Arizona coal communities could get federal aid for closure of Navajo mine, power plant

Communities hurt by the pending closure of the Navajo Generating Station and Kayenta Mine could apply for federal aid under a bill introduced by Rep. Tom O'Halleran on Thursday.

The Democrat from Arizona's 1st Congressional District said the aim of the ‘‘Providing Recovery Opportunities & Mitigating Industry’s Shifting Economics," or PROMISE Act, is to help those communities transition to new industries.

The mine near Kayenta closed last month after sending its final load of coal to the power plant near Page. The plant has about enough coal stacked outside to run through early October before it will power down.

They are closing because the utilities that co-own the plant decided in 2017 they could get cheaper power from other sources. The mine has no other customers.

"Sadly when you are in remote areas like this, it is even more devastating for the local economies," O'Halleran said Thursday after introducing the bill.

The bill wouldn't help all communities in the U.S. hurt by closing coal plants, of which there are many.

The Navajo plant is special because the U.S. Bureau of Reclamation owns about one-fourth of the power plant, using its share to run pumps on the Central Arizona Project canal to get Colorado River water to Phoenix and Tucson.

O'Halleran said that means the federal government has a responsibility to help replace the plant.

"It is very similar to a concept used when military bases close down," he said.

Help for 7 years after closure

The bill doesn't prescribe a specific dollar figure for the communities, but would allow for the counties, cities, towns, school districts and tribes affected by the closure of the plant and mine to apply for federal funds.

The amount of money those entities could apply for would be equal to 80% of the revenue lost in the first year, and would decline by 10% a year for six more years.

"It is going to be an ongoing process as we move along as we identify what those numbers are," O'Halleran said.

Those revenue calculations are likely to be complex because they cover things such as lost lease payments the power plant pays the tribe, property taxes, sales taxes, royalties and other economic benefits the coal facilities bring to the region.

O'Halleran has Democratic co-sponsors but said he will reach out to Republicans to discuss the measure.

He said his staff has consulted with the various entities that will lose tax revenue with the facilities' closure to ensure the bill covers all those affected. 

The bill also includes a provision to help retrain dislocated workers.

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Retraining workers, repurposing infrastructure

Salt River Project, which operates the power plant for the other owners, already has begun a limited worker-retraining effort.

"Quite frankly, if they (SRP) are willing to do it, then the federal government should be willing to keep up their end of the bargain," O'Halleran said.

The bill also has measures for the federal government to help tribal entities take over abandoned infrastructure, such as the power plant, for new uses.

O'Halleran said similar redevelopments of government property have occurred, including the 1990s transformation of Naval Air Station Glenview and the U.S. Army's Ft. Sheridan transition to housing outside Chicago. 

The Navajo Nation has asked SRP to leave standing several buildings at the power plant that the tribe could repurpose. The tribe also is keeping water pumps from Lake Powell, a power-line switchyard and the railroad tracks leading to the mine.

What the tribe will use those facilities for is not yet determined.

"The naval base in Glenview was sold and is now shopping centers and homes and golf courses there," he said. "Fort Sheridan ... That base closed and turned into a profit center for the area."

Navajo, Hopi leaders respond

Navajo and Hopi officials praised the bill.

"We look forward to working with Congress and this Administration on providing a future for our Navajo Nation and our workers as we transition our economy and help our workers succeed," Navajo Nation President Jonathan Nez said in a prepared statement. 

The smaller Hopi Tribe gets about 80% of its budget from coal activities.

"The federal government cannot act to shut down this vital regional economic driver, that it owns, without taking steps to protect the local communities,”  Hopi Chairman Timothy Nuvangyaoma said in a statement. 

Reach reporter Ryan Randazzo at ryan.randazzo@arizonarepublic.com or 602-444-4331. Follow him on Twitter, @UtilityReporter.