Navajo Nation Council Approves Lease Agreement to Keep Navajo Generating Station Open Until 2019

Navajo Generating Station near Page, Arizona.

Published June 28, 2017

WINDOW ROCK – With a July 1 deadline looming, the Navajo Nation Council voted on Monday to approve a lease between the Navajo Nation and the Salt River Project (SRP) to keep the Navajo Generating Station open until 2019.

The Navajo Generating Station is a three-unit, 2,250-megawatt, coal-fired power plant located on tribal trust lands leased from the Navajo Nation near Page, Arizona. Coal for NGS comes from the Kayenta Mine located on tribal trust lands leased from the Navajo Nation and Hopi Tribe.

Earlier this year, SRP announced it planned to close the Navajo Generating Station in December 2019 because it can operate with natural gas, which is cheaper than coal. With that closing date, SRP planned to begin decommisioning soon after July 1, 2017. The extension allows the Navajo Generarting Station (NGS) and Keyenta Mine operations to continue without interruption.

Navajo Times | Krista Allen

Council members debated the issue for over eight hours on Monday, before approving the final legislation along with a total of nine amendments.

Legislation sponsor Speaker LoRenzo Bates thanked his Council colleagues and the negotiating team for supporting the jobs of over 800 Navajo workers at NGS and Kayenta Mine and for securing significant revenue for the Nation through 2019. In addition, it allows time to continue pursuing other energy sources including renewable energy and other economic opportunities.

“To this point, it has been a very challenging process in terms of finding some middle ground especially when you consider all of the issues that were brought forth from delegates, grassroots groups, the workers, and many others,” said Speaker Bates. “At the end of the day, this Council voted in support of the legislation and we look forward to finalizing the agreement.”

Speaker Bates has previously explained that lease would be for a term of 35-years to include the operation of the power plant through 2019, the retirement of the power plant site, and long-term environmental monitoring required by federal environmental laws. The 35-year lease would provide up to $110 million in lease payments to the Navajo Nation.

In addition, the agreement identifies certain assets at the NGS site that the Nation would retain to promote economic development projects, including the railroad track and related facilities, a lake pump facility, two electrical distribution lines, and fencing and equipment.

The Nation would also receive $18 million from the owners for the cost savings of not having to decommission the assets, and $39 million in minimum coal royalties for 2018 and 2019 combined. Additionally, the Nation would have the ability to utilize the two transmission lines to sell electricity on the open market to generate additional revenue for the Nation.

Council Delegate Edmund Yazzie was the first Council member to offer comments on the legislation on Monday. He along with several other delegates requested the Council members to approve the legislation to preserve jobs and revenue for the Navajo Nation.

“I am for jobs. I am for revenue that goes back to the Nation. I am going to vote in favor of the legislation because when an individual gets laid off it hits the family, it hits the children – I say this from personal experience,” stated Delegate Yazzie. “If this doesn’t pass, it’s going to hit the families hard and the revenue that comes in.”

Council Delegate Seth Damon recalled Speaker Bates’ statement indicating that the legislation could be the most significant decision that the current Council would have to make during its current four-year term, which would have long-standing impacts for the Navajo Nation in terms of providing revenue to the central government, the Nation’s 110 chapters, and many other programs and direct services.

“It will help the families in the coming years and I ask you to support this legislation,” said Delegate Damon.

Although the majority of the delegates spoke in support of the bill, several were very vocal in their opposition to the waivers contained in the legislation and the agreement, particularly the request for the Nation to waive Navajo laws in any potential litigation.

Council Delegate Leonard Tsosie was very adamant in his opposition to the waivers requested of the Navajo Nation and strongly urged his colleagues to vote down the legislation as a means of protecting the Nation’s sovereignty and to uphold Navajo laws.

“They’ve been on our land for over 50 years – they should know us by now. Do they regard our laws of being from the cave man years or think theirs are superior? They’ve never given me a clear answer,” stated Delegate Tsosie, in regards to the waiver of Navajo laws.

Following the eight-hour debate, the Council with a vote of 18-4 approved Legislation No. 0194-17. Council Delegates Leonard Tsosie, Amber Kanazbah Crotty, Nelson S. BeGaye, and Jonathan Perry issued the four opposing votes. The bill required two-thirds approval, or 16 supporting votes to pass.

The resolution does not require the consideration of the president, however, the president’s signature is required in order to finalize the final lease document.

Please see the attached Council committee reports for a listing of the nine amendments that were approved with the legislation.

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