Coal supplier Peabody Energy is trying to help save one of its biggest U.S. customers.
On Thursday, the mining giant released a report it commissioned showing the 2,250-megawatt, coal-fired Navajo power plant in Arizona, the largest in the U.S. West, is capable of making money through 2040, even in an era of cheap natural gas. It’s also offering to cut the price the plant pays for its coal. The complex’s utility owners have meanwhile said they may have to shut it later this decade due to higher costs.
Peabody has joined an escalating fight to keep one of the nation’s biggest coal plants alive. Native Americans who work there have turned its survival into a national issue, calling on President Donald Trump to make good on his promise to support coal and protect U.S. jobs. If retired, the complex would join the thousands of megawatts of coal-fired generation that have already shut from mounting costs, environmental regulations and cheap natural gas unleashed by the shale boom.
Peabody is helping advance a plan that will make the Navajo plant “one of the most competitive baseload generating stations in the region,” Kemal Williamson, Peabody’s president for the Americas, said in a statement.
Thousands of jobs would be lost if the plant closes, Beth Sutton, a spokeswoman for Peabody, said by phone Thursday. The U.S. Department of the Interior is coordinating talks in Washington next week to keep it running, she said.
The four utility owners of the plant are seeking an extension to their lease with the Navajo Nation so they can keep the plant running through 2019, when they can begin the decommissioning process.
UNS Energy, which has a 7.5 percent stake in the plant, is in favor of not going beyond the 2019 shutdown date as part of a shift away from coal, but its chief executive officer urged caution.
“Knowing the effect it will have on those communities, we’re not stepping on the gas,” UNS CEO David Hutchens said in an interview at Bloomberg’s headquarters in New York on Thursday. “People have woken up and said is there a way to bridge the gap between the 2019 shutdown date and something further off.”
One idea was to look at providing a transition for the native tribes from coal jobs to other industries or economic activities, he said.
Conceived in the 1960s, the plant is located in the Navajo Nation near Page, Ariz. It’s jointly owned by state and federal agencies as well as publicly traded utilities.
The study commissioned by Peabody was carried out by Navigant Consulting and presented at a working group meeting of the Arizona Corporation Commission in Phoenix.