Tuesday
June 20, 2006

Mohave closure now permanent
SCE won't reopen generating station

By Kathy Helms
Diné Bureau

WINDOW ROCK — Southern California Edison said Monday that it has "reluctantly decided" not to go forward with its efforts to reopen Mohave Generating Station in Laughlin, Nev., which is fueled by slurried coal from Peabody Western Energy Co.'s Black Mesa Mine.

"This decision was not based on any one factor, but resulted from a number of significant challenges that, when taken together, became insurmountable," SCE said in a statement released by Gil Alexander of SCE corporate communications.

"After discussing this decision with our co-owners, all have agreed to jointly develop a plan for the plant's future," the statement said.

SCE said that although much progress had been made, many unresolved issues remain. Following a comprehensive reassessment of the issues and the likelihood of the project's ultimate success, SCE announced Mohave's closure.

"We believe everything reasonably possible was done to return Mohave to service. And we would like to acknowledge the efforts of the many participants in this five-year effort our co-owners, local, state, and federal officials, the tribes, plant suppliers, and especially our
employees who worked hard to sustain the service of this important resource," SCE said.

Mohave currently is owned 56 percent (885 megawatts) by SCE, which is also the operator. Salt River Project, which operates Navajo Generating Station, owns 20 percent (316 MW); Nevada Power Co., 14 percent (221 MW); and Los Angeles Department of Water and Power, 10 percent (158 MW).

Beth Sutton, communications director for Peabody Energy Co., said, "Peabody will continue to explore coal-related projects that would allow Black Mesa to resume operations, which would greatly benefit the local economy and tribal members."

The Black Mesa Mine was idled in December, as expected, in conjunction with the shutdown of Mohave, Sutton said. "The Kayenta Mine is unaffected, as it fuels the Navajo Generating Station."

Statements from Navajo Nation President Joe Shirley Jr., who was in Washington, D.C. Monday, and Hopi Tribal Chairman Ivan Sidney were unavailable at press time.

Nevada Power Co., a wholly owned subsidiary of Sierra Pacific Resources, said it had been notified by SCE of Mohave's closure and that it will no longer participate in efforts to return the plant to service.

Roberto Denis, senior vice president of energy supply for Sierra Pacific, said, "Our position for many months has been that we would favor restarting Mohave facility only on the condition that proper environmental requirements can be met at costs that make economic sense.

"After many extensive discussions with all parties concerned, it has become clear to us that the economic conditions most certainly cannot be resolved any time in the foreseeable future. In the best interests of the customers we serve as well as our company and its shareholders, we therefore have made this decision to end our participation."

No victory dances

Mohave closed Dec. 31, 2005, as a result of a court decision between the plant's owners, Sierra Club, Grand Canyon Trust, and the National Parks Conservation Association over Mohave's Clean Air Act violations.

Roger Clark of Grand Canyon Trust said, "This has been a long struggle that goes back to the deals Peabody made to get the coal, to get the water way back when. So, anyone that's been around this business a while knows that there are no victory dances. There are just episodes in a long struggle to turn this thing around.

"My enthusiasm is tempered by the fact that I'm not happy that people are out of work," he said. "I'm not happy that Southern California Edison, and these utilities that made constant money off of this operation, have left very little behind in the way of permanent
investment to the people whose resources they used to make a lot of people in Southern California a lot of money."

The lawsuit regarding the operation of Mohave was settled with a court-ordered consent decree in 1999, according to Clark. "The owners complied with that. They had the option of either putting in pollution controls or shutting down, and really, that decision was pre-empted by the inability to get an agreement on coal supply.

"Nobody's going to commit to putting a half-million-dollars worth of scrubbers and pollution controls on a plant that has no assurance of coal. And that's where the thing broke down," he said.

New era

Enei Begaye of the Indigenous Environmental Network, said, "With thousands of tribal dollars gone to waste on negotiations with Southern California Edison, the permanent closure of the Mohave Generating Station presents a great opportunity for both the Navajo and Hopi tribes to rebuild."

Begaye said California energy regulators recently approved a request by the Just Transition Coalition to track and accumulate revenues from the sales of sulfur credits from SCE for possible future distribution to the tribes.

The Just Transition Coalition is made up of Black Mesa Water Coalition, Grand Canyon Trust, Indigenous Environmental Network, Sierra Club, and To' Nizhoni Ani.

