Loss of Navajo Generating Station could cost state billions - Ahwatukee Foothills News: Money

Loss of Navajo Generating Station could cost state billions

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Posted: Wednesday, March 7, 2012 7:00 pm

Arizona stands to lose approximately $18 billion in gross state product between 2017 and 2044 — including up to 3,400 jobs each year — unless agreements can be reached to keep the Navajo Generating Station (NGS) in northern Arizona operating beyond 2019, according to a study prepared for Salt River Project and the Navajo Nation by the L William Seidman Research Institute at the W.P. Carey School of Business at Arizona State University.

Located on the Navajo Nation, near Page, NGS is one of the largest suppliers of electricity in the Southwest. Despite its economic importance, a number of significant challenges threaten the future viability of NGS.

The plant’s lease and various rights of way with the Navajo Nation are set to expire around 2019 and the NGS owners are currently negotiating extensions. In addition, the plant’s owners are also renegotiating the coal supply contract with Peabody Energy. Potential additional and costly environmental rules from the U.S. Environmental Protection Agency could also force the plant to shut down prematurely.

According to the ASU report, Navajo Generating Station and Kayenta Mine: An Economic Impact Study, the closure of NGS — combined with the potential impact on nearby Kayenta Mine, the plant’s coal supplier — could result in an annual loss of nearly 3,400 jobs and more than $602 million in adjusted state tax revenues for a period measured from 2017 to 2044.

The ASU report examined the economic impact of NGS and Kayenta Mine using the same REMI model employed by the state of Arizona to examine economic projections. The study concluded that NGS will provide more than $20 billion in economic contributions throughout the state for the period measured from 2011 to 2044. A full copy of the report is available at www.ngspower.com.

NGS is a coal-fired power plant that provides electricity to customers in Arizona, Nevada and California, and energy to pump water through the Central Arizona Project.

• Briefs compiled from staff and wire reports

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