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Navajo Nation Council Tables Navajo Generating Station Lease

The Navajo Nation Council has tabled a decision on a lease renewal with the Navajo Generating Station, the coal-fired power plant on tribal land.
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The Navajo Nation Council has tabled a decision on a lease renewal with the Navajo Generating Station, the controversial, coal-fired power plant on tribal land near Page, Arizona. Navajo Nation President Ben Shelly’s office is claiming the delay could kill prospects for the plant’s continued operations.

The decision came following testimony; Council members bitterly complained that they were left out of negotiations about the renewal, and expressed frustrated about the proposal’s perceived shortcomings, which they felt they could have helped avoid.

The proposed lease was negotiated between NGS plant owners—primarily the Salt River Project, which is based in Phoenix—and a team of experts assembled by Shelly. It has several provisions widely seen as favorable to the Navajo people, and would raise annual revenues from about $3 million a year secured in the original 1969 lease to $44 million a year during the tenure of the new lease, which is from 2019 to 2044. But Council delegates found at least six sticking points worthy of amendments.

“I’m not anti-NGS,” said Delegate Leonard Tsosie, who convinced his fellow Council members to table the legislation. “I really feel that by allowing this to move forward, we will shortchange the Navajo Nation and the Navajo people... The advisors of the President were wrong to shortchange and leave out Navajo Nation Council.”

Shelly’s spokesman, Erny Zah, says the Council was invited to give input throughout the two-and-a-half year negotiation of the lease. “We have been asking the council for input. We reported back to them, and at times we found it difficult because the Council just wouldn’t show up to meetings. We tried to brief them in executive session... ”

Shelly, whose team included experts in the fields of energy, law and environmental policy, has suggested that he didn’t want to turn the lease negotiations into a political process, and sent the Council a letter after their vote, urging them to give the lease renewal a green light. “The Team negotiated a good solid agreement for the Navajo Nation,” he wrote. “We have been told by SRP there is little, if no room to renegotiate.”

Sam Woods is Shelly’s energy advisor, and participated on the negotiating team. He described some aspects of the negotiations in a presentation to the Council. “Our lease perspectives included the need and right to maximize payments to the Navajo Nation,” he said. “Our team stood on an anchor that Navajo has changed, and desires equality. That we need to see more revenues existing in the current jobs and develop the skills and talents to be professionals and leaders of these operations in the future. Also further recognizing that Navajo resources—the land, the air, the water and people—are used to subsidize and improve other people’s lifestyles outside the Navajo Nation. Our impacted communities need to be compensated and our youth to continue their academic endeavors. At the beginning, we wanted SRP participants to step in our shoes, look into our eyes, feel our heartbeat.”

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In addition to the increased revenue, the new lease says the Navajo Nation would become part-owners of NGS and owners of the transmission lines leading from it. It also secures scholarship money for Navajo youth, and assures the continuation of more than 800 jobs.

But for some, the terms don’t remedy decades of poor economic returns and environmental degradation. “We are the suppliers of cheap energy for the rest of Arizona,” Nicole Horseherder, a lifelong resident of Black Mesa, which is near the Kayenta Mine, told the council. “But we can’t do this by putting the 800 combined jobs of the mine and NGS over the health of thousands, and the livelihoods of more than 20,000 Black Mesa residents. All of us need clean air, clean water, productive and clean land. Not land damaged by mining … and air polluted by poisons.”

Black Mesa residents, as well as residents in nearby Hopi lands, have long complained about the drying of their sacred and sustaining springs, which they say have been hammered by water withdrawals for mining operations at Peabody Coal, operators of the Kayenta Mine. “For over 35 years, between 1971 and 2005, Peabody removed water from Navajo Aquifer at a rate of 4,000 acre-feet per year, which is three times more than the aquifer’s ability to recharge itself,” Horseherder said. “This is in an area that gets less than eight inches of annual rainfall.”

Hydrological experts have long disagreed with Black Mesa residents—and often with each other—about whether the aquifer has been damaged by mining. And allegations about the health impacts of the coal-fired power plant haven’t been formally studied by either the federal government or the Navajo Nation, so there is no way to assess the statistical significance of growing anecdotal warning signs.

“Likely impacts include hundreds of asthma attacks, bronchitis, premature deaths,” Horseherder told the council. She was the only grassroots activist invited to address the council on the matter, but she was joined by at least a dozen women who marched three miles to the council chambers to protest the lease extension. The women and their supporters were outnumbered by scores of miners and NGS workers, who were bussed in by SRP to witness the discussions.

The Council came up with six amendments they would like to make to the lease renewal. They would like the Navajo Nation to re-assert its claim to 50,000 acre-feet a year of Colorado River water NGS has been using for free since the beginning of the lease. They hope to shore up the use of the Navajo Preference in Employment Act in SRP’s hiring protocols for the mine and plant; they want fewer hiring decisions left up to the company’s discretion. They’d like to see the Navajo Business Opportunity Act enforced in contracting. They want to address the perceived conflict of interest between the federal government’s trust responsibility and the part ownership in the mine by the Bureau of Reclamation. They want to adequately remediate fly ash, the byproduct of coal-fired electricity production that contains toxins but is currently unregulated by the federal government. And they have questions about the rigor of two economic impact studies of NGS and the mine done by economic experts at Arizona State University.

Council members said they hope they’ve secured a seat at the table with Salt River Project negotiators, and they hoped to reconvene by April 29 with a lease renewal they could accept.

Another variable in this fight is that NGS is already facing daunting regulatory challenges. The U.S. Environmental Protection Agency has recently recommended up to $1.1 billion in new pollution control technology to rein in the plant’s contributions to regional haze, especially as it effects Grand Canyon National Park.