The utility owners of the Navajo Generating Station (NGS) in Arizona have voted to shut down the 2,250-MW coal-fired power plant in December 2019.
The decision to close the plant on tribal land near Page along the border with Utah was based on the “rapidly changing economics of the energy industry,” which has seen natural gas prices sink to record lows, the plant’s owners said.
Plant operator Salt River Project (SRP) said, “NGS and its employees are one reason why this region, the state of Arizona and the Phoenix metropolitan area have been able to grow and thrive. However, SRP has an obligation to provide low-cost service to our more than 1 million customers and the higher cost of operating NGS would be borne by our customers.”
The utility cited a recent study by the National Renewable Energy Laboratory that suggests a power price turnaround for the plant “might be years away, especially if natural gas prices remain low.”
Closure of the plant when its lease ends in December 2019 would, however, be conditional on whether the utilities can reach an agreement with the Navajo Nation. NGS employs more than 400 full-time employees, more than 90% of whom are Navajo.
“This would preserve, for almost three years, continued employment at the plant and additional revenues for the Navajo Nation and the Hopi Tribe,” the plant’s owners said. “It also provides the Nation or others with the potential to operate the plant beyond 2019 should they so choose—although the current non-governmental group does not intend to be participants at that time.”
SRP is a utility owner along with Arizona Public Service Co., Tucson Electric Power Co., and NV Energy. The U.S. Bureau of Reclamation is a participant in the project.
Construction of the three-unit plant began in 1969. The first 750-MW unit began producing electricity in 1974. Commercial operation of the other units began in 1975 and 1976. The plant sources low-sulfur bituminous coal from Peabody Western Coal Co.’s Kayenta Mine, which is located 78 miles to the southeast.
—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)