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PROTECTING LONG-TERM TRIBAL 

ENERGY JOBS AND KEEPING ARIZONA WATER AND POWER COSTS 

AFFORDABLE: THE CURRENT AND 

FUTURE ROLE OF THE NAVAJO 

GENERATING STATION 

JOINT OVERSIGHT HEARING 

BEFORE THE

SUBCOMMITTEE ON WATER AND POWER 

JOINT WITH THE

SUBCOMMITTEE ON INDIAN AND 

ALASKA NATIVE AFFAIRS 

OF THE

COMMITTEE ON NATURAL RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

Tuesday, May 24, 2011 

Serial No. 112-32 

Printed for the use of the Committee on Natural Resources 

( 

Available via the World Wide Web: http://www.fdsys.gov 

or 

Committee address: http://naturalresources.house.gov 

(II) 

COMMITTEE ON NATURAL RESOURCES 

DOC HASTINGS, WA, Chairman 

EDWARD J. MARKEY, MA, Ranking Democrat Member 

Don Young, AK 

John J. Duncan, Jr., TN 

Louie Gohmert, TX 

Rob Bishop, UT 

Doug Lamborn, CO 

Robert J. Wittman, VA 

Paul C. Broun, GA 

John Fleming, LA 

Mike Coffman, CO 

Tom McClintock, CA 

Glenn Thompson, PA 

Jeff Denham, CA 

Dan Benishek, MI 

David Rivera, FL 

Jeff Duncan, SC 

Scott R. Tipton, CO 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Kristi L. Noem, SD 

Steve Southerland II, FL 

Bill Flores, TX 

Andy Harris, MD 

Jeffrey M. Landry, LA 

Charles J. ‘‘Chuck’’ Fleischmann, TN 

Jon Runyan, NJ 

Bill Johnson, OH 

Dale E. Kildee, MI 

Peter A. DeFazio, OR 

Eni F.H. Faleomavaega, AS 

Frank Pallone, Jr., NJ 

Grace F. Napolitano, CA 

Rush D. Holt, NJ 

Rau ́l M. Grijalva, AZ 

Madeleine Z. Bordallo, GU 

Jim Costa, CA 

Dan Boren, OK 

Gregorio Kilili Camacho Sablan, CNMI 

Martin Heinrich, NM 

Ben Ray Luja ́n, NM 

John P. Sarbanes, MD 

Betty Sutton, OH 

Niki Tsongas, MA 

Pedro R. Pierluisi, PR 

John Garamendi, CA 

Colleen W. Hanabusa, HI 

Vacancy 

Todd Young, Chief of Staff 

Lisa Pittman, Chief Counsel 

Jeffrey Duncan, Democrat Staff Director 

David Watkins, Democrat Chief Counsel 

(III) 

SUBCOMMITTEE ON WATER AND POWER 

TOM McCLINTOCK, CA, Chairman 

GRACE F. NAPOLITANO, CA, Ranking Democrat Member 

Louie Gohmert, TX 

Jeff Denham, CA 

Scott R. Tipton, CO 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Kristi L. Noem, SD 

Doc Hastings, WA, ex officio 

Rau ́l M. Grijalva, AZ 

Jim Costa, CA 

Ben Ray Luja ́n, NM 

John Garamendi, CA 

Edward J. Markey, MA, ex officio 

SUBCOMMITTEE ON INDIAN AND ALASKA NATIVE AFFAIRS 

DON YOUNG, AK, Chairman 

DAN BOREN, OK, Ranking Democrat Member 

Tom McClintock, CA 

Jeff Denham, CA 

Dan Benishek, MI 

Paul A. Gosar, AZ 

Rau ́l R. Labrador, ID 

Kristi L. Noem, SD 

Doc Hastings, WA, ex officio 

Dale E. Kildee, MI 

Eni F.H. Faleomavaega, AS 

Ben Ray Luja ́n, NM 

Colleen W. Hanabusa, HI 

Edward J. Markey, MA, ex officio 

(V) 

CONTENTS 

Page 

Hearing held on Tuesday, May 24, 2011 ............................................................... 1 

Statement of Members: 

Garamendi, Hon. John, a Representative in Congress from the State 

of California ................................................................................................... 14 

Gosar, Hon. Paul A., a Representative in Congress from the State of 

Arizona ........................................................................................................... 11 

Prepared statement of ............................................................................... 13 

Luja ́n, Hon. Ben Ray, a Representative in Congress from the State of 

New Mexico ................................................................................................... 10 

