If This Arizona Energy Plant Shuts Down, The Consequences Will Be Dire

Craig Stevens Former Advisor to Energy Secretary Bodman
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The increasing debate about Arizona’s energy future has become a test case for the current administration’s pledge to support energy diversity. Basics like energy security, reliability and affordability are common sense goals for energy policy. These priorities take on far greater complexity in Arizona than perhaps anywhere else in the nation.

The decisions we make today about our energy future will have an enormous impact on the Navajo Nation and Hopi Tribe. For decades, tribal people in the northernmost part of the state have offered the use of their land and their resources to create the energy that powers our homes and moves water across Arizona to sustain lifestyles. Few could argue the tremendous growth and prosperity we’ve all enjoyed as a result.

At the center of the issue is the Navajo Generating Station, a coal-fueled power plant sanctioned by Congress in the late 1960s to provide power for the Central Arizona Project.  The leaders of the day recognized their trust responsibility to the Navajo and Hopi people.  They had the wisdom to build the workhorse of our power supply on tribal lands using tribally owned coal to create skilled jobs and sustaining revenues that would span several generations.

Yet this grand plan that was sanctioned by Congress and subject to two decades of debate has been short-circuited by the utility owners who announced a plan for early closure at the end of 2019. Far too little attention is being paid to dire impacts that losing this plant would have on traditional working families and entire tribal communities.

At risk are more than 85 percent of the Hopi’s annual general fund budget and 22 percent for the Navajo.  Add to this thousands of direct and indirect jobs mostly held by tribal people. Many leaders are warning that parents will be forced to move away from their reservation communities to find jobs so they can raise their children and care for their extended families in a way that’s proper.  No Navajo Chapter or Hopi Village will avoid the severe effects of early shut down being advanced a quarter century ahead of schedule.  We cannot turn our back on the Hopi and Navajo –  nor should we.

Beyond the destructive impacts to tribal families, early closure has sparked concern about losing base-load power capacity that may not be so easy to replace.  Energy analysts warn about putting too many eggs in one basket, placing too much reliance on imported natural gas, subjecting the region to grid reliability issues and raising concerns about higher energy and water rates.

At a Phoenix listening session last summer, then Hopi Chairman Honanie told the Department of the Interior that plant closure would eliminate the vast majority of the tribe’s general fund budget.  This would severely curtail government services and tribal jobs, given the Hopi government is the largest employer.  Early closure would hurt the Hopi people, the Chairman said, calling the issue “a matter of survival.” If this doesn’t move us to action, we’re not listening.

Fortunately the effort to keep the Navajo Generating Station operating beyond 2019 has captured the attention of the current administration.  Over the past year, Interior Secretary Zinke has been personally engaged in the effort to transition the power plant to new owners, pledging his commitment to working with all parties, including current and future owners, to keep the plant operational in support of good paying tribal jobs.

That’s important given about 25 percent of the plant is held in trust for the benefit of the Department of the Interior, which intends to keep its ownership position.  With Secretary Zinke taking the lead, others should follow.  It’s vital that we allow the sale of the plant to take its course.

Transitioning the plant to a new group of investors would benefit everyone.  Workers at the mine and power plant will keep their jobs, stay at home with their families, and attend the important parent-teacher conferences, science fairs, and ball games. Tribal businesses will continue to have a customer base. Programs like Head Start will continue for children.

There is no question that selling the plant is a complex undertaking requiring patience and time for due diligence.  An internationally recognized investment banking firm is leading the marketing process and identified interest from 15 credible private equity firms and power plant operators.  Serious investors are kicking the tires, and ideally the field of investors will narrow toward a final selection of new owners.

The current utility owners and the Central Arizona Project Board should make every effort to support this process.

It is shortsighted to put tribal jobs and economies at risk for Navajo and Hopi families. We owe it to the tribes, to their families and their children to step up support and keep the Navajo Generating Station online and long-term.  The future of these traditional working families depends on us, just as we have depended on them.

Craig Stevens is a Former Senior Advisor to Energy Secretary Sam Bodman.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.