Debating a lease renewal for the Navajo Generating Station

The Navajo Nation Council has approved a controversial renewal to the tribe’s lease with the Navajo Generating Station near Page, Ariz. – but with 15 caveats that could break the deal.

Navajo Nation President Ben Shelly gave the thumbs-up to the lease extension in February, after it was negotiated between a team of experts assembled by him and representatives from the Salt River Project, part owners of the coal-fired power plant. The extension proposal raises annual tribal 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, between 2019 and 2044. But when it was presented to the Navajo Council in early March, delegates bristled at having been left out of the negotiations.

At first, the council ruled the legislation out of order, citing a little-known and never-before-used portion of the Navajo Nation code that mandated legislative representation on energy deals.

Then, during its regularly scheduled spring session in mid-April, council delegates spent hours dissecting the lease extension’s details – and chastising the executive branch for excluding council during the drafting stages. Even though Shelly sent a letter to the council asking them to pass the extension – and visited chambers at one point while they deliberated – the council demurred, and tabled a decision until April 29.

At the conclusion of the spring session, the council had proposed six amendments to attach to the lease, should they approve it. By the time they passed it on Monday, that number had grown to 15.

Among other points, the amendments attempt to solidify the Navajo Nation’s rights to 50,000 acrefeet a year of Colorado River water the tribe has been leasing to the Navajo Generating Station since the plant’s opening.

They also want to see more careful control of fly ash, a byproduct of coal-fired electricity production that contains toxins but is currently unregulated by the federal government.

They want NGS employment practices to reflect Navajo hiring preference more rigorously than the lease extension had initially spelled out. They’ve even asked to add a bit of political activism into the lease’s language, with the statement, “The Navajo Nation hereby declares that the United States’ contractual interest, held by the Salt River Project for the Bureau of Reclamation, to the power generated by 24.3 percent of the Navajo Generating Station’s capacity is in direct conflict with the federal government’s trust responsibilities and duties to the Navajo Nation and the Navajo people.”

It is unclear whether the lease extension will fail as a result of the proposed changes; Shelly’s spokesman Erny Zah had earlier suggested that it could. On Tuesday, he said the negotiating parties would be scrutinizing the proposed language changes.

Scott Harelson, spokesman for the Salt River Project, issued a statement noting that the owners of the Navajo Generating Station “are thankful that the Navajo Council has voted to approve legislation that would extend the lease for this important Arizona resource. However, the action taken by the council last night also included the addition of several new amendments. The NGS owners will meet to review the implications and discuss the new amendments to determine how to proceed.”

Harelson pointed out that NGS provides electricity for millions of customers in the Southwest and jobs for about 520 people, more than 85 percent of them Navajo. The Kayenta Mine, the plant’s coal supplier, employs more than 400 people, most of whom are also Native American.

And he cited a recent Arizona State University study indicating that NGS and the Kayenta Mine stand to contribute nearly $13 billion to the Navajo Nation economy through sustained jobs and wages, the station it stays operational until 2044.

NGS faces daunting challenges besides the thorny lease-approval process. The EPA recently announced proposed pollution controls related to regional haze that could cost the plant $1.1 billion if they are enacted. And part owners of the plant in both Nevada and California – the Los Angeles Department of Water and Power, and NV Energy – have made moves to abandon coal-fired electricity production at NGS in favor of cleaner energy. That would leave SRP, the U.S. Bureau of Reclamation, Arizona Public Service and Tucson Electric Power to travel the costly road ahead.

Economic benefits aside, there’s a vocal segment of the population both on and off the reservation that wouldn’t worry much over the plant’s closure. Those are the grassroots activists who point to decades of low tribal revenues from the plant, air pollution they blame for sickening nearby residents, and many years of water withdrawals from the N-aquifer by Peabody Coal, NGS’s supplier, which residents say has dried up sacred and sustaining springs in the Back Mesa area.

“We are the suppliers of cheap energy for the rest of Arizona,” Nicole Horseherder, a lifelong resident of Black Mesa, told the Navajo Council during its spring session. “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.”

Activists have long argued that the Navajo Nation should steer away from coal and toward renewable-energy options.

This story was adapted from Anne Minard’s ongoing coverage of NGS for Indian Country Today, online at

From May 2013. Read similar stories about .