FOR IMMEDIATE RELEASE:
Thursday, Feb. 22, 2024
CONTACT:
- Nicole Horseherder, Tó Nizhóní Ání, [email protected], 928-675-1851
- Mike Eisenfeld, San Juan Citizens Alliance, [email protected], 505-360-8994
- Chanele Reyes, Arizona Center for Law in the Public Interest, [email protected], 602-258-8850
ACC turns its back on rural and tribal communities in Arizona that are
reeling economically from early coal plant closures
PHOENIX – Despite repeatedly recognizing the responsibility that electric utilities have for providing assistance to communities harmed by the early closure of coal plants they own and operate, the Arizona Corporation Commission on Thursday denied any funding to support the Navajo Nation, Hopi Tribe, Joseph City Unified School District and Navajo County.
These communities are all dealing with the significant economic disruption of decisions by Arizona Public Service to close down coal-fired power plants years earlier than initially planned. To its credit, APS has proposed a coal community transition (CCT) package that totals nearly $150 million in assistance to the Navajo Nation, Hopi and Navajo County. The aid, however, requires approval from the ACC for any funding that falls on ratepayers.
In APS’s last rate case, the Commission approved CCT funding of around one-tenth the amount APS has proposed. The entities below jointly intervened in this rate case to request that the Commission approve the remainder of that funding, and to also provide additional CCT support for the Hopi Tribe and Joseph City.
“It’s extremely disappointing that we finally have a utility stepping up to support communities where it is closing down coal plants, and now politicians are getting in the way and forcing these communities to endure even more economic hardship,” said Nicole Horseherder, executive director the Navajo grassroots community group Tó Nizhóní Ání. “We have given the Commission everything they need to determine what transition aid looks like. But in the end, they have shown they firmly believe they have no obligation to communities that bore the cost of producing Arizona’s power.”
Along with Tó Nizhóní Ání, New Mexico-based San Juan Citizens Alliance, Navajo organization Diné C.A.R.E. and Hopi grassroots organization Black Mesa Trust, intervened in the proceeding to push for CCT funding from APS.
Navajo Generating Station, the largest coal-fired power plant in the West, was retired in 2019, more than two decades earlier than it was supposed to, after the owners, including APS, decided it was no longer economical to operate. In the wake of the abrupt closure, the Navajo Nation and the Hopi Tribe collectively have experienced cuts of hundreds of millions of dollars in tax revenue and coal royalties that they expected to continue flowing into the 2040s, not to mention the loss of nearly a thousand high-paying jobs.
The coal-fired Cholla Power Plant, owned and operated by APS, is scheduled to close down in less than two years, which according to testimony by the Joseph City Unified School District, will leave it with a funding shortfall of more than $20 million in the decade after the plant shuts down.
“The Commission has recognized in previous rulings that utilities have a corporate responsibility to provide support to communities when plants are closed down early, so it’s hard to understand why they’ve now decided to turn their backs on them. These communities have fueled Arizona’s growth and prosperity. They are extremely vulnerable, and now the Commission is saying it’s OK to let them fall off an economic cliff,” said Chanele Reyes, an attorney at Arizona Center for Law in the Public Interest, who represented the groups in the APS proceeding.
As proposed by APS in its CCT package, the utility would have provided: $100 million in direct financial support to the Navajo Nation, $12 million to Navajo County communities, and $3.7 million to the Hopi Tribe. Additionally, APS committed to paying: $2.5 million a year in transmission revenue sharing with the Navajo Nation, for a minimum of $17.5 million; an agreement to extend electric service free of charge to any Navajo households within 4,000 feet of an APS distribution line; $250,000 a year for five years for Navajo Nation economic development around Four Corners Power Plant; $10 million to help electrify homes and buildings on the Navajo Nation; and a commitment to buying power from 600 MW of renewable energy projects to be built on the Navajo Nation.
Commissioner Anna Tovar proposed an amendment that would have gone beyond APS’s CCT package: increasing funding for the Joseph City Unified School District to $20 million payable over 10 years plus $5.4 million payable to other Navajo County communities over three years; increasing the amount paid to the Hopi Tribe to $38.9 million over 10 years; and boosting the requirement for APS to site replacement clean energy projects near communities impacted by plant closures by an additional 350 megawatts.
The Commission voted 4-1 to kill Commissioner Tovar’s amendment, and in the end voted by the same margin to reject any CCT funding to coal-impacted communities, with Chairman Jim O’Connor, Commissioners Lea Márquez Peterson, Nick Myers and Kevin Thompson denying the funding.
“It’s not like this issue is going to go away,” said Mike Eisenfeld of San Juan Citizens Alliance, who is based in Farmington, N.M., where APS’s Four Corners Power Plant is located. “The Cholla plant is shutting down in less than two years, and then the Four Corners, Coronado and Springerville plants will all be retired within the decade – all years earlier than planned. The Commission can’t keep pretending it doesn’t have an obligation to support our communities. It’s in the public interest to assist communities that have sacrificed so much in rebuilding our economies, and that makes it the Commission’s duty.”
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