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Navajo president OKs lease for coal power plant

Felicia Fonseca, Associated Press

FLAGSTAFF, Ariz. (AP) -- The Navajo Nation's approval of a lease extension for a coal-fired power plant on the reservation came after hours of contentious debate and a slew of amendments. Now, the owners of the Navajo Generating Station must decide whether they can agree to the changes.

The legislation signed by tribal President Ben Shelly on Tuesday extends the lease from 2019 to 2044 and boosts yearly payments to the tribe from $3 million to $43 million. It also provides money for scholarships and gives the Navajo Nation a shot at partial ownership of the power plant near Page.

Arizona lawmakers on Monday tacked on more than a dozen amendments to the lease and accompanying legislation. Among them was the reinstatement of a $1 million signing bonus, a requirement that the power plant owners control fly ash — a byproduct of burning coal that's not currently regulated by the federal government— and give Navajos preference in employment so long as it's permitted by federal law.

One of the more highly debated amendments dealt with water from the upper Colorado River basin. Salt River Project, which operates the plant on behalf of the owners, has said it uses water from a 50,000 acre-foot allocation for Arizona to run the plant. But the Navajo Nation wants assurances from the owners of NGS that they won't hinder or oppose any claim the tribe would make to that water or a higher amount.

SRP delivers water to more than 2.5 million people in central Arizona, including large parts of metropolitan Phoenix, and has aggressively fought for water supplies in other parts of the state. Spokesman Scott Harelson said Tuesday that without knowing how much water the Navajo Nation could claim, the amendment is one "we would have deep concern with."

Tribal lawmaker Dwight Witherspoon, the sole nay vote on the lease extension, said he took issue with the Navajo Nation not including a hiring preference specifically for Navajos and not being able to sell the water for use at NGS should the tribe successfully obtain the rights to it.

"Just on principle, I couldn't on good conscience approve it," he said in an interview.

The Navajo Nation also wants to add the U.S. Bureau of Reclamation as a signatory on the lease. But agency spokeswoman Rose Davis said the bureau owns a share of the power generation, not the power plant itself. "To add us in an amendment to being a lessee isn't really legally valid," she said.

Monday was the third time this year that the lawmakers had taken up the agreement to extend the lease. It initially was ruled out of order because the negotiating team didn't include any tribal lawmakers as required by a section of Navajo law. The lawmakers met with the owners of NGS after the agreement was tabled earlier this month to discuss potential amendments.

Tulley Haswood, a former NGS worker, said he and others were hopeful lawmakers would again delay a vote on the lease to more fully explore water issues. But he viewed the amendments as an essential tabling of the measure that would force both sides back into negotiation.

"It's going to be a pretty heavy duty struggle on both sides to stand their ground," he said.

Shelly said the tribe's approval signals an understanding of the role the power plant plays in the economy of the region and on the reservation. The power plant and associated mine make up a large chunk of the Navajo Nation's budget, and the power generated sends water through a series of canals to Arizona's most populated areas.

The U.S. Department of the Interior will conduct an environmental review of the power plant once the owners and the tribe reach a final agreement.

Tribal lawmaker LoRenzo Bates said he doesn't see any reason for the latest version to be rejected.

"I don't see any deal killers there," he said. "Now they may have questions as to the language that applies to an amendment. That's when our attorneys are able to come in and explain the language."