Coal's Days in Navajo Country Are Numbered
Before the arrival of the U.S. Army in the mid-1800s, four mountains marked the boundary of the Navajo’s ancestral homeland. Today, the tribe could draw a line around its reservation with coal.
Four coal-fired power plants and three coal mines ring the Navajo Nation, a testament to the black rock’s complicated legacy on a sprawling reservation that occupies large swaths of high desert in Arizona, New Mexico and Utah.
But coal’s days in Navajo country are increasingly numbered.
Two of the four plants are scheduled to close by 2025. The fate of the third rests upon a longshot bid to keep it open beyond 2022. And the fourth faces growing uncertainty, as one of its owners plans to divest from the plant in 2031.
The wave of retirements represents a watershed moment for the Navajo and a test case for America’s wider transition away from coal. Tribal leaders are increasingly looking to wind and solar to fill the gap left by the fossil fuel. Navajo renewable developers talk of a second chance to reap the riches of the energy industry.
Yet serious questions loom. Tribal officials are projecting up to $35 million in budget cuts in 2021, the result of closing a massive plant and coal mine later this year. It’s unclear just how many jobs that wind and solar can create to replace the more than a thousand tribal jobs in the coal industry.
“You have to really look at the past. For almost the last hundred years, the nation—which I mean the Navajo Nation—has been one of the leading forms of energy, not only in the Southwest, but west of the Mississippi," said Seth Damon, speaker of the Navajo Nation Council, in an interview. “I think that’s something that we can’t really walk away from immediately."
Coal has long been something of a paradox for the Navajo.
On the one hand, the industry has provided high-paying jobs and tax revenue on a reservation in desperate need of both. But there is also a pervasive feeling among tribal members, including strong supporters of coal, that the Navajo bore the environmental costs while others enjoyed the benefits of the coal industry (Climatewire, April 3, 2017).
Coal mined and burned on and near the Navajo reservation has helped power the growth of Phoenix, Los Angeles and Las Vegas—but some 15,000 tribal members remain without electricity today.
Like many coal communities across America, the Navajo are now being forced to reckon with a future without the fossil fuel. The Cholla Power Plant in Joseph City, Ariz., just south of the Navajo Nation, is scheduled to close in 2025.
In New Mexico, along the Navajo’s eastern border, two plants and two mines face a tenuous future. Public Service Co. of New Mexico, the majority owner of the San Juan Generating Station, has said it plans to exit that facility in 2022 and the nearby Four Corners Power Plant, where it owns a smaller stake, in 2031 (Energywire, Jan. 31).
The city of Farmington, N.M., which is not on the reservation, owns a small share of San Juan and is pursuing a plan with a New York hedge fund to keep it open beyond 2022 (Climatewire, Feb. 28). Navajo make up roughly half the workforce at San Juan and a nearby mine that serves it. At Four Corners, where coal is supplied by a tribal mining company, Native Americans comprise 80 percent of the plant and mine’s workforce.
And then there is the Navajo Generating Station, the second-largest coal plant west of the Mississippi River. NGS, as the northern Arizona power station is commonly known, will close in December. So, too, will the coal mine on Navajo and Hopi lands that has long served it.
The NGS closure represents a massive economic blow to the tribes. As recently as 2016, the plant and mine employed a combined 800 people, the vast majority of them Navajo and Hopi, and generated $150 million in annual taxes and wages.
Yet planning for life after their retirement has only just begun in earnest.
The Salt River Project, NGS’s operator, and three other utilities with a stake in the facility voted to close the hulking power station in 2017 for economic reasons (Climatewire, Feb. 14, 2017). The decision prompted a furious lobbying campaign from coal interests and the Trump administration to find a new buyer willing to operate NGS beyond 2019 (Climatewire, June 9, 2017).
The debate consumed federal, state and tribal officials for much of the last two years. NGS’s fate was sealed only last month, when Navajo lawmakers declined to back a bid by a tribal energy company to acquire the coal plant.
“There is a difference between closure and transition. I think SRP has done a good job on closure, but we haven’t even talked about transition,” said Amanda Ormond, a consultant and former director of the Arizona Energy Office. “This will be a cautionary tale of how not to close a coal plant. There hasn’t been the time. There hasn’t been sufficient focus on the nation of what can come next. There are a variety of factors that could lead to not an ideal closure. We have to have a statewide dialogue.”
‘One opportunity’
The potential for wind and solar development on the Navajo Nation is considerable.
The reservations boasts cheap and open land, ample sunshine, strong winds and proximity to a transmission system designed to serve the coal plants that dot the region. A 2018 study by the National Renewable Energy Laboratory found no Native American tribe boasts more renewable potential.
