Navajo Generating Station officially received a second lease on life Saturday.
After the owners of NGS agreed to an amended replacement lease to keep the plant open through the end of 2019, Navajo Nation President Russell Begaye signed the lease agreement July 1, the self-imposed deadline for a new agreement.
The replacement lease will protect 700 jobs at NGS and the related Kayenta coal mine, provide hundreds of millions of dollars to the Navajo Nation and will guarantee all NGS employees will be offered positions within Salt River Project, one of the owners of the plant and the operator of NGS.
In addition, the lease will require the owners to tear down NGS when it closes at the end of 2019. The Navajo Nation will also be given the train line that runs from Kayenta to NGS as well as some of the power extension lines that run from Page to Phoenix, Tucson, Nevada and even California.
The owners of NGS announced late last year they were going to close the plant because the cost of operating a coal-powered plant had become too expensive. The rising costs of coal had made operating the plant cost prohibitive, with the owners losing money for several years. The owners of NGS came back a few months later and announced they were willing to keep the plant open two more years if they could reach a lease agreement with the Navajo Nation. The extension is primarily to protect the jobs, almost all that are filled with Navajo and Hopi tribe members.

After months of negotiations between task forces representing the owners and the Navajo Nation, the groups announced they had reached an agreement. The Navajo Nation Council approved the agreement on an 18-4 vote last week after approving nine amendments. After the vote, SRP said it was pleased the process was moving forward.
“The owners are very pleased that the Navajo Nation Council approved the replacement lease,” said Mike Hummel, deputy general manager of SRP, the plant’s operator. “This agreement provides meaningful benefits for all involved and creates a path forward during this challenging transition. Importantly to us, the replacement lease paves the way for SRP employees at the plant to remain on the job for an additional two-plus years and allows us to fulfill our commitment to redeploying all regular NGS employees to other SRP facilities after 2019 should they so choose.”
While SRP has been the public face of NGS since its opening in 1974, the plant is owned by five utilities.
The owners of NGS include SRP, the U.S. Bureau of Reclamation, Arizona Public Service Co., Tucson Electric Power Co. and NV Energy.
While the news that the plant was remaining open was welcome by most in the Page area, several Navajo environmental groups were disappointed.
The biggest area of frustration for those opposed was an element of the agreement that will settle all disputes in federal or state courts using federal or state law instead of Navajo Courts following Navajo law. The Navajo Nation Council considered an amendment to revert to Navajo law, but after the NGS owners said the amendment would be an absolute “deal breaker,” the amendment failed by a 16-6 vote.
“There’s no other way to put it: with this agreement, the Navajo Nation had their hands tied behind their back. We are being saddled with hundreds of millions of dollars of liability,” said Adella Begaye of the Navajo community group Diné CARE. “The deal was rammed through by holding the Navajo tribal council hostage through an 11th-hour ultimatum from the very same people that were given permission to exploit and plunder our natural resources.”
“The rest of the world is moving emphatically toward a clean energy economy. The utilities are running away from NGS and coal as fast as they can because coal can no longer compete economically against cleaner sources of energy,” said Nadine Narindrankura of Tó Nizhóní Ání, another Navajo community group. “It’s ludicrous for our leaders to cling to coal. Tying our people to a sinking ship will only bankrupt us and put off the inevitable for two short years.”
With Begaye signing the lease and keeping the plant open, the two year extension, along with hundreds of jobs available during the two-year process of tearing down and removing the plant, will give Page, Coconino County and the Navajo and Hopi tribes times to look at economic opportunities that could ease the pain when the plant does close.
Until then, it will now be business and usual at the Page power plant.