FOR IMMEDIATE RELEASE:
Monday, March 25, 2024
CONTACT:
- Nicole Horseherder, Tó Nizhóní Ání, [email protected], 928-675-1851
- Chanele Reyes, Arizona Center for Law in the Public Interest, [email protected], 602-258-8850
Groups representing coal-impacted communities ask ACC to follow through on the agency’s public duty to provide a coal transition framework
Despite years of acknowledging the need to help those impacted by early coal plant closures, Commissioners continue to turn their backs on rural and tribal communities
PHOENIX – A coalition of groups that has been urging the Arizona Corporation Commission to provide resources and financial support to communities that are harmed economically by the premature closure of coal-fired power plants has formally asked the ACC to reconsider its recent decision denying more than a hundred million dollars in much-needed assistance.
The Commission voted 4-to-1 on Feb. 22 to reject any ratepayer-backed funding to assist communities on the Navajo Nation and Hopi reservation and in places like Holbook and Joseph City, all of which already are or soon will be feeling the economic disruptions that come when coal plants shut down far earlier than planned.
Navajo Generating Station (NGS), once the largest coal plant in the West, closed in 2019, more than two decades early. As a result, the Navajo Nation and Hopi Tribe lost out on upward of $50 million annually in coal royalties and lease payments, or at least half a billion dollars had the plant operated as planned into the 2040s. Likewise, the Cholla Power Plant in Navajo County is shutting down next year, which according to official testimony, will cost the Joseph City Unified School District alone around $20 million in lost property taxes over the next decade.
Arizona Public Service, which was a part-owner in NGS and owns and operates Cholla, proposed a coal-community transition (CCT) plan that would have provided $106.5 million to communities near the two plants, a proposal that would have cost ratepayers a few pennies on the dollar extra on their monthly bills. Polling has shown widespread public support for the idea of funding impacted coal communities to help them get through the initial shock of lost jobs and tax revenue and then the longer term prospect of reinventing their economies.
The Commission, however, has opted to ignore the plight of these communities and instead ruled that they cannot burden utility customers, even with such a minimal impact, without having a policy framework to help determine exactly how much support a utility is responsible for providing.
This, say the groups in their petition to the ACC, is a circular excuse because it’s the Commission’s public duty to establish such a framework, but after more than five years, they still haven’t bothered to do so.
“It’s extremely frustrating because the Commission keeps finding that utilities have a corporate responsibility to provide transition funding, then they throw up their hands like they’re powerless and say there’s nothing they can do because there’s no policy to guide them,” says Nicole Horseherder, whose Navajo organization, Tó Nizhóní Ání, has been intervening in utility rate cases since 2018 to argue for CCT support. “But they’re the ones who make the policy. They’re using their own failure to act in the public interest as an excuse for doing nothing, and that’s a huge dereliction of public duty.”
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 jointly in the APS proceeding to push the Commission to authorize funding from coal communities. The Commission has issued a number of rulings and made formal statements both acknowledging the need for coal community assistance and recognizing its ability to provide it through utility rates (see below for previous Commission statements on coal-community transition).
“There’s this litany of pronouncements from the Commission about how important it is to lend coal communities a helping hand as they face the disruption of having their economic foundations shaken, but then they keep neglecting to do anything about it,” says Chanele Reyes, the attorney for the Arizona Center for Law in the Public Interest who represented the groups in the APS rate case. “This is why we’re asking the Commission to reconsider its decision. It’s time to stop kicking the transition can down the road and uphold their duty to the public by adopting a policy for how they will address coal-community transition in future decisions.”
The issue is not going to go away simply because the Commission fails to address it. There are four coal-fired power plants still operating in Arizona, all of which will likely be closed – earlier than expected – within the next decade, including the Cholla plant, which will shut down next year.
###
- “Staff supports a just plan for transition to assist communities dependent on coal.” – Utilities Division brief in Docket No. E-01345A-16-0036. Sept. 24, 2018.
- “[G]iven recent events surrounding the closure of NGS … we believe that it is reasonable to require APS to begin establishing a transition plan for Four Corners and the impacted communities. Accordingly, APS should file as part of its next rate case a proposed initial transition plan for Commission consideration.” – Recommended Opinion and Order in Docket No. E-01345A-16-0036. Nov. 27, 2018.
- In its decision on funding energy efficiency programs for APS, the Commission ruled that “as part of its corporate obligations to support a just and equitable transition of communities impacted by early power plant closure” the utility was required to provide efficiency-related funding to the Navajo Nation and Hopi Tribe. – ACC Decision No. 77763. Oct. 2, 2020.
- “[A]ction must be taken, and soon, to mitigate the negative impacts of plant closures on tribal lands and elsewhere.” – ACC Decision No. 77856. Dec. 31, 2020.
- “The Commission has determined that APS has a corporate obligation to support a just and equitable transition away from coal-based economies for communities impacted by early power plant closures. … In light of the negative externalities that have impacted these communities, and the economic devastation that has come or is coming with closure of the coal-fired plants, it is just and reasonable for APS customers and shareholders to share the burden of transition assistance costs.” – ACC Decision No. 78317. Nov. 8, 2021.
- “[T]he Commission has determined and continues to believe that it has the legal authority, under Arizona Constitution, Article 15, §3, to require ratepayer funding of CCT assistance.” – ACC Decision No. 79293. March 5, 2024.
