Navajo Generating Station Lease Extension Hits Political Snag

The lease extension for the Navajo Generating Station has hit a political snag, following a ruling by the Navajo Nation Council.

The lease extension for the Navajo Generating Station has hit a political snag, following a ruling in the Navajo Nation Council that they were illegally excluded from negotiations.

The renewed lease would extend the original 1969 lease for the 2,250-megawatt, coal-fired power plant near Page, Arizona, and allow it to continue operating on the reservation from 2019 through 2044. It would significantly increase lease payments for the Navajo Nation – from just over $608,000 a year to $42 million, and maintain royalty payments that make up 60 percent of the operating budget for the neighboring Hopi Tribe. It would also assure NGS’s continued access to 28,000 acre-feet of water a year from Lake Powell.

Navajo Nation President Ben Shelly announced his approval of the lease extension on February 16, and Speaker Johnny Naize introduced it to the Council as Legislation No. 0042-13 on February 20. It was set for hearings in Council following a public comment period that lasted just a few days. But once in Council, the extension came to a grinding halt.

On March 1, the Council announced that the legislation had been ruled “out of order” in a meeting of the Naabik’íyátí Committee, which includes all of the Council delegates but functions as an intermediate step before full-Council actions.

According to the press release, Pro Tem Chair Elmer Begay ruled the legislation “out of order” following two hours of debate on the grounds that the negotiating task force appointed by Navajo Nation President Ben Shelly was not formulated in accordance to Title 18 of Navajo Nation Code.

Title 18 provisions guide the selection of the negotiating team members who are charged with negotiating Navajo minerals leases or other energy agreements. The legislators say specific attention was placed on §105 of Title 18, which provides that two members of the 10-member negotiation team be selected from the Council’s Resources and Economic Development Committee. In addition, they say, the Government Services Committee, now called the Naabik’íyátí Committee, was supposed to have approved the negotiating team.

Erny Zah, Spokesman for Navajo Nation President Ben Shelly, contended this week that Title 18 was written when the Navajo Nation established a three-party government in 1989.

“This law hasn’t been used or pointed at since we’ve been a three-branch government,” he said. It’s one of those obscure laws that exists but hasn’t been in practice.”

Zah is also authorized to speak for Navajo Nation Attorney General Harrison Tosie, who is researching an opinion this week on the “out of order” ruling, including whether Title 18 even applies to a lease extension; it may be limited to new leases.

As for the NGS extension, Zah said, “The President has indicated that politics don’t need to be a part of these negotiations, that the experts within their fields should handle these negotiations.” An eight-member team worked on the NGS lease renewal, he said. They included Tsosie, Navajo Nation EPA Director Stephen Etsitty, Energy Advisor Sam Woods, and representatives from the tribe’s Water and Minerals departments.

Shelly believed that inviting politicians would have gummed the works: “The negotiating team was already talking about how hard it was in the beginning because of historical animosity” stemming from low initial payments for the coal, Zah said.

Council Delegate Dwight Witherspoon, who represents Black Mesa, Forest Lake, Hardrock, Pinon and Whippoorwill, noted during the hearing that he had brought Title 18 to the attention of President Shelly at least two times before.

“There was no Council that participated in the negotiating team; that’s a flaw in the negotiations,” Witherspoon said. “We didn’t have an opportunity to provide input into the negotiations.”

Other Council members expressed a hesitancy to be rushed to action on a lease renewal.

“We have to make sure we turn every stone, make sure we’re all satisfied,” said Delegate Katherine Benally, representing the Chilchinbeto, Dennehotso and Kayenta chapters. “We may not get everything we’re asking for, we recognize that, but let’s get it done right.”

Referring to the original lease agreement approved by past leadership in 1969, Benally added, “They had a good reason that they didn’t have the upper hand; they weren’t educated. Twenty-five years from now, 50 years from now, when our children and great-grandchildren are looking at this, what excuse are we going to have?”

The entity with the most time pressure is the Salt River Project, the primary owners of NGS. Officials there have said the lease renewal is one leg of a three-legged stool that must remain standing to ensure the plant’s future. The others include the outcome of strict new EPA emissions control standards that have been proposed as part of an effort to control regional haze, and the future of the coal supply from the Kayenta Mine.

Scott Harelson, spokesman for the Phoenix-based Salt River Project, said the wrangling in the Council isn’t causing too much worry at this stage.

“It’s part of the Navajo Council process,” he said. “We’re hopeful that they will be able to work through this, to determine what impact Title 18 does or doesn’t have. I don’t think it’s caused us any undue concern. It’s a political process, and sometimes you run into snags, and that appears to be what’s happening now. The lease extension is really in the hands of the Nation right now. We need to respect that and see how it plays out.”

Not every delegate is against a speedy approval of the extension. Delegate Duane Tsinigine represents the Bodaway/Gap, Coppermine, K’ai’Bii’To, LeChee and Tonalea/Red Lake chapters, where many residents are employed at NGS. He made it clear he supported the legislation as it directly impacted a large portion of his constituency.

“I would like to proceed because it’s the Navajo Nation economy… LeChee, Coppermine, K’ai’Bii’To, Bodaway/Gap’s economy,” he said. “It’s their workforce, it’s their livelihood.”

It now falls to the Naabik’íyátí Committee, Shelly, and Tsosie to resolve uncertainties concerning Title 18 and the NGS negotiations.

Meanwhile, Zah is concerned that the resurrection of Title 18 could affect mineral and rights-of-way agreements dating back more than 20 years.

“If we go according to that law, there are a good number of leases that will come under scrutiny because they didn’t follow that law,” he said. “People within our Natural Resources Division handle a lot of these smaller rights-of-way and mineral negotiations. If you want to stick with the law, a council member should have been there. And since they weren’t, what becomes of it? Is it null and void, even if the lease was passed in 1990?”