Mohave Plant Deal May Be Coming

Nov 10 - Las Vegas Review-Journal

The Mohave Generating Station, a coal-fired plant at Laughlin that provides Southern Nevada with low-cost power but is a major source of air pollution, may get a new lease on life.

The Hopi Tribe, Navajo Nation, Southern California Edison and a coal company are near an agreement that could keep the plant open -- if three environmental groups back off a Dec. 31 deadline requiring the installation of pollution-reduction equipment, Hopi Chairman Wayne Taylor said Tuesday.

The agreement between the power plant owners and the tribes is "going to be really soon," Taylor said.

"We hope to conclude the negotiations by the end of the year," Taylor said.

Then, the parties hope to persuade the Sierra Club, Grand Canyon Trust and National Parks Conservation Association to permit the Mohave power plant to keep operating while plant owners install pollution-control equipment.

The environmental groups otherwise support a 1999 court order that will require the plant to close at least temporarily on Dec. 31 if pollution reduction equipment has not been installed by then.

However, Taylor said the plant will need to be shut down for four years if the environmental groups don't agree to extend the deadline and insist on having pollution controls in place before operations resume.

"We're still obviously very hopeful (the environmental groups) will be able to work with us so that we don't see an economic disaster occur," he said.

If the plant and the Peabody Energy Corp. coal mine that supplies the plant are shut down, the tribes will lose millions of dollars in royalties from Peabody and coal mining jobs for tribe members.

In a May letter to the tribes, the environmental groups refused to extend the deadline, but the groups seem to have softened their position with comments Tuesday.

"We're always open to proposals. We don't want to be unreasonable," said Roger Clark, a spokesman for the Grand Canyon Trust. "To date, we have not seen any such proposal. So we have no further comment."

Edison issued a statement Monday saying it continues to negotiate privately with the tribes and Peabody.

"At this time, it appears likely the plant will shut down for some period on Dec. 31, 2005, but we hope to minimize any such shutdown," Edison said.

California officials are concerned about having adequate amounts of power "in coming years, making Mohave's 1,580 megawatts more important to our customers than ever," Edison explained. "And the skyrocketing cost of natural gas, the fuel used to generate approximately half of California's power, make fuel diversity a valuable electricity price stabilizer."

Nevada Power Co. executives and state regulators also worry about relying only on natural gas for electricity generation.

Nevada Power spokeswoman Sonya Headen said the utility gets about 3.4 percent of its peak demand power from the Mohave plant. Southern Nevada also benefits from the 340 jobs at the Mohave plant.

The key sticking points to an agreement with the tribes have been finding a new water source and setting a price for coal from a mine on Hopi and Navajo land. Taylor said water could come from the Coconino aquifer near Winslow, Ariz.

The Hopi hope to develop new economic engines, such as "clean-coal" technologies, but those changes will take eight to 10 years to execute. In the meantime, though, the tribes want to rely on revenue from royalties on coal burned at the Mohave plant, Taylor said.

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