Navajo Generating System may lose its biggest customer
Feb. 6, 2018
Central Arizona Project is considering making a break from coal, a move that could have a negative impact on the Navajo Generating System.
The Navajo Generating System was built as a part of the CAP as a way for the power from the plant to be used to pump water into Phoenix and Tuscon while the surplus power would be sold to repay the debt.
CAP is now considering splitting from the system as they look at natural gas power and green power options. If CAP breaks away from the system, it will destroy the economics of the plant, says former Congressman John Shadegg.
“They don’t like the politics of coal,” Shadegg says. “Quite frankly, I don’t think they like dealing with the Navajo tribe… For 40 years, since 1974, we have asked the people of the Navajo reservation to produce coal and run that plant and we’ve gotten cheap water.”
One of the advantages of taking coal from the plant is a stable market. Shadegg says the Valley has saved a billion dollars by using stably priced coal rather than buying power on the market.
If CAP should leave and no one replaces them, then owners of the plant with permission can bulldoze it and coal can never again compete with other fuels in Arizona. If someone does replace CAP as a primary customer, then there will be a price competition between natural gas and coal.
There are many people who are in favor of bulldozing the plant due to its perceived uncleanliness, but Shadegg disagrees, stating that the Navajo have one of the cleanest coal plants in the country. He says a billion dollars was spent recently to clean it up. If it stays open, Shadegg says they will spend more money on additional cleanup.
At the moment, there are buyers looking at the plant to take it off of the Navajo’s hands. However, if CAP, being their biggest customer, decides to leave then it will discourage possible investors from buying.