Markey, Hon. Edward J., a Representative in Congress from the State 

of Massachusetts ........................................................................................... 15 

Prepared statement of ............................................................................... 23 

McClintock, Hon. Tom, a Representative in Congress from the State 

of California ................................................................................................... 2 

Prepared statement of ............................................................................... 3 

Napolitano, Hon. Grace F., a Representative in Congress from the State 

of California ................................................................................................... 4 

Prepared statement of ............................................................................... 6 

Young, Hon. Don, the Representative in Congress for the State of Alaska 7 

Prepared statement of ............................................................................... 9 

Statement of Witnesses: 

Johnson, Marshall, Navajo Individual, Kykotsmovi, Arizona ....................... 64 

Prepared statement of ............................................................................... 65 

Justice, Hon. William S., Former Mayor and Member Pro Tem, Page 

Planning and Zoning Commission, Page, Arizona ..................................... 53 

Prepared statement of ............................................................................... 54 

Manuel, Hon. Joseph, Lieutenant Governor, Gila River Indian 

Community, Sacaton, Arizona ..................................................................... 33 

Prepared statement of ............................................................................... 34 

Letter to EPA submitted for the record ................................................... 39 

Masayesva, Vernon, Executive Director, Black Mesa Trust, Flagstaff, 

Arizona ........................................................................................................... 61 

Prepared statement of ............................................................................... 62 

Modeer, David, General Manager, Central Arizona Project, Phoenix, 

Arizona ........................................................................................................... 69 

Prepared statement of ............................................................................... 71 

Shelly, Hon. Ben, President, The Navajo Nation, Window Rock, Arizona .. 24 

Prepared statement of ............................................................................... 25 

Shingoitewa, Hon. LeRoy N., Chairman, Hopi Tribe, Kykotsmovi, 

Arizona ........................................................................................................... 29 

Prepared statement of ............................................................................... 30 

Letter to EPA submitted for the record ................................................... 32 

Silverman, Richard H., General Manager, Salt River Project Agricultural 

Improvement and Power District, Phoenix, Arizona ................................. 55 

Prepared statement of ............................................................................... 56 

Thelander, Dan, Partner, Tempe Farming Company, Maricopa, Arizona ... 75 

Prepared statement of ............................................................................... 76 

Additional materials supplied: 

Arizna Westside Irrigation & Electrical Districts Association, Letter 

submitted for the record ............................................................................... 87 

Brown, G. Brad, Senior Vice President for Southwest Operations, on 

behalf of Peabody Energy, Statement submitted for the record ............... 89 

Brug, Leisa B., Director, Energy Policy Advisor to Governor Janice K. 

Brewer, State of Arizona, Letter submitted for the record ....................... 95 

Franks, Hon. Trent, a Representative in Congress from the State of 

Arizona, Statement submitted for the record ............................................. 2 

Frazier, Anna, Coordinator, Dine’ Citizens Against Ruining Our 

Environment, Letter submitted for the record ........................................... 97 

Innis, Niger, Co-Chairman, Affordable Power Alliance, Las Vegas, 

Nevada, Statement submitted for the record ............................................. 98 

List of documents retained in the Committee’s official files ......................... 86 

McCarthy, Gina, Assistant Administrator, U.S. Environmental Protection 

Agency, Letter to The Honorable Edward Markey submitted for the 

record ............................................................................................................. 17 

Rhodes, Hon. William, Governor, Gila River Indian Community, Letter 

to EPA submitted for the record .................................................................. 39 

(VI) 

(1) 

JOINT OVERSIGHT HEARING ON ‘‘PROTECTING LONG-TERM TRIBAL ENERGY 

JOBS AND KEEPING ARIZONA WATER AND 

POWER COSTS AFFORDABLE: THE CURRENT 

AND FUTURE ROLE OF THE NAVAJO GENERATING STATION’’ 

Tuesday, May 24, 2011 

U.S. House of Representatives 

Subcommittee on Water and Power, joint with the 

Subcommittee on Indian and Alaska Native Affairs 

Committee on Natural Resources 

Washington, D.C. 

The Subcommittees met, pursuant to call, at 2:00 p.m. in Room 

1324, Longworth House Office Building, Hon. Tom McClintock 

[Chairman of the Subcommittee on Water and Power] presiding. 

Present from Subcommittee on Water and Power: Representatives McClintock, Gosar, Napolitano, Grijalva, Costa, Luja ́n, 

Garamendi, and Markey (ex-officio). 

