Peabody Happy With Progress to Keep Mohave Plant Open 

by Jim Maniaci, Diné Bureau
Gallup Independent
16 July 2004   

WINDOW ROCK—Monday's meeting in Albuquerque about keeping the Mohave Generating Station and Black Mesa Mine open past Dec. 31, 2005, lined up with the mine operator's efforts for several years.

U.S. Interior Department Assistant Secretary for Indian Trust Affairs, J. Steven Griles, assembled the gathering of about three dozen representatives of the principals and they agreed to work as quickly as possible for the salvation of the 1971 power plant in Laughlin, Nev., which obtains its coal from the mine on the Navajo and Hopi Reservations.

At stake are about 600 jobs and sizable portions of the two tribes' treasuries. Southern California Edison manages the plant for a group of private and government utilities; Peabody Energy operates the mine whose entire coal production goes to the two-unit, 1,500 megawatt, plant which is a stone's throw from Casino Drive on the Colorado River's west side.

The Peabody press office said, "Our objective is to avoid or minimize the shutdown of Mohave and we've been working with the Navajo Nation, Hopi Tribe, the Mohave owners and the U.S. Department of Interior for several years to create solutions that all parties will support."

Using 'N' Aquifer 

Peabody also said its agreements with the two tribes allow it to use the high-quality, deep, Navajo "N" Aquifer water as long as it is mining the coal. The company points out it supports using another source of water out of respect for cultural concerns which have been expressed.

The company maintains that the "resource remains healthy and robust" and that the company will use less than one-tenth of one percent of the water stored in the deep aquifer. The wells go down about 3,700 feet and are cased to at least 2,000 feet, and therefore, the company maintains, do not materially affect the shallow surface wells which go down about 300 feet.

The world-wide coal company headquartered in St. Louis said some of the previous concerns with Mohave's owners have been satisfied, such as the quality and quantity of coal. The precious fuel source would be washed to reduce the sulfur content to an acceptable level. And with the increased efficiency from the remodeling of Mohave for the installation of air pollution control equipment an additional 1 million tons a year would be needed, raising the consumption to 5.5 million tons a year.

Peabody said the latest figures in the discussions show the 20-year extension of the coal supply agreement with Edison is worth $2 billion in direct economic benefits to the tribes $86 million a year for two decades. Its payments to the two tribal governments supply 13 percent of the Navajo Nation general fund and 23 percent of the annual revenue of the Hopi Tribe, the press office said.

Navajo officials have used the figure of $25 million a year as the hit on the treasury of the largest Indian government in America starting in fiscal year 2006, since Mohave must shut down on Jan. 1, 2006, if it does not have the air pollution control equipment installed. With the Window Rock government's general fund expected to take in a gross of $140 million in fiscal year 2005, the $25 million would equal about 18 percent.

Power for urbanites

Peabody added the new contract would insure the continuation of low-cost electricity to 1.5 million families in the Las Vegas, Los Angeles and Phoenix areas.

The supply contract between Edison and Peabody also expires Dec. 31, 2005, which is the same date the two tribe's have set to halt the pumping of the "N" Aquifer.

The Interior Department's Reclamation Bureau is to do the "C" Aquifer feasibility study and environment impact statement. The Navajo Nation presidential press office has put the cost of the project at $100 million to $180 million since about 100 miles of new line would have to be built from the Canyon Diablo well field north of Interstate 40 between Winslow and Flagstaff to the mesa. The existing 18-inch line would be replaced with a larger one, although Peabody said the size would vary depending on several factors.

Peabody wants to increase its water consumption from 4,400 acre-feet to 6,000 acre-feet because of the use of more coal. The coal is ground into dust and mixed 50-50 with water to form a slurry which is pumped 273 miles with a drop of about 7,000 feet. The feasibility study and impact statement would include a modeling of the "C" Aquifer section being targeted, Peabody said.

Edison has said the cost of the huge inter-state project will be at least $1 billion overall.

While the mining company's press office did not want to identify its participants in the Albuquerque meeting other than to say they were senior management from the western operation and corporate headquarters, others present said they were John Wasik and Fred Palmer.

Participants set a July 31 deadline for their plans to fast-track the project, with Griles to meet with Navajo Nation President Joe Shirley Jr., Hopi Tribe Chairman Wayne Taylor, and Harold Roy of Edison the first week of August.



Reprinted as an historical reference document under the Fair Use doctrine of international copyright law.