Biggest coal-burning power plant in the West is most likely shutting down

The biggest coal-burning power plant in the West is fighting for survival — and despite support from the Trump administration and Republicans in Congress, it appears likely to close next year.

The Navajo Generating Station in northern Arizona is a centerpiece of the economy on the largest Native American reservation in the country, providing hundreds of jobs. But the power plant is also struggling to stay open as local utilities that use its power turn to cheaper, greener energy sources, and it would need a new owner if it's to continue operating.

With the search for an owner stalled and time running short before the plant's current operating deal expires in December 2019, a crucial tribal leader has joined a chorus of those saying the plant is unlikely to survive.

"Right now all the indicators are this plant is going to shut down. It's going to be decommissioned," Russell Begaye, president of the Navajo Nation, said in an interview.

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A Caterpillar Inc. front loader scoops coal from a mound at the Arch Coal Inc. Sentinel Prep Plant in Philippi, West Virginia, U.S., on Wednesday, Jan. 13, 2016. Arch, the St. Louis-based holder of the second-largest reserve of coal in the U.S., filed for creditor protection Monday, with an agreement to erase $4.5 billion in debt. Photographer: Luke Sharrett/Bloomberg via Getty Images
Coaling towers stand at the Arch Coal Inc. Sentinel Prep Plant in Philippi, West Virginia, U.S., on Wednesday, Jan. 13, 2016. Arch, the St. Louis-based holder of the second-largest reserve of coal in the U.S., filed for creditor protection Monday, with an agreement to erase $4.5 billion in debt. Photographer: Luke Sharrett/Bloomberg via Getty Images
A truck waits to be loaded with coal at the Arch Coal Inc. Sentinel Prep Plant in Philippi, West Virginia, U.S., on Wednesday, Jan. 13, 2016. Arch, the St. Louis-based holder of the second-largest reserve of coal in the U.S., filed for creditor protection Monday, with an agreement to erase $4.5 billion in debt. Photographer: Luke Sharrett/Bloomberg via Getty Images
Coal spills out from a tower into a large pile at an Alpha Natural Resources Inc. coal preparation plant in Logan County near Yolyn, West Virginia, U.S., on Wednesday, Aug. 5, 2015. Alpha Natural Resources Inc. filed for bankruptcy in Virginia last week, becoming the latest victim of the coal industrys worst downturn in decades. Photographer: Luke Sharrett/Bloomberg via Getty Images
Coal spills out from a tower into a large pile at an Alpha Natural Resources Inc. coal preparation plant in Logan County near Yolyn, West Virginia, U.S., on Wednesday, Aug. 5, 2015. Alpha Natural Resources Inc. filed for bankruptcy in Virginia last week, becoming the latest victim of the coal industrys worst downturn in decades. Photographer: Luke Sharrett/Bloomberg via Getty Images
Coal sits in a pile at an Alpha Natural Resources Inc. coal preparation plant in Logan County near Yolyn, West Virginia, U.S., on Wednesday, Aug. 5, 2015. Alpha Natural Resources Inc. filed for bankruptcy in Virginia last week, becoming the latest victim of the coal industrys worst downturn in decades. Photographer: Luke Sharrett/Bloomberg via Getty Images
Signage stands outside an Alpha Natural Resources Inc. coal preparation plant in Logan County near Yolyn, West Virginia, U.S., on Wednesday, Aug. 5, 2015. Alpha Natural Resources Inc. filed for bankruptcy in Virginia last week, becoming the latest victim of the coal industrys worst downturn in decades. Photographer: Luke Sharrett/Bloomberg via Getty Images
PRINTER, KY - JUNE 3: CSX Transportation coal trains sit in a rail yard on June 3, 2014 in Printer, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
CATTLETSBURG, KY - JUNE 3: Caterpillar front-loading machinery operates on mounds of coal at Arch Coal Terminals June 3, 2014 in Cattletsburg, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
SHELBIANA, KY - JUNE 3: A bulldozer operates atop a coal mound at the CCI Energy Slones Branch Terminal June 3, 2014 in Shelbiana, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
CATTLETSBURG, KY - JUNE 3: A tractor trailer drives by a mound of coal after delivering a truckload of coal to Arch Coal Terminals June 3, 2014 in Cattletsburg, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
PRINTER, KY - JUNE 3: A road leads past a coal train sitting alongside the Blackhawk Mining, LLC Spurlock Prep Plant on June 3, 2014 in Printer, Kentucky. New regulations on carbon emissions proposed by the Obama administration have reportedly angered politicians on both sides of the aisle in energy-producing states such as Kentucky and West Virginia. (Photo by Luke Sharrett/Getty Images)
Coal is dropped from a conveyer belt into a pile at the Wildcat Coal Load-Out Terminal, owned by Intermountain Power Agency outside Price, Utah Wednesday, March 5, 2014. The facility receives coal via trucks from the local mines and transfers it to call cars on trains for transport to power generation facilities. Photographer:George Frey/Bloomberg via Getty Images News
Coal is transported by rail after being loaded at the Wildcat Coal Load-Out Terminal, owned by Intermountain Power Agency, outside Price, Utah, U.S., on Wednesday, March 5, 2014. The facility receives coal via trucks from the local mines and transfers it to railcars for transport to power generation facilities. Photographer: George Frey/Bloomberg via Getty Images