Present from Subcommittee on Indian and Alaska Native Affairs: 

Representatives Young, McClintock, Gosar, Luja ́n, and Markey (exofficio). 

Also Present: Representatives Quayle and Schweikert. 

Mr. MCCLINTOCK. The Subcommittees on Water and Power, and 

Indian and Alaska Native Affairs will come to order. The Subcommittee Chairman does note a quorum, which under Committee 

Rule 3(e) is two Members. The Subcommittee today meets to hear 

testimony on an oversight hearing, entitled, ‘‘Protecting Long-Term 

Tribal Energy Jobs and Keeping Arizona Water and Power Costs 

Affordable: The Current and Future Role of the Navajo Generating 

Station.’’ 

We are also meeting under the mandate of House Resolution 72 

to identify regulatory impediments to job creation, and I think we 

have stumbled upon one. Before we begin, I have a statement from 

Congressman Franks, which he would like to submit for the record. 

I would ask for unanimous consent that Congressman Franks’ 

statement be included. Hearing on objections, so ordered. 

And also the Chair would ask for unanimous consent that Congressman Quayle be permitted to sit with the Subcommittee and 

participate in today’s hearing. Without objection, so ordered. 

Also, the Chair has been warned that we are likely to be called 

away for a vote at about 2:15, and so we will have to recess. They 

told us only one vote, and so it will be about 15 minutes of recess 

probably after the opening statements by the Committee Members, 

which will begin now with opening statements by myself, and the 

Chairman of the Indian and Alaska Native Affairs Subcommittee, 

and the Ranking Members of each of those Subcommittees. 

[The prepared statement of Mr. Franks follows:] 

2 

Statement submitted for the record by The Honorable Trent Franks, a 

Representative in Congress from the State of Arizona 

I want to thank Mr. McClintock and the Subcommittee on Water and Power and 

Mr. Young and the Subcommittee on Indian and Alaska Native Affairs for holding 

this hearing today. This situation is a stunning example of environmentalism run 

amuck. If the Navajo Generating Station (NGS) is forced to close due to the EPA’s 

nonsensical actions, it would be devastating to the economies of the surrounding region, including those of the Hopi and Navajo tribes. 

As the sole remaining buyer of coal from the Hopi tribe, shutting down the NGS 

would cut nearly 90% of the tribe’s income and would effectively shut down the Hopi 

tribe as a functioning government, in addition to putting hundreds of Arizonans (including hundreds of members of the Navajo tribe) out of work, and affecting hundreds of thousands of Arizonans’ current ability to receive water and electricity. 

In exchange for all of the difficulties created, the only ’benefit’ yielded would be 

a change in visibility so slight as to not even be detectable without specialized 

equipment that is significantly more sensitive than the human eye. In other words, 

the supposed environmental benefit is functionally non-existent. 

This is far beyond the pale of environmental stewardship, and I commend the 

holding of this hearing during which these concerns can be laid out in greater detail. 

STATEMENT OF HON. TOM McCLINTOCK, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. MCCLINTOCK. As I said, the purpose of today’s hearing is to 

comprehend an effort by the EPA to impose cost-prohibitive mandates on one of the largest sources of electricity in the western 

United States, the Navajo Generating Station. 

I want to thank our Arizona colleagues, Paul Gosar and Trent 

Franks, for requesting this hearing. Dr. Gosar has spoken eloquently about the need to protest the Navajo Generating Station in 

our past hearings, and today the Subcommittees on Water and 

Power, and Indian and Alaska Native Affairs, get the chance to 

focus entirely on this subject with expert witnesses. 

Since 1975, the Navajo Generating Station has produced 2,250 

megawatts of inexpensive electricity. That is more than produced 

by the entire Hoover Dam. It employs 545 workers, 80 percent of 

whom are members of The Navajo Nation and Hopi Indian Tribe. It pays workers an average of over $100,000 per year in wages 

and benefits. In addition, the nearby coal mines employ another 

422 tribal workers. Royalties from coal sales comprise 80 percent 

of the budget of the Hopi Indian Tribe. 

This electricity powers the Central Arizona Project’s delivery of 

affordable water to most of Arizona, and provides electricity to the 

Los Angeles Department of Water and Power, the Arizona Public 

Service Company, Nevada Power, and Tucson Electric Power. 

Surplus electricity sales repay Federal funds fronted for the construction of the Central Arizona Project and underwrite the Arizona Indian Water Rights Settlements. The NGS is equipped with 

$200 million of environmental control equipment that removes 99.5 

percent of particulate matter. 

