https://www.miningweekly.com

Biggest coal plant in US west gets another two years to live

28th June 2017

By: Bloomberg

  

Font size: - +

SAN FRANCISCO – The Navajo generating station, the biggest coal-fired power plant in the US West, will live to see another two years.

On Monday, Navajo Nation leaders approved a lease with the plant’s utility owners that will keep the ailing, 2 250 MW complex operating through December 2019. The owners signalled on Tuesday that they’ll sign the deal this week, the Navajo Nation Council said by email.

The agreement was the Navajo Nation’s last hope in keeping the coal plant located on reservation land in the Four Corners area of Arizona running for a little while longer. Without it, the plant’s utility owners led by Salt River Project said they’d cease operation at the start of July and immediately begin decommissioning activities. Under the new lease, Salt River said retirement of the plant will now begin after 2019.

“The owners are very pleased that the Navajo Nation Council approved the replacement lease,” Mike Hummel, deputy general manager of Salt River Project, said in a statement Tuesday. “This agreement provides meaningful benefits for all involved and creates a path forward during this challenging transition.”

The fight to rescue the Navajo coal plant, which is facing fierce competition from generators fuelled by cheap natural gas, is testing President Donald Trump’s resolve to rescue America’s coal industry and bring mining jobs back. Tribal leaders have appealed to the administration for help, and US Interior Secretary Ryan Zinke has said the agency’s looking at all options to save it.

The new lease would preserve more than 800 jobs at the power plant and coal mine that supplies it, said Jared Touchin, a tribal council spokesman. The agreement would also hand the tribe $110-million in lease payments, $39-million in coal purchases and $18-million from savings for not decommissioning certain assets.

The tribe’s leaders have been working with federal and state officials to try to line up a new owner of the facility that could operate the plant beyond 2019, Touchin said. The current owners would like a potential buyer lined up by Oct. 1, he said. A sale faces an uphill battle given the weak economics for coal and the high cost of retrofits and repairs.

To make the plant a more attractive asset, a member of the Arizona Corporation Commission has proposed that the US Interior Department, which has a 24% stake in the plant, commit to covering half of its maintenance costs.

The plant’s operations "can continue while stakeholders examine opportunities for a new operating partner to extend the life of the plant beyond its original 50-year lease,” Zinke said in an emailed statement.

Edited by Bloomberg

Comments

Projects

Image of lithium ore
Bougouni lithium project, Mali – update
Updated 2 hours 42 minutes ago By: Sheila Barradas

Showroom

Rittal
Rittal

Rittal is a world leading provider of top-quality integrated systems for enclosures, power distribution, climate control, IT infrastructure and...

VISIT SHOWROOM 
VEGA Controls SA (Pty) Ltd
VEGA Controls SA (Pty) Ltd

For over 60 years, VEGA has provided industry-leading products for the measurement of level, density, weight and pressure. As the inventor of the...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.117 0.153s - 107pq - 2rq
Subscribe Now