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Arizona Regulator Tells SRP Not To Shut Down Coal Plant

Arizona Corporation Commissioner Andy Tobin has a message for one of the state’s largest utilities: keep the coal burning at the Navajo Generating Station.

On Thursday, Tobin, one of the five commissioners who regulate public utilties in Arizona, called for an emergency summit to discuss the prospect of the coal-fired plant in northeast Arizona closing.

Tobin doesn't actually have jurisdiction over Salt River Project, but that isn’t stopping him from wading into the fight. 

"There’s a lot of other things to look at before we have SRP unilaterally make this decision for all of Arizona,” Tobin told KJZZ.

Cheap natural gas and new regulatory burdens are making the plant less economically viable, according to SRP. The utility is reviewing the options and could decide to shut down the plant in 2019 when the current lease is up, if not sooner.

In a strongly worded letter to SRP's president, Tobin pushes back on some of those claims, calling that "myopic calculus ... of the worst sort" and "unacceptable" to him.

SRP has not fully accounted for the volatility of natural-gas prices, Tobin argues, and, more importantly, the full impact this will have on the local economy. Nearly 3,000 Navajo Nation jobs could disappear if the plant and nearby Kayenta Mine close. The letter also notes that more than 85 percent of the revenue for the Hopi Tribe's general-fund budget comes from the plant and mine.

“I know when facilities like this go away how bad it can be for a community," Tobin said.

In a statement, SRP says it shares his concerns, but must also deal with the rising costs of keeping the plant open. It has not yet made a decision about the fate of the power plant. 

SRP operates and owns the majority of the plant. Tobin suggested he might approach some of the other owners — the ones he does regulate like Arizona Public Service and Tucson Electric Power — about possible solutions.

Will Stone was a senior field correspondent at KJZZ from 2015 to 2019.