In the late 1990s, the NGS was outfitted in addition to that with 

wet limestone scrubbers at a cost of nearly a half-a-billion dollars 

that remove more than 90 percent of sulfur dioxide emissions. In 

2008, low NOx burners were installed at the cost of $45 million. 

The problem is this. Beginning in 1998, environmental extremists began a concerted effort to shut down the inexpensive coalfired electricity upon which our economy depends. Their first victim 

was the Mojave Generating Station. 

3 

The taxpayer-funded Grand Canyon Trust boasted, and I quote, 

‘‘This ends an era of coal at that site, and we hope that it is the 

beginning of many in the region.’’ Well, it was. The EPA pulled an 

already-granted permit for the clean coal Desert Rock Project in 

2009. 

A former Navajo Nation President, Joe Shirley, said, quote, 

‘‘These are individuals and groups who claim to have put the welfare of fish and insects above the survival of the Navajo people, and 

in fact their only goal is to stop the use of coal in the United States 

and The Navajo Nation.’’ 

The question today is whether the Navajo Generating Station 

will be their next victim. The EPA is now moving to impose 

$1 billion of new costs on the Navajo Generating Station, which 

will make it economically impossible to continue operations. 

This radical agenda does not even pretend to be in support of 

public health. Rather, it is to improve the viewshed. But as we will 

hear, the $1 billion of visibility improvements, even if they could 

be economically supported, won’t even be visible to the human eye. 

It is important that we understand the irrational extremism behind this effort. This Administration is willing, and indeed, appears 

eager, to throw thousands of tribal and non-tribal workers into unemployment, devastate the Hopi Indian Tribe, and The Navajo Nation, compromise the Bureau of Reclamation’s ability to make 

water deliveries to millions of Americans, and to repudiate the Federal Government’s trust responsibility to numerous tribal nations. 

We will be told by the Minority’s witnesses not to worry. We will 

replace the electricity with wind and solar power. Well, we need to 

understand what that means. It means replacing power that costs 

less than four cents per kilowatt hour with power that costs 10 

cents and 21 cents, respectively. 

And because wind and solar power is intermittent and unpredictable, it adds absolutely nothing to baseline power because it requires us to build one megawatt of reliable backup power for every 

megawatt of wind and solar, and all of this to replace a generating 

station that we have already paid for. This is sheer insanity. This 

is the Obama EPA. 

We have very painfully witnessed how left-wing ideology and 

junk science have made water and energy shortages, and price increases, a mainstay in my home state of California. The same thing 

could happen in Arizona if the EPA drives the bus off the cliff on 

the matter before us this afternoon. I hope today’s hearing brings 

the EPA back at least to this planet. 

And with that, I yield to the Ranking Member of the Water and 

Power Subcommittee. 

[The prepared statement of Mr. McClintock follows:] 

Statement of The Honorable Tom McClintock, Chairman, 

Subcommittee on Water and Power 

The purpose of today’s hearing is to comprehend an effort by the EPA to impose 

cost-prohibitive mandates on one of the largest sources of electricity in the west— 

the Navajo Generating Station. 

I want to thank our Arizona colleagues, Paul Gosar and Trent Franks, for requesting this hearing. Dr. Gosar has spoken eloquently about the need to protect 

the Navajo Generating Station in our past hearings and today the sub-committees 

on Water and Power and Indian and Alaska Native Affairs get the chance to focus 

entirely on this subject with expert witnesses. 

4 

Since 1975, the Navajo Generating Station has produced 2,250 megawatts of inexpensive electricity—more than produced by the Hoover Dam. It employs 545 

workers—80 percent of whom are members of the Navajo Nation and Hopi Indian 

Tribe—and pays workers an average of over $100,000 per year in wages and benefits. In addition, the nearby coal mines employ another 422 tribal workers. Royalties 

from coal sales comprise 80 percent of the budget of the Hopi Indian Tribe. 

This electricity powers the Central Arizona Project’s delivery of affordable water 

to most of Arizona and provides electricity to the Los Angeles Department of Water 

and Power, the Arizona Public Service Company, Nevada Power and Tucson Electric 

Power. Surplus electricity sales repay federal funds fronted for the construction of 

the Central Arizona Project and underwrite the Arizona Indian Water Rights Settlements. 