In a May 11 decision, CPUC voted, 4-0, that any revenue from the sale of sulfur credits by SCE which could amount to more than $20 million a year will be recorded and accumulated in a SCE regulatory account, as requested by the Just Transition Coalition.

According to the decision, once a final determination has been made on the operating status, CPUC will consider proposals as to how the accumulated funds will be disbursed. Such proposals can include the coalition's recommendation for distribution of these funds to the Hopi and Navajo tribes.

Peabody recently presented the Navajo Nation and the Hopi Tribe with $11.5 million and $11 million, respectively, as a bonus payment for having mined more than 200 million tons of coal from Black Mesa and Kayenta mines over the last 40 years.

Just Transition members are hopeful that money raised by SCE under a cap-and-trade policy instituted by the U.S. Environmental Protection Agency will be used by Navajo and Hopi tribal communities for sustainable economic development.

Just Transition said this includes the production of renewable energy such as wind and solar plants on tribal lands. The plan also would benefit California by helping it meet its renewable energy portfolio standards.

"Just Transition is a way to bring the Navajo and Hopi people a long-term sustainable and healthy economy. Now is the time for our tribal leaders to put aside secret negotiations and join the people in building a new and clean start," Begaye said.

Wahleah Johns of Black Mesa Water Coalition, said, "The Mohave plant represents the past, but renewable energy proposed through the Just Transition plan represents the future, a future built on clean renewable energy for California and long-term jobs for the Navajo and Hopi people.

"I don't understand why our tribal lawyers have been so hesitant to support wind and solar through the Just Transition plan," she said.

Andy Bessler, Southwest representative for Sierra Club, said the announcement "signals the end of an era and signals a new era for wind and solar energy."

Bessler said SCE must submit a plan to CPUC by Jan. 1, 2007, on how it will release the funds.

"Through that venue we can bring up the Just Transition plan and hopefully work with Southern California Edison, because they could become investment partners with the tribes on renewable energy development. This doesn't have to be an either/or. It can be a win/win."

But, Bessler said, "What's really tragic is the tribal leaders put all their eggs into one basket with this negotiated settlement. What's their plan now?"

The other big question, he said, is what's going to happen with the C-aquifer Environmental Impact Statement.

The EIS is to be released in July. However, Bessler said when they talked with Bureau of Reclamation last week regarding the status of the EIS, and asked what might happen if Mohave were to shut down permanently, "They said that they would consider shutting down the EIS process. It's pretty much a moot point at this point," he said.

The C-aquifer project is designed to replace Peabody's reliance on
N-aquifer water to slurry coal to Mohave.
http://www.gallupindependent.com/2006/jun/062006mhvclsr.html

For Immediate Release:
January 11, 2006

Contact: Information for the Just Transition Coalition:

TRIBAL, CONSERVATION GROUPS SEEK 'JUST TRANSITION'
AFTER MOHAVE POWER PLANT CLOSURE

Ask CA PUC, Utility to Reinvest Pollution Credit Windfall in Local Jobs, Clean Technologies

San Francisco, CA - A motion filed today by the "Just Transition Coalition" with the California Public Utilities Commission stated that "Southern California Edison’s unilateral decision to close Mohave Generating Station on December 31 requires the Commission to immediately grant a motion to set aside funds to address economic consequences of the closure on Hopi and Navajo people."  In what would be a first for the state and the nation, they are asking the commission to ensure that the utility make up for a history of pollution violations by reinvesting any profits from the sale of pollution credits into clean, renewable energy projects to serve the region's energy needs and create local jobs.

Navajo and Hopi people stand to lose nearly $20 million in royalties from the sale of coal from Black Mesa Mine, which supplies the 1,585 megawatt plant in Laughlin, Nevada. Mohave Generating Station has generated inexpensive electricity for California ratepayers since 1971. The mine is Mohave’s sole source of coal, and 200, mostly Navajo workers, will lose their jobs as the result of Southern California Edison’s (SCE) decision to close the plant.

The motion, filed with the CPUC, seeks funding from SCE’s sale of approximately $40 million per year in pollution credits. The transaction between utilities is allowed under acid rain provisions of the Clean Air Act.

"It’s wrong to allow SCE to reap hundreds of millions of dollars in new, unearned revenues from the sale of sulfur allowances. SCE has not invested one cent in pollution controls or paid a penny in fines for its many years of polluting our region. The Just Transition Plan will redistribute money from the sale of sulfur allowances to Navajo and Hopi people in return for economic losses that we will suffer. Millions of people have benefited from Mohave, now it’s our turn." said Leonard Selestewa.

