Republican moves on Arizona coal plant show they don’t believe their own rhetoric
The Navajo Generating Station (NGS), a coal-fired power plant in Northern Arizona, has in the past provided reliable power for consumers and good-paying jobs for tribal communities. As with other sites of this type, increased competition from natural gas and renewable energy has rendered NGS unprofitable. Instead of helping tribes prepare for the future, Republican coal loyalists are abusing congressional power to extend the life of NGS beyond 2019. In the process, they are acknowledging the failure of their conservative economic and governing principles.
Conservatives are quick to trumpet their support for capitalism and the value of unfettered competition. Their appreciation for the free market does not appear to extend to NGS. When the utility’s owners announced their decision to cease operations at NGS, they said the decision was “based on the rapidly changing economics of the energy industry, which has seen natural gas prices sink to record lows and become a viable long-term and economical alternative to coal power.”
This explanation makes perfect sense, as the U.S. energy market has changed dramatically in recent years. Between 2010 and today, coal’s share of the electricity mix has decreased from 45 percent to 30 percent, a reduction that has led to the retirement of 268 coal-burning power plants. This is what happens in a competitive economy.
NGS was constructed in 1969 to power the 336-mile Colorado River water distribution system known as the Central Arizona Project (CAP), and since then, NGS has supplied much of CAP’s power. But recent advancements in the market have led the Central Arizona Water Conservation District (CAWCD), the public entity that manages CAP, to look for cheaper energy options.
Republicans lambasted CAWCD’s decision to seek less expensive power at an April 12 hearing of the House Energy and Mineral Resources Subcommittee. On April 16, CAP responded with a letter reading in part, “CAP has significantly reduced pumping energy costs to CAP water users in recent years by curtailing generation at NGS and buying more energy from the market, yielding substantial savings to CAP Indian tribes and municipal providers.”
Both the utilities that own NGS and the entities that purchase its power have stated, repeatedly, that competition from cheaper energy sources on the open market has led them to move away from NGS. This sounds like a perfect example of competition working its magic to provide consumers with a cheaper product.
Rather than embracing the market’s decision, Republican lawmakers have doubled down on their allegiance to coal companies like Peabody Energy for the sake of artificially propping up NGS. In doing so, they have tossed their professed commitment to limited government out the window. On May 9, my colleague Rep. Paul Gosar (R-Ariz.) unveiled a draft bill that would force the CAWCD to purchase above-market-price power from NGS for the foreseeable future.
CAWCD has a responsibility to deliver water supplies to its Arizona customers at the lowest reasonable cost. By mandating that CAWCD purchase NGS power, Gosar’s bill increases rates for millions of customers.
Adding insult to injury, the draft bill would mandate preservation of NGS facilities until CAWCD repays all the debt associated with the construction of CAP. This could take upwards of two decades and would prevent the decommissioning and land reclamation process from going forward, and prevent the facilities from being repurposed into new opportunities for the tribes.
The House Energy and Mineral Resources Subcommittee was planning to hold a hearing on the draft legislation in mid-May. The hearing was canceled at the last minute for reasons we can only imagine. But since Arizona Republicans have proven willing to quickly forget their conservative “principles” to bail out a coal company, we’d be fools to believe the bill is gone for good.
The closure of NGS presents a set of challenges that must be tackled by tribal leaders, state officials, community organizations and the Department of the Interior (DOI). Congress should focus on passing bills like H.R. 4506, the Jobs for Tribes Act – which establishes and maintains a business incubator program within DOI to promote Native economic development and entrepreneurship – and on rejecting Trump administration budgets that slash funding for tribal offices and programs. The last thing tribes need is Gosar’s bill or a House Republican majority willing to treat it as a serious proposal.
Between now and December 2019, we should be helping the tribes identify, and if necessary create, new mechanisms to replace coal revenues. We should be investing in tribal communities, not stringing them along with false hopes of a coal resurgence and continued NGS operations. Market forces are pushing coal power out of favor with energy companies. Government interventions to bail out coal and pass the costs on to ratepayers are not a practical solution.
It’s time to acknowledge the Republican approach to NGS for what it is – a hypocritical handout to an outdated fuel source wrapped in concern for tribal well-being.