The NGS is equipped with $200 million of environmental control equipment that 

removes 99.5 percent of particulate matter. In the late 1990’s, the NGS was outfitted with wet limestone scrubbers at a cost of nearly a half-billion dollars that remove more than 90 percent of sulfur dioxide. In 2008, low NOx burners were installed at the cost of $45 million. 

Beginning in 1998, environmental extremists began a concerted effort to shut 

down the inexpensive coal-fired electricity upon which our economy depends. Their 

first victim was the Mojave Generating Station. The taxpayer-funded Grand Canyon 

Trust boasted, ‘‘This ends an era of coal at that site and we hope that it is the beginning of many in this region.’’ It was. The EPA pulled an already-granted permit 

for the clean coal Desert Rock project in 2009. 

Former Navajo Nation President Joe Shirley said, ‘‘These are individuals and 

groups who claim to have put the welfare of fish and insects above the survival of 

the Navajo people when in fact their only goal is to stop the use of coal in the U.S. 

and the Navajo Nation.’’ 

The question today is whether the Navajo Generating Station will be their next 

victim. The EPA is now moving to impose one billion dollars of new costs on the 

Navajo Generating Station, which will make it economically impossible to continue 

operations. This radical agenda doesn’t even pretend to be in support of public 

health—rather, it is to improve the ‘‘view-shed.’’ But as we will hear, the $1 billion 

of visibility improvements—even if they could be economically supported—won’t 

even be visible to the human eye. 

It is important that we understand the irrational extremism behind this effort. 

This administration is willing and indeed, appears eager, to throw thousands of tribal and non-tribal workers into unemployment, devastate the Hopi Indian Tribe and 

the Navajo Nation, compromise the Bureau of Reclamation’s ability to make water 

deliveries to millions of Americans and to repudiate the federal government’s Trust 

responsibility to numerous tribal nations. 

We will be told by the minority’s witnesses not to worry—we’ll replace the electricity with wind and solar power. We need to understand what that means. It 

means replacing power that costs less than 4 cents per kilowatt hour with power 

that costs 10 cents and 21 cents respectively. And because wind and solar power 

is intermittent and unpredictable, it adds absolutely nothing to baseline power because it requires us to build one megawatt of reliable back-up power for every megawatt of wind and solar. All this to replace a generating station we’ve already paid 

for. This is sheer insanity. This is the Obama EPA. 

We have very painfully witnessed how left-wing ideology and junk science have 

made water and energy shortages and price increases a mainstay in my home state 

of California. The same thing could happen in Arizona if the EPA drives the bus 

off the cliff on the matter before us this afternoon. I hope today’s hearing brings 

the EPA back to this planet. 

STATEMENT OF HON. GRACE F. NAPOLITANO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. NAPOLITANO. Thank you, Mr. Chair. Hopi ancestors left 

these instructions about their sacred homeland. ‘‘Underneath your 

feet lies enormous wealth. Guard it. Do not fall asleep, for if you 

do, it will be pulled out. Do not use it until the right time to do 

it, in the right way, and only use it for the right purposes.’’ 

The words of the Hopi Elders are as relevant today as they were 

hundreds of years ago. The tribal homelands of the Navajo and the 

5 

Hopi Tribes have many natural resources, including coal, abundant 

sunshine, and excellent, and for some other adjective, groundwater. 

The Black Mesa of the Hopi and the Navajo Reservations is the 

home to the Kayenta Mine, which provides 8.1 million tons of coal 

to power the Navajo Generating Station annually, normally known 

as the NGS. 

Power produced at the Navajo Generating Station moves 1.6 million acre-feet of Central Arizona Project water through 300 miles 

of aqueducts and lifting the water on the average of 3,000 vertical 

feet. 

This provides many Arizonans with affordable, should we say inexpensive, and/or cheap, water from the Colorado River. In the 

process of mining this coal, precious groundwater is contaminated 

and sacred sites destroyed. What Peabody Energy, the largest coal 

mining company in the world, pays the tribe in royalties, roughly 

$14 million annually, pales in comparison to the $7 billion revenue 

the company makes each year. 

Compare that to the Navajo 40 percent unemployment, and 48 

percent poverty rate currently. The tribes face a paradox: the coal 

comes from the reservation, the plant is located on tribal land. YET 

there are tribal communities surrounding the generating station 

and the mine that have no access to running water and no electricity in their homes. The tribes that do have access to electricity 

pay at market rates greater than the 3 cents a kilowatt/hour the 

NGS station produces at cost to its owners. 