A Caterpillar earth mover moves piles of coal at the Wildcat Coal Load-Out Terminal, owned by Intermountain Power Agency, outside Price, Utah, U.S., on Wednesday, March 5, 2014. The facility receives coal via trucks from the local mines and transfers it to railcars for transport to power generation facilities. Photographer: George Frey/Bloomberg via Getty Images
A Caterpillar earth mover moves piles of coal at the Wildcat Coal Load-Out Terminal, owned by Intermountain Power Agency, outside Price, Utah, U.S., on Wednesday, March 5, 2014. The facility receives coal via trucks from the local mines and transfers it to railcars for transport to power generation facilities. Photographer: George Frey/Bloomberg via Getty Images
Loaded Norfolk Southern coal trains sit before being unloaded at Lambert's Point Coal Terminal in Norfolk, Virginia, U.S., on Tuesday, Nov. 26, 2013. In 2011, coal was used to generate 30.3 percent of the world's primary energy, the highest level since 1969, according to the World Coal Association, an industry trade group. That share slipped only to 29.9 percent last year. Photographer: Luke Sharrett/Bloomberg via Getty Images
The Kentucky Mine Supply Company building stands in Harlan, Kentucky, U.S., on Tuesday, Nov. 5, 2013. In 2011, coal was used to generate 30.3 percent of the world's primary energy, the highest level since 1969, according to the World Coal Association, an industry trade group. That share slipped only to 29.9 percent last year. Photographer: Luke Sharett/Bloomberg via Getty Images
A CSX Corp. coal hopper car sits beside a Harlan County coal tipple in Totz, Kentucky, U.S., on Wednesday, Nov. 6, 2013. In 2011, coal was used to generate 30.3 percent of the world's primary energy, the highest level since 1969, according to the World Coal Association, an industry trade group. That share slipped only to 29.9 percent last year. Photographer: Luke Sharett/Bloomberg via Getty Images
Deckhands aboard the Consol Energy Champion Coal tow boat walk along the center of the barges on the Monongahela River, during transport outside Pittsburgh, Pennsylvania, U.S., on Wednesday, May 15, 2013. Coalâs prospects are improving after its share of U.S. power generation fell last year to 34 percent, the lowest since at least 1973, Energy Department data show. Hotter temperatures this summer that prompt American households to use more air conditioning will boost demand for coal and the railroads that ship it. Photographer: Ty Wright/Bloomberg via Getty Images
Coal sits inside a barge during transport down the Monongahela River by the Consol Energy Champion Coal tow boat outside Pittsburgh, Pennsylvania, U.S, on Wednesday, May 15, 2013. Coalâs prospects are improving after its share of U.S. power generation fell last year to 34 percent, the lowest since at least 1973, Energy Department data show. Hotter temperatures this summer that prompt American households to use more air conditioning will boost demand for coal and the railroads that ship it. Photographer: Ty Wright/Bloomberg via Getty Images
A coal miner shines his head lamp on coal transported on a conveyor belt after being sheared off the wall during longwall mining operations at the Consol Energy Bailey Mine in Wind Ridge, Pennsylvania, U.S., on Tuesday, May 14, 2013. Coalâs prospects are improving after its share of U.S. power generation fell last year to 34 percent, the lowest since at least 1973, Energy Department data show. Hotter temperatures this summer that prompt American households to use more air conditioning will boost demand for coal and the railroads that ship it. Photographer: Ty Wright/Bloomberg via Getty Images
Coal miners walk through a tunnel at the Consol Energy Bailey Mine in Wind Ridge, Pennsylvania, U.S., on Tuesday, May 14, 2013. Coalâs prospects are improving after its share of U.S. power generation fell last year to 34 percent, the lowest since at least 1973, Energy Department data show. Hotter temperatures this summer that prompt American households to use more air conditioning will boost demand for coal and the railroads that ship it. Photographer: Ty Wright/Bloomberg via Getty Images
A coal miner stands in a crevice to avoid a transport car at the Consol Energy Bailey Mine in Wind Ridge, Pennsylvania, U.S., on Tuesday, May 14, 2013. Coalâs prospects are improving after its share of U.S. power generation fell last year to 34 percent, the lowest since at least 1973, Energy Department data show. Hotter temperatures this summer that prompt American households to use more air conditioning will boost demand for coal and the railroads that ship it. Photographer: Ty Wright/Bloomberg via Getty Images
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The Navajo Generating Station has polluted the skies over the reservation for decades, but it's also been key to the financial well-being of the Navajo and neighboring Hopi tribes. The two tribes share in the royalties from the Kayenta coal mine, which supplies the power plant, and also faces closure. The Navajo government gets 22 percent of its revenue from the operation, while the Hopi's budget is more than 85 percent dependent on coal power. The power plant and the mine also provide 725 jobs, most of them filled by Navajos.