The Black Mesa Just Transition plan is in the best interest of everyone involved, it would provide sustainable economic development for the Hopi and Navajo people as well as a clean source of renewable energy for California rate payers." said Enei Begaye of the Indigenous Environmental Network. She added "The Just Transition Plan provides economic restitution for Navajo and Hopi people based on a tariff charge that is directly tied to the plant’s closure. Our motion is designed to help Navajo and Hopi communities become equity owners in producing new sources of cleaner energy. It will allow us to reduce unemployment and help promote a just transition to sustainable economic development."

Nicole Horseherder, who is a resident of Black Mesa, commented: "Our coal generates the electricity for millions of people in California, Nevada and Arizona. The Navajo Nation does not receive a single kilowatt of electricity from Mohave Generating Station. Further, the Diné people on Black Mesa do not receive even one percent of the royalties that are paid to the Navajo Nation from coal and water sales. For more than 30 years we have been the source of cheap coal, water, and electricity. We have kept costs down and profits high for both Peabody Coal Company and the owners of Mohave Generating Station."

Added Robert Tohe, Environmental Justice Organizer for the Sierra Club, "Reinvesting the Mohave's pollution profits into the affected communities and a cleaner energy future makes all the sense in the world. It would be a win for the tribes, the people of California, and the environment."

For a copy of the motion and a photo of the tribal and conservation leaders at the California Public Utilities Commission, contact Eric Antebi
415-977-5747 or eric.antebi@sierraclub.org.

Groups want closure proceeds invested in renewable energy

By TERENCE CHEA
Associated Press Writer
01/12/2006

SAN FRANCISCO -- Tribal leaders and environmental groups on Wednesday asked California energy regulators to take sale proceeds from the closure of a Nevada power plant and reinvest them in renewable energy projects.

Leaders of the Navajo and Hopi tribes in Arizona, along with representatives of the San Francisco-based Sierra Club and other environmental groups, filed the petition with the California Public Utilities Commission.

On Dec. 1, operators of the Mohave Generating Station near Laughlin, Nev., closed the 1,580-megawatt power plant rather than install pollution control equipment estimated to cost $1.1 billion. The station, about 100 miles south of as Vegas, used coal from Black Mesa Mine in Arizona and served electricity customers in California.

The station's owners, including Southern California Edison, were expected to receive tens of millions of dollars from the sale of pollution credits that allowed the release of 53,000 tons of sulfur dioxide.

The tribes and environmental groups want those proceeds to be invested in energy projects that will help tribal communities affected by the plant's closure. About 200 mostly Navajo coal mine workers lost their jobs when the plant was shut down, according to the Just Transition Coalition, which filed the petition.

The groups seek funding from Southern California Edison's sale of about $40 million per year in pollution credits to be used to clean up contamination, create jobs and develop renewable energy sources for the region.

"This is a way to bring about renewable energy such as wind and solar and a stronger economy for people who really need it," said Andy Bessler, southwest representative for the Sierra Club.

On Wednesday, PUC President Michael Peevey received the petition, and the commission would evaluate it, said PUC spokesman Susan Carothers.

Southern California Edison, which owns 56 percent of the station, was also evaluating the proposal and would not comment on it, said spokesman Gloria Quinn.

In 1999, environmental groups won a consent degree that required the plant, which was blamed for contaminating the region's air, to upgrade its pollution controls or close by Jan. 1 this year.

http://www.latimes.com/business/la-fi-mohave12jan12,1,128726.story
From the Los Angeles Times

Indians Seek Funds From Edison

A coalition that includes Arizona Navajo and Hopi members seeks up to $40 million a year in compensation after the closing of a power plant.

By Marc Lifsher
Times Staff Writer

January 12, 2006

Members of two Arizona Indian tribes asked regulators Wednesday to order Southern California Edison Co. to pay them as much as $40 million a year to make up for job losses and other economic fallout from the shutdown of the massive Mohave power plant on Dec. 31.

A coalition that includes Navajo and Hopi Indians as well as environmental groups said the money also would compensate tribal members for "a long history of sacrifices" made on behalf of Edison customers who benefited from cheap power from the Mohave plant since it opened in 1971.

