Zinke presses to keep Navajo Generating Station online
- The U.S. Department of the Interior believes it has authority to keep the coal-fired Navajo Generating Station in Arizona from closing, arguing that under a 50 year-old Congressional charter, the federal government owns a quarter of the plant.
- The generator's main customer for its electricity, the Central Arizona Project (CAP), will meet Thursday to discuss options.
- Arizona utility Salt River Project (SRP) and other owners plan to shutter the Navajo plant after its lease expires next year, but the closure could devastate local communities and the Trump Administration has been pressing to save coal-fired generation.
The same day President Trump ordered Department of Energy Secretary Rick Perry to stop the closure of coal and nuclear plants, the Interior Department informed CAP in a letter that it would turn to the 1968 charter to save the plant.
"We hope to work collaboratively with the district and other stakeholders to explore available options consistent with the 1968 act, which may include the submission of a new plan to Congress that reflects currently available and economically viable sources of power," the letter said.
Stakeholders have been rushing to find a solution, including the possibility of a new owner at the plant.
In April, Middle River Power, which manages the power plant investments of Avenue Capital Group, talked with CAP in a meeting arranged by the financial advisory and asset management firm Lazard.
Following that, in a May 2 letter to the Central Arizona Water Conservation District, Middle River Power President Mark Kubow indicated a deal was possible. "As a result of the significant diligence conducted to date, including several visits to the plant, active engagement of the plant management team, and our experience and understanding of western markets, we are confident in our ability to create a lower-cost operating paradigm that repositions [the Navajo Generating System] in the current market environment," he wrote.
The Trump Administration has made it a priority to find a way to keep coal and nuclear plants online — despite the pressure they face in competitive markets where cheap natural gas has made the plants unprofitable
A memo, made public last week, shows President Trump is planning to bail out coal and nuclear plants at risk of closure under the authority of two seldom-used federal laws: Section 202 of the Federal Power Act and the Cold War-era Defense Production Act. The administration's plan to support struggling coal and nuclear generators would be an unprecedented federal intervention in wholesale power markets, industry analysts say.
In February 2017, SRP and other plant owners voted to close the plant by the beginning of 2019, to take advantage of lower wholesale power prices. Later that year, however, the plant won a reprieve after the Navajo Nation, which owns the land on which the plant sits, negotiated a new lease.
- Washington Examiner Ryan Zinke ups pressure on Arizona board to save giant coal plant
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