The fate of the power plant is an important test case of President Donald Trump's promise to preserve coal jobs.

Peabody Energy, the biggest coal miner in the U.S., and its investment banking firm, Lazard, are leading the fight to keep the Navajo Generating Station open. Peabody, which runs the Kayenta mine, has been working with Trump's Interior Department to try to find utilities or other customers to take the plant's power, agreements that would make the plant more attractive to a new owner. The Environmental Protection Agency has helped out, too, agreeing to accept a less expensive plan for controlling emissions from the plant, according to a Lazard representative.

The White House did not immediately respond to a request for comment.

The 44-year-old power plant, which helps light the Southwest and powers the pumps that send Colorado River water to Tucson and Phoenix, has been the most heavily polluting coal-fired electricity producer in the West. The Sierra Club and other environmental groups have been pushing to close it.

Begaye's comments were noteworthy, first because he had previously spoken with more optimism about keeping the generating station open and second because his remarks broke from the "unified voice" that coal mine representatives have said is needed in their campaign to prolong the life of the power plant.

Begaye says he believes Peabody's efforts and the federal government's assistance won't be enough to reverse the market forces pushing utilities away from coal. He has criticized the Trump administration for failing to do more to save the Navajo Generating Station, saying in an interview with NBC News last year that the administration had created "a lot of thunder, no rain" in their support of the power plant and coal mine. In his more recent remarks, Begaye added that potential operators of the power plant "are not buying what is being said from the White House."

The tribal leader also flatly rejected another idea designed to make NGS power cheaper and thus more attractive to potential new owners: lowering the royalties that Peabody pays to the Navajo and Hopi for their coal. Begaye said his tribe has been asked too many times in the past to make concessions that allow outsiders to tap its rich natural resources.

Coal-generated electricity has been in retreat around America, as hydraulic fracturing (or "fracking") has lowered the price of natural gas and as utilities increasingly turn to renewable power sources. Doubts about the future of NGS have grown because Peabody has not been able to deliver on its pledge, made six months ago, to line up a new power plant operator by the end of the first quarter of 2018. That date passed last week, without a successor being named.

Peabody, though, says it is still confident about finding a new owner for the power plant. "We are encouraged by the progress Lazard is making to support the transition of the plant to new owners and will continue working with stakeholders to advance all possible steps to keep the plant online well beyond 2019," the mining company said in a statement.

One reason Lazard and Peabody are hopeful is because of their political allies. They predicted that Arizona state regulators will require that state utilities planning to abandon the coal plant keep getting electricity there. There's no indication that will happen anytime soon. But the arguments in favor of the plant's survival will be heard in Washington this week. On Thursday, the House Natural Resources Subcommittee on Energy and Mineral Resources will hold a hearing on the benefits of the 2,250-megawatt Navajo Generating Station.

Begaye, though, believes the Navajo's dependence on industries like coal will ultimately come to an end. "We will make a shift away from natural resource dependency," said Begaye, noting the tribe hopes to turn to technology instead. "We are in a very exciting time for [the] Navajo."

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