Last week, Navajo President Jonathan Nez issued a clean energy proclamation declaring renewable development a priority to the tribe’s economic future. The proclamation envisions creating a tribal renewable industry that can spur wider economic development.
Nez’s office did not respond to repeated requests for comment.
Damon, the Navajo council speaker, likened the tribe’s shift to the wider transition in America, where coal has lost market share to natural gas and renewables.
“Solar can do so much, not only for the nation, but transmitting that power to send it off the nation,” he said.
Yet tribal officials and energy analysts say more planning is needed to fully harness the power of the wind and sun. Finding suitable sites that do not conflict with grazing leases can be a challenge. There are questions about how much tax revenue the renewable projects will generate and how to use their proceeds. Transmission will be key to unlocking renewable development on tribal land.
The Navajo Nation has the right to 500 megawatts of transmission capacity at NGS, under the terms of the plant’s closure agreement. How the tribe plans to use those rights is not yet clear. It could sell the rights to other power suppliers or use them to foster renewable development on the reservation.
The dynamic underscores the potential opportunities and risk for the Navajo, Ormond said.
The retirement of coal plants in the region creates an opportunity for renewable developers to access existing transmission capacity across the Southwest. But so far, there is no plan for how to direct development or specific commitments by utilities to prioritize tribal projects, Ormond said.
“That transmission will eventually get absorbed by somebody, and there could be no benefit to the tribe whatsoever,” she said. “This is the one opportunity. If that transmission gets used up in other ways, there will never be transmission built off the nation.”
Federal government’s role
Rep. Tom O’Halleran, an Arizona Democrat who represents much of the reservation in Congress, said the federal government has an obligation to help the tribe navigate the transition.
NGS was built as part of a federal effort to bring water to Phoenix and Tucson, Ariz. Power from the plant was used to pump water up and out of the Colorado River and across the desert. The federal government still owns a stake in NGS through the Interior Department.
“There is a role for the federal government to play here just like they play in major shutdowns of military bases across the country,” O’Halleran said.
Renewable development remains in its infancy on the Navajo Nation. SRP and the Navajo Tribal Utility Authority have completed one 27-megawatt solar project and are working on a second.
Scott Harelson, an SRP spokesman, noted the power company has already issued a request for proposals for 685 MW of new electricity generation and committed to 1,000 MW of new solar by 2025. He said the company is in talks with the Navajo about the potential for more development on tribal lands.
Navajo Power, a solar developer that counts a team of Navajo among its leadership, has even larger plans. The company’s website boasts its ambition to build 10 gigawatts of solar capacity on tribal land.
“The idea was let’s start with solar projects in the shadows of these coal facilities because you already have the asset infrastructure we would need,” said Brett Isaac, a member of the Navajo Nation who helped found the company.
‘Future of our nation’
Even solar enthusiasts like Isaac concede renewables will have difficulty replacing jobs lost by coal. While there are construction jobs generated during project development, there are far fewer jobs once panels start producing electricity.
But while coal has provided the tribe a boost, it has hardly solved its economic problems, Isaac said. Pervasive unemployment still grips the Navajo Nation.
Isaac’s hope: Renewables could spur further economic development. Navajo Power, for instance, is structured as a public benefit corporation. Revenues generated by its utility-scale projects could be spent on electrification projects or the creation of community development corporations.
“If we’re going to get renewable energy done in a way that isn’t reminiscent of what other energies have done to Navajo and other indigenous communities, we had to integrate a philosophy into the development process that would be fair and in tune with how development should occur on tribal land,” he said.
A potential road map for doing just that may be emerging in New Mexico. State lawmakers passed a bill this year to boost renewable energy generation to 50 percent of the state’s electricity supply by 2030, and to completely eliminate carbon-emitting power generation by 2050 (Climatewire, March 13).
The law also contains provisions that could help ease the transition of Navajo communities reliant on coal in northwest New Mexico. They include a state pledge to back power companies’ outstanding debts on coal plants, lowering their financing costs. Savings on their debt payments will be used to help fund transitional assistance.
There’s also this: Power companies will be required to build renewables in counties facing coal plant closures to help rebuild their tax base.
Navajo officials praised the New Mexico plan. In a statement, Nez, the Navajo president, called it “a milestone for not just the state of New Mexico and the Southwest, but all of the U.S., including tribal communities.”
“This is a gift for our children and children of New Mexico who are yet to be born,” he continued. “Clean energy is the future of our nation.”
Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news at www.eenews.net.