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Would Lower Coal Costs Help?

Would Lower Coal Costs Help?
April 12
14:03 2017

If the price of coal from the Kayenta Mine is lowered, as has been suggested by Peabody Energy, it wouldn’t necessarily mean the Navajo Generating Station would keep churching out electricity.

There are other issues.

Last Thursday Peabody announced that their coal price could go down if a new owner of NGS takes over. The main owner right now is The Salt River Project, but they have let it be known they want out. They think the price of coal against the price of natural gas will mean losses in the production of electricity, or at least would prevent SRP from making as much as they could otherwise.

Among the other issues is that Peabody Energy is going through some well publicized money issues themselves. Their future as a viable company might be in doubt.

Then there’s the lease agreement that hasn’t been worked-out yet. It’s an agreement between SRP (and other current owners) and the Navajo Nation that would allow SRP to stay on the NGS land beyond December 2019, thus allowing time to disassemble NGS and return the land to its original condition.

But without that all-important lease agreement, the plant has to be shutdown this summer, in order for the land to be restored to its original condition before the end of the contract in December 2019.

Still another issue is whether the Trump administration might offer coal subsidies, which would also make a future for NGS at least possible.

Meanwhile, there has been a rumor (actually there have been dozens of rumors) that a final decision on NGS will be made by May first. Lake Powell Communications is keeping a close eye on the situation.

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