilderness areas in the Southwest.

NGS representatives informed the Council that before they invest $1 billion into the federal pollution technology, which is called selective catalytic reduction, they need to have the lease extension in place.

The representatives also reported that the lease extension, which would end in 2044, is also needed before Peabody coal company agrees to a coal supply contract with NGS.

Peabody’s Kayenta Coal Mine, which is on the Navajo Reservation, is the sole source of coal for NGS.

The owners of NGS are the U.S. Bureau of Reclamation, SRP, Los Angeles Department of Water and Power, Arizona Public Service, Nevada Power Company and Tucson Electric Power.

NGS provides electricity to Arizona, Nevada and California. But in March, LA Water and Power washed its hands of NGS to move from energy generated by fossil fuels to power produced by renewables.

As SRP was negotiating the purchase of LAWP’s 21 percent share in NGS, Nevada Power announced plans to shut down its two coal-fired generating stations by 2025 and sell its 11 percent share in NGS to SRP as part of proposed state policies to wean Nevada off fossil fuel energy and move into renewable energy and natural gas.

NGS also powers Central Arizona Project’s 14 pumping stations, which pumps water from Colorado River at Lake Havasu to southern Arizona.

For the Council and NGS owners, water has been and continues to be a strategic battle in the lease extension.

Hummel reminded Shelly and Naize in his Tuesday letter that when the NGS owners met with the Council in Flagstaff on April 22, they told the Council that they would not agree to an amended lease extension that included a provision that the owners may not interfere with or oppose a Navajo Nation claim to water from the Upper Colorado River Basin.

He pointed out that that condition was among the reasons that NGS rejected the Council’s amended lease extension.

Hummel stated that the water rights condition “unreasonably limits our ability to address a future potential Navajo Nation claim that is currently undefined and unquantified.

“Such a future claim could have a direct impact on the NGS owners and their customers,” he stated. “There, we will not waive the ability to oppose an undefined and unquantified potential future claim.”

Council Delegate Russell Begaye of Shiprock sponsored the water rights amendment, which the Council unanimously supported.

During the Council debate over the lease extension, Begaye’s water rights amendment was viewed as one of the major Council amendments.

NGS’s use of 34,100 acre feet of water from the Colorado River to power its steam boilers and cooling systems was also among key concerns of Navajo Reservation based grassroots groups and organizations.

The 34,100 afw is from the 50,000 afw from the Colorado River that Arizona has claimed.

The use of water by NGS and Peabody Coal Company, which gets pristine water from the Navajo Aquifer, killed a proposed Navajo Hopi Little Colorado River Water Settlement touted by US Sens. John McCain and Jon Kyl, both representing Arizona, after reservation grassroots entities uncovered a provision in the proposed water settlement that would have had the tribe waive any and all of its future water rights claims to the 50,000 afw.

Grassroots groups also exposed another provision in the proposed water settlement that would have approved lease extensions for NGS and Peabody’s Kayenta Mine.

Begaye said on Wednesday that as he read Hummel’s letter he thought about how African Americans were legally forced to sit in the back of buses.

“The Navajo Nation is in the same predicament,” he said. “I believe the Navajo people are being made to sit in the back of the bus regarding our water rights and minerals. It’s time for our leaders to rise up like the African Americans, walk to the front of bus and take our place among others.”

Begaye said that the bullying by corporations over the past years was accepted as normal.

“It’s time for us to stop bowing down to these huge corporations and industries and allowing cities like Phoenix and Tucson to enjoy economic development and healthy lifestyles from cheap electricity and water that Navajo resources provide while we sit in the back of bus with left-overs,” he emphasized.

Begaye added, “I just don’t understand how anyone, who enjoys indoor plumbing and access to water for personal enjoyment and business development, would oppose the Navajo people’s attempt to access water for the same benefits.”

At print time on May 2, Shelly and Naize had not responded to requests by the Gallup Post for an interview or statements on the decision by NGS owners to reject the Council’s amended lease extension for NGS.

Published in Gallup Post on May 2, 2013. Gallup Post now available at Basha’s in Window Rock and Conoco gas station in Tse Bonito, N.M.