March 1, 2019 Read More →

Cleanup liability stalls talks over potential sale of Navajo coal plant

Arizona Republic:

Negotiations for a Navajo Nation energy company to take over the troubled coal plant near Page have hit a major impasse over who could be responsible for the eventual cost of cleanup.

The owners of the Navajo Generating Station, which is on tribal land and fed by a mine on Navajo and Hopi land, are planning to close the power plant this year.

The Navajo Transitional Energy Company, or NTEC, which is owned by the tribe, has been negotiating to take over the plant, which is the largest coal-fired generator in the West. But a Feb. 25 letter from NTEC to the power plant owners, which include Salt River Project and Arizona Public Service Co., indicates the deal has stalled because the parties cannot agree over the long-term liability for the plant.

The parties met Wednesday and an SRP spokesman said Thursday the deal stalled. “The discussion we had with them yesterday did end at an impasse,” SRP spokesman Scott Harelson said Thursday. “We don’t see a path forward.”

Because SRP and the other owners have run the plant since it opened in the 1970s, they are responsible for the majority of the cleanup, even if new owners take over the plant and run it for another decade or two.

The plant’s current owners have agreed to put money in an escrow account to pay for the eventual cleanup of the plant if it is transferred to NTEC. And NTEC has agreed to a second clean-up fund as a “backstop.” NTEC has offered to issue a performance bond, and is willing to negotiate the amount, to pay any potential cleanup liability beyond what SRP is offering. But SRP wants even more: full release from any further liability, according to the letter. Harelson confirmed the negotiations ended over clean-up liabilities.

More: ‘We don’t see a path forward’: Navajo coal plant negotiations hit big roadblock

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