Arizona Aqueduct Not Required to Buy Coal Power, U.S. Agency Says

By Stephen Lee

One of the nation’s biggest aqueduct systems isn’t legally required to keep buying power from the biggest coal-fired power plant in the West, the Congressional Research Service concluded.

The long-awaited report is yet another ominous sign for the Navajo Generating Station in Page, Ariz., because the Central Arizona Project is the plant’s biggest customer. The 2,250-megawatt generating station is scheduled to close at the end of 2019 unless a new buyer steps forward immediately.

The Oct. 24 report also directly contradicts the Trump administration’s conclusion in June, when it said it believes the Central Arizona Project is legally required to buy power from the generating station until the plant’s $1.1 billion debt is paid off. That is expected to take decades.

In its report, the Congressional Research Service concluded that a 1969 agreement under which the Central Arizona Project would buy Navajo Generating Station power will expire at the end of 2019. After that time, the aqueduct system is free of any further obligation, according to the research service, a legislative branch agency that provides analysis to Congress.

The Central Arizona Project repeatedly said it wants to move away from the Navajo Generating Station. In June, its board members voted unanimously to initiate binding contracts with solar energy providers. The aqueduct needs electricity to pump water from the Colorado River to bone-dry central and southern Arizona, including Phoenix and Tucson.

Rep. Paul Gosar (R-Ariz.) has been considering draft legislation to force the Central Arizona Project to remain a customer of the generating station. The bill hasn’t been introduced, however.

Possible Buyer?

Separately, Navajo Nation Speaker LoRenzo Bates said last week that the tribe has begun exploring the possibility of buying the coal-fired power plant.

Scott Harelson, a spokesman for the Salt River Project, the plant’s current majority owner, told Bloomberg Environment that “there have been no other suitors.”

Middle River Power LLC walked away from talks to buy the plant Sept. 20, largely on the basis that it didn’t believe the plant had enough customers. The Salt River Project declined to renew its lease when it runs out in December 2019.