Is Power from the Navajo Generating Station too Costly for CAP?

by Patrick O'Malley

Central Arizona Project (CAP) provides Maricopa, Pinal, and Pima counties with 1.5 million acre feet of water every year. Navajo Generating Station (NGS) is the major source of electrical power to CAP, and electricity is CAP’s biggest operating expense. NGS continues to be one of the biggest problems facing CAP.

The EPA Wants $1.1 Billion in Pollution Controls

The Environmental Protection Agency (EPA) wants NGS to add additional pollution controls with a price tag of $1.1 billion. A letter of understanding by the Directors of the EPA, the Department of the Interior, and the Department of Energy in January gave NGS more time to study the issue, but it’s not likely to change the answer.  All three of those Directors at the EPA have since resigned, so it’s not up to them anymore.

Recently Rep. Matt Salmon sent a letter to the EPA asking them to take into account the economic impact on Arizona of additional pollution controls at NGS for negligible air quality improvement.   The EPA has been known to take economic issues into account in the past. But will they do it for a coal fired power plant?

Navajo Tribal Council Wants 15 Times More in Lease Payments

Plus, there’s a new problem for NGS.   The Navajo Generating Station is located on Navajo Nation land, and the coal it burns comes from a mine on Navajo land.  Both the lease and the coal mining agreement are up for renegotiation.

The coal mining agreement isn’t far enough along for public discussion, but the lease proposal has been made public.   The lease payments have been $600,000 a year. The new proposal, passed by the Navajo Tribal Council, is $9 million per year.  There are other payments to the tribe as well, like a signing bonus.

CAP staff continues to believe that even with all these problems, electricity from NGS is still cheaper than developing a new source. CAP Board members have not questioned that position publically until now. At this point there are calls from Board members to set up a committee of Board members and staff to review finding other power sources and getting away from NGS entirely.

CAP can’t step away from NGS like trading in a used car, but they are the biggest customer for NGS power.  If CAP isn’t happy then owners of the Navajo Generating Station won’t be happy either. The owners are SRP, APS, Nevada Energy, Los Angeles Department of Water and Power, and Tucson Electric Power. The Bureau of Reclamation is also an owner, except that for reasons that only make sense to lawyers, they aren’t.

Nevada and Los Angeles wanted out of NGS before the Navajo Nation lease proposal. The exhorbitant increase in the cost of the lease isn’t going to bring them back.

ACTION:

Please encourage the CAP Board members to take a serious look at other power sources and other ways of buying power. CAP has to have power to keep delivering water, but the known issues with NGS make it a liability. And what will NGS’s next issue be?

Board Member

email

Phone

County

Lisa Atkins

LAAtkins@gmail.com

602-229-8605

Maricopa

Gayle Burns

gburnsaz@cox.net

623-869-2333

Maricopa

Guy Carpenter

guy@arizonawaterguy.com

623-869-2333

Maricopa

Frank Fairbanks

frank.fairbanks@cox.net

623-869-2333

Maricopa

Terry Goddard

terry@terrygoddard.com

623-869-2333

Maricopa

Jim Hartdegen

hartdegen@cgaz.com

623-869-2333

Pinal

Jim Holway, PH.D.

HolwayforCAWCD@gmail.com

623-869-2333

Maricopa

L.M. Pat Jacobs IV

pjacobs@cap-az.com

623-869-2333

Pima

Mark Lewis

mark@WaterResources.org

623-869-2333

Maricopa

Heather Macre

HeatherMacre4CAWCD@gmail.com

623-869-2333

Maricopa

Sharon B. Megdal, PH.D.

smegdal@cap-az.com

623-869-2333

Pima

Cynthia Moulton

cyterleegrace@yahoo.com

623-869-2333

Maricopa

Pamela Pickard

ppickard@cap-az.com

623-869-2333

Maricopa

Warren Tenney

azwaterguy@gmail.com

623-869-2333

Pima

Carol Zimmerman

carol@zimmermancom.com

623-869-2333

Pima