The potential new operator of the biggest coal-fired energy plant within the western U.S. instructed Arizona regulators this week the corporate would run the Navajo Generating Station (NGS) at lower than half its put in era capability so as to preserve profitability. An official for Illinois-based Middle River Power (MRP) additionally mentioned the plant would function with fewer staff and would pursue a brand new lease and coal provide settlement.
The present homeowners of the two,250-MW Navajo station in Page, Arizona, which embody Arizona Public Service (APS), have mentioned they plan to shut the plant in 2019 except it may be offered. Negotiations are persevering with with New York-based Avenue Capital Group, a worldwide funding agency that invests in distressed firms and the distressed debt market, because the potential new proprietor, with MRP—headquartered within the Chicago suburb of Deerfield—because the potential new operator. Russell Begaye, president of the Navajo Nation on whose land the plant sits, lately mentioned a lease settlement with Avenue Capital and MRP may very well be mentioned by tribal lawmakers at a gathering in October.
MRP’s senior vice chairman, Joseph Greco, on August 14 instructed the Arizona Corporation Commission, the group that regulates state utilities, that “We consider there’s a answer to be made” concerning working the plant at a revenue, together with working the ability at 44% of capability. Greco mentioned non-disclosure agreements meant he may provide few particulars, however he instructed officers his firm would make sure the plant may present dependable baseload energy and stay financial.
MRP operates about 2,000 MW of energy era belongings, together with coal, pure fuel, geothermal, and photo voltaic, in Virginia, West Virginia, California, and Maryland.
The Navajo station’s coal comes from the close by Kayenta Mine, which is owned by the Navajo and Hopi tribes and operated by Peabody Energy. The plant and the mine principally make use of staff from every tribe. The Navajo Nation has mentioned about 22% of its funds comes from coal and lease provide agreements with the NGS.
E&E News, in the meantime, on August 15 reported that Peabody has lobbied the federal authorities in an effort to maintain the plant and mine working. E&E News obtained emails and different paperwork via a Freedom of Information Act request to the U.S. Department of the Interior. The info reveals how federal officers have acted with Peabody to maintain the plant open, starting just a few years in the past, as POWER beforehand reported.
Deb Scott, senior director of regulatory coverage at Salt River Project, one of many plant’s homeowners together with APS, NV Energy, Tucson Electric Power, and the U.S. Bureau of Reclamation, this week mentioned 140 of the plant’s 443 staff have left for different jobs, with their positions now held by contractors.
MPR has mentioned it doesn’t need to burn pure fuel on the Navajo plant as a result of the fuel market is just too unstable, and since it has a prepared provide of coal from the close by mine. MRP, which would wish to seek out new patrons for the plant’s energy, has mentioned persevering with the plant’s relationship with the Central Arizona Project (CAP), which has beforehand obtained about 75% of its electrical energy from the NGS to maneuver water via its canal system within the state. CAP officers, although, have mentioned it’s cheaper for them to purchase energy on the open market from different sources.
MRP has not mentioned how lengthy it will function the plant if it emerges as the client. Tribal officers this week mentioned the plant must function at the very least one other 5 to 10 years so as to permit time to seek out different sources of income for his or her funds. The plant was initially scheduled to function till at the very least 2044 earlier than the present homeowners voted to shut it by year-end 2019.
—Darrell Proctor is a POWER affiliate editor (@DarrellProctor1, @POWERjournal).
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