Navajo Nation looks to federal subsidies to keep coal mine, plant open
Navajo Nation officials are seeking federal subsidies to keep the Kayenta coal mine and Navajo Generating Station open, The Arizona Republic reports.
The plan would link the price of coal to the price of natural gas to make the coal plant more competitive, with the government making up any price shortfall.
The plan would also require the Navajo Nation to approve a new lease agreement for the mine, which is owned by Peabody Energy.
The four utilities that own the 2,250-MW Navajo plant near Page, Ariz., in February said they would shut the station by 2019.
The plant, the largest coal-fired facility in the western U.S., is just the one of the latest in a series of generators that are closing because they can’t compete with cheaper natural gas.
Closing the power plant would also mean closing the Kayenta mine that fuels the station, removing the two chief sources of income and tax revenue for the Navajo and Hopi communities near the facilities.
Under the proposal endorsed by Navajo Nation officials, Peabody would lower the price of coal sold to the power plant, using the subsidies to make up the difference. The amount of the subsidy would vary according to the price of natural gas, allowing the plant to compete.
Though decisions about individual plant closures are typically relegated to the states, the proposal could prove a test for President Trump, who has pledged to support the coal industry. Trump recently signed an executive order that, among other things, is designed to remove regulatory barriers to the used of coal for power generation.
The Navajo plant's four utility owners said in February that they will cease operating the plant regardless of any federal support. One owner, Arizona municipal utility Salt River Project, told the Republic last week that it supports the subsidy proposal, but reiterated that it would not continue its ownership stake after 2019.
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