The plant in Laughlin Nev., generated electricity for the Los Angeles Basin using coal dug from the Black Mesa mine on tribal lands in northeast Arizona. Losing its sole customer curtailed production and forced layoffs at Black Mesa, costing the Indians 200 high-paying jobs and $20 million in annual mining royalties.

The Mohave plant, one of the biggest sources of sulfur dioxide pollution in the West, was closed after Edison failed to meet a deadline for installing expensive pollution-control equipment as required in the 1999 settlement of an environmental lawsuit.

In a motion filed Wednesday, the coalition asked the California Public Utilities Commission to order Edison to give the Indians money the utility is expected to earn by selling pollution credits created by mothballing the 1,585-megawatt power plant. Edison<, which operated the plant and is its majority owner, relied on Mohave for 7% of its electricity.

The request for financial restitution, which has not been endorsed by the two tribal governments, is legally unprecedented, some energy experts said.

"They are plowing new ground, and it's going to be a tough argument to make," said Michael Shames, a veteran advocate for energy users with the Utility Consumers' Action Network.

Edison, a unit of Rosemead-based Edison International, declined to comment on the Indians' motion, saying it needed to review the document.

Meanwhile, the utility and Peabody Energy, the world's largest coal-mining company and operator of the Black Mesa mine, continue to negotiate with the two tribes' governments over contracts for coal and water supplies needed to possibly reopen the Mohave plant.

It's unclear how many Hopi and Navajo are actually active in the newly formed Just Transition Coalition, which also includes the Grand Canyon Trust and the Sierra Club among its members.

Beth Sutton, a spokeswoman for Peabody Energy, described the coalition as "a few vocal extremists" and said its PUC motion was "yet another red herring to divert attention from real solutions to minimize Mohave's shutdown."

The coalition wants the PUC to track Edison's sales of pollution credits and to make the funds available to the tribes for job creation and economic development, including solar and wind energy projects.

Under the federal Clean Air Act, owners of older power plants receive credits that allow them to continue operating without being fined for emitting excessive amounts of sulfur dioxide. Those credits can be sold to other polluters if the original owner reduces or eliminates its smokestack emissions.

The credits are traded on the open market and currently sell for about $1,300 per ton of sulfur dioxide. Mohave annually poured about 53,000 tons a year into the atmosphere and potentially could earn $65 million a year for its owners.

In addition to Edison's 56% stake, the Los Angeles Department of Water and Power and two Arizona utilities hold minority shares in the plant.

"It's wrong to allow [ Edison] to reap hundreds of millions of dollars in new, unearned revenues from the sale of sulfur allowances," said Leonard Selestewa, a Hopi with a group called the Black Mesa Trust. "Millions of people have benefited from Mohave; now it's our turn."

PUC President Michael Peevey, who met with Selestewa and other coalition members, said he was sympathetic with the tribes' grievances.

"We've never been confronted with anything like this," he said.

Pollution credits collected by a utility typically belong to ratepayers, Peevey noted, and the commission will need to examine whether it's legal for revenue from the sale of those credits to be shared with outside groups.

The PUC also must consider the Indians' claims that they suffered financial hardships because of unfair contracts with Peabody and Edison, and weigh those against the benefits they received from royalty payments and job creation, Peevey said.

The Indians have as much claim to the revenue from Mohave emission credits as Edison ratepayers, and economic restitution would be "appropriate and just," said Sara Steck Myers, attorney for the Just Transition Coalition.

"There's been a contribution made by the Navajo and the Hopi nations to the welfare and benefit of California ratepayers as well as to Edison," itself," she said.

Restitution payments to the Indians could pay off for California electricity consumers if they are invested in alternative energy projects that send power back to Los Angeles, said Roger Clark of the Grand Canyon Trust in Flagstaff, Ariz. The trust brought the original lawsuit against the Mohave plant, contending that its pollution was obscuring views of the renowned national park.

Development of alternative energy projects also would provide needed local power and jobs for the 8,000 Hopi and 250,000 Navajo tribal members, who suffer unemployment rates of close to 50%, Indian coalition members said.

Past royalty payments have not been "trickling down to the community level," said Marshall Johnson, a Navajo who lives near the Black Mesa mine.

The Indians make a strong argument for getting at least some financial support, said Matt Freedman, an analyst with the Consumer Reform Network, a ratepayer advocacy organization that regularly appears before the PUC.

"I think there's an obligation to provide a transition plan for the Hopi and Navajo people to help them move away from a reliance on dirty coal," Freedman said.