In these divided times, take comfort that libertarians, environmentalists, the natural gas industry and renewable resource energy companies all can agree on something.
Arizona is home to the largest coal power plants in the West, the Navajo Generating Station outside of Page. That may change at the end of next year as the Salt River Project is the majority stakeholder of the plant, and the Navajo Nation has agreed to begin shutting it down in December 2019.
Together the plant and the Kayenta mine that supplies its coal are the major revenue source for the Navajo and Hopi tribes. The Kayenta Mine alone provides 85 percent of the Hopi’s annual revenue. Which I would argue is symptom of a larger failure of this country to invest in a people whose present condition made others success possible. We heard during the 2016 election of the woes of Appalachian miners and their changing landscape. Now it has come to a reservation that’s larger than the state of West Virginia.
“Because of Obama’s agenda to shut down our energy supply and make energy costs skyrocket, no one in DC listened to us,” said Rep. Paul Gosar for Arizona’s 4th District in his support for the group Yes to NGS that has launched since the closure announcement. “Now we have a new dawn, a president who understands the value of a reliable and affordable energy grid.”
Arizona, welcome to the national debate on coal. We could chalk the closure up to the “War on Coal” or spend 30 seconds and read the Salt River Project’s press release announcing the decision.
“The owners made the difficult decision … to end their participation in NGS (Navajo Generating Station) when the current lease term ends in 2019 after it became clear that current and forecasted low natural gas prices had made coal generation there uneconomical.”
You would assume that competition and free markets have won the day. The march of technology has made natural gas cost $16 per megawatt hour to coal’s $22 cost per megawatt hour, according to CBS News. The rightful heir to the energy throne named by requiring less infrastructure to transport and produce electricity. Yet the coal industry’s death throes are so loud you’d think it has black lung from working its own mines.
The Columbia Center on Global Energy Policy put coal’s demise as: 49 percent from natural gas prices. 26 percent because the demand for electricity “has essentially flatlined. 18 percent because of growth in renewable energy (the fish are eating each other in a pond that’s not getting bigger).
For simplicity’s sake, the entire 7 percent remainder can be the cost of rules like “stream protection rule,” which says you can’t do cartoonishly evil things like dump your coal debris in streams. Coal supporters having lost in the free market are now left to pretend that 7 percent is the real difference maker.
The Yes to NGS organization claims that: “A premature plant shutdown could increase energy costs and create reliability issues for the Arizona grid.”
Both claims are baseless, however. Energy isn’t going to cost more because the more expensive option goes away. The Central Arizona Project uses the NGS to power pumps to bring water to Tucson from the Colorado River. CAP could have saved $38.5 million in 2016 if they purchased the electricity elsewhere according to the The Arizona Republic on Feb 13.
“Reliability,” I interpret as an attempt to rebrand the status quo. This buzzword is used by Rep. Gosar, the National Coal Council, Yes to NGS and the Trump administration. “Reliability” is at the center of Energy Secretary Rick Perry’s $10 billion–a–year plan to help prop up failing plants like NGS. That old power plants should be compensated for their reliability to power grids.
The problem for all of these groups is that of all the major power disruptions nationwide over the past five years, only 0.00007 percent were due to fuel supply problems, according to an October 2017 Rhodium Group Study.
Presently, the Arizona Legislature is being lobbied to exempt coal at NGS from the state’s Sales Tax that would amount to $35 million in the hope of making it attractive to buyers.
Keep in mind that no actual names have been given as prospective buyers. But Salt River Project President David Rousseau suspects a “unicorn energy company” might be interested in purchasing the plant.
We can scrap every single environmental safeguard and allow coal debris to be dumped in your cereal bowl, and it would make about 7 percent difference, but it doesn’t change the price of natural gas. We need to help and plan with who are survived by the death of coal. Unicorns aren’t a sound basis for policy.
During a Phoenix Yes to NGS Rally, State Sen. Jamescita Peshlakai said she’d fight for workers: “Prepare for the day that there is no more coal in the ground.”
One of the very first practical steps that should be taken is the water that what would have gone to the the plant’s operations will now go to the state of Arizona. The state then needs to ensure the water goes to the tribes when 2020 arrives.