An agreement to keep the Navajo Generating Station open through 2019 is moving closer to reality.
During the Page Regional Economic Outlook Conference hosted by The Chamber Page Lake Powell last week, Joe Frazier, plant manager at NGS, reported task forces representing the Navajo Nation and the owners of NGS had reached an agreement on a proposal to extend the lease for two years.
The proposal was sent to the Navajo Nation last week. To keep the plant open, the Navajo Nation and the owners of NGS must approve it by July 1. Without the approval, the power plant will close July 1 and decommissioning will begin immediately.
Frazier said simple economics is forcing the owners of the plant to get out of the coal-powered electrical plant.
“Right now to generate a megawatt of power, we’re in the $38 to $39 range,” Frazier said. “We run it in the $50 range after 2019. You can buy it off the market cheaper than we can produce it here.”
Due to the low cost of natural gas, electricity on the open market is currently selling for $24 to $25 a megawatt. Frazier said by agreeing to keep NGS open two years, the owners will lose $70 million.
“They’re OK with that because they wanted to take care of those employees,” Frazier said.
The employees are the key to Salt River Project, which manages the plant, and the other owners, Frazier said. NGS is designed to run with 450 employees, and the jobs are some of the top paying in the region.

“No NGS regular employee will be laid off if we run until 2019,” Frazier said. “They will be offered a job with SRP.”
Few if any of those jobs will be in the Page region, he said. Most will likely be in the Phoenix area.
Frazier said over the last few months, NGS has lost approximately 40 employees.
Some of those moved to other positions in SRP while some left the company to work elsewhere. As employees leave, the positions are being filled with contract workers.
Frazier said when NGS does close, SRP will contract out the jobs of closing and removing the plant. That will lead to temporary, local jobs, he said.
The key now is getting the extension approved.
“Right now, there’s an agreement out there that has been negotiated by a Navajo Nation task force and the owner’s task force,” Frazier said. “It has been approved.”
The Navajo Nation Council got its first look at the agreement last week and will accept comments beginning May 24.
To meet the July 1 deadline, the Navajo Nation Council will need to approve the agreement by June 16. The owners will then have until July 1 to do the same.
Frazier said two of the owners, the Bureau of Reclamation and Los Angeles Water and Power, will have until Dec. 1 to approve the extension. He explained the bureau needs more time due to federal regulations and the Los Angeles utility is getting more time because they will not be involved with running the plant, only closing it.
For now, he said, the employees are doing their best and keeping a positive attitude as their future is debated.
“It is difficult being an employee out there,” he said. “Their jobs are being taken away. They take pride in the job they do. We want to finish strong.”
The closure of NGS was a key focus of the conference with economic leaders in Page, Coconino County, the Navajo Nation and the region looking at ways to ease the economic pain when the plant closes.
“We are looking at a major employer with high-paying jobs that may be closing,” County Supervisor Lena Fowler said. “This impacts all of us so we have to be prepared. That’s why we’re here today. I don’t have any doubt we’re going to get this done.”