Navajo Leaders Press Arizona Lawmakers for NGS Coal Tax Exemption

Feb 22, 2018

Navajo Nation officials are pressing the Arizona legislature to take steps to prevent the Navajo Generating Station from closing next year. KNAU’s Ryan Heinsius reports, lawmakers are considering legislation that would do away with a tax on coal in hopes of attracting potential buyers.

Navajo Nation Council Speaker LoRenzo Bates speaks to the Arizona House Finance Committee on Feb. 14, 2018 about a bill to exempt coal supplied to the Navajo Generating Station from state sales tax.
Credit Navajo Nation Office of the Speaker

The bill would cost Arizona’s general fund about $35 million by repealing parts of the Transaction Privilege Tax.

But Navajo Council Speaker LoRenzo Bates says the closure of NGS would have far greater impacts on the state and the tribe.

"You’re looking upwards of at a minimum $40 million a year that Navajo would have to do without. And to replace those jobs and revenue associated with the closure is significant," says Bates.

The owners of NGS will close the plant at the end of 2019 unless a buyer can be found as electricity from natural-gas has become cheaper. Tribal officials say several parties have expressed interest in the 2,250-megawatt plant, but none have been publically named.

NGS and the nearby Kayenta Mine employ hundreds of tribal members and provide significant revenue for the Navajo and Hopi tribes.

Mine owner Peabody Energy is pushing the tax exemption in the legislature, and Navajo President Russell Begaye also supports the measure.