The tribes that do have access to electricity pay at market rates 

higher and greater than 3 cents a kilowatt hour that the NGS produces at costs to its owners. The Navajo and Hopi do not own any 

part of the NGS, and today’s hearing is entitled, Protecting Long 

Term Tribal Energy Jobs and Keeping Arizona Water and Power 

Costs Affordable: The Current and Future Role of the Navajo Generating Station. 

In order to look at keeping the water and power costs affordable, 

we should ask ourselves a fundamental question. How do we provide water and power to all Arizonans, which includes the tribes 

and their non-tribal neighbors. 

Four years ago, we asked children from The Navajo Nation to 

draw where they thought their water came from. I remember that 

as if it were today. The children drew trucks with hundred-gallon 

water jugs in their truck bed. You can see it. That is a copy of it 

right there. 

It is in the record and I want you to see it again, and engrave 

it in your mind, because this is sad that in this day and age our 

children think that is where the water comes from. A majority of 

the Navajo communities have to use water in stations because 

there is no access to water in their homes. 

Here we are in 2011, and we are faced with the same situation 

where some communities in The Navajo Nation and the Hopi Tribe 

have no access to clean water, and worse, communities are limited 

or have no access to electricity, and many times their water is contaminated. 

Do we really want our children to grow up thinking that their 

water comes from water trucks, and their power from lanterns and 

6 

candlelight? The NGS is no doubt a complex issue involving the 

supply for water deliveries. 

It impacts tribal communities, cities, and the future of Arizona, 

and the contamination of the water is a grave concern of mine. People would like to boil down this complex issue to the simple and 

false claim that EPA regulations threaten to shut down the Navajo 

Generating Station, and jeopardize our tribal economies. That is 

not a cut-and-dried case. 

What we do have is an opportunity to support the ongoing discussion among stakeholders to find short-term solutions that allow 

for water and power to continue to be delivered, and let me tell you 

that in my years in this Subcommittee that water is not getting 

cheaper. It is getting more costly. 

And we also must involve Federal agencies, all of them, to be 

able to come up with solutions, whether it is Energy, Education, 

Labor, Interior, and others, because it is something that affects all 

of those agencies, and it affects our people in the United States. 

At the same time, we must look at options for transitioning to 

clean energy in the future, and providing our tribal communities 

with a chance to develop all resources available to them, including 

job training and on-site manufacturing of whatever brings jobs and 

economy to them. 

We should work to provide equity to The Navajo Nation and the 

Hopi Tribe. Their resources must be valued, and the value of their 

resources must be reflected in what is paid in royalties. 

We must provide affordable water for all Arizonans. Thank you 

to our witnesses, and I especially welcome President Shelly. Good 

to see you, sir. And Hopi Chairman Shingoitewa, and Gila River 

Indian Community Lieutenant Governor Manuel, and I look forward to your testimony. Thank you, Mr. Chair. 

[The prepared statement of Mrs. Napolitano follows:] 

Statement of The Honorable Grace F. Napolitano, 

a Representative in Congress from the State of California 

Hopi Ancestors left these instructions about their sacred homeland: 

‘‘Underneath your feet lies enormous wealth. Guard it. Do not fall asleep 

for if you do, it will be pulled out. Do not use it until the right time to do 

it, in the right way, and only use it for the right purposes.’’ 

The words of the Hopi Elders are as relevant today as they were hundreds of 

years ago. The tribal homelands of the Navajo and Hopi tribes have many natural 

resources, including coal; abundant sunshine and excellent groundwater. 

The Black Mesa on the Hopi and Navajo Reservations is home to the Kayenta 

Mine. This mine provides 8.1 million tons of coal to power the Navajo Generating 

Station annually. 

Power produced at the Navajo Generating Station moves 1.6 million acre-feet of 

Central Arizona Project water through 300 miles of aqueducts and lifting the water 

on average 3,000 vertical feet. This provides many Arizonans with affordable 

(should we say cheap?) water from the Colorado River. 

In the process of mining this coal, precious groundwater is contaminated and sacred sites were destroyed. What Peabody Energy, the largest Coal Company in the 

world pays the tribes in royalties, roughly $14 million annually, pales in comparison 

to the $7 billion dollar revenue the company makes each year. 

The tribes face a paradox: the coal comes from the reservation, the plant is located on tribal land. YET there are tribal communities surrounding the generating 

station and the mine that have no access to running water and no electricity in 

their homes. The tribes that do have access to electricity pay at market rates greater than the 3 cents a kilowatt/hour the NGS station produces at cost to its owners. 

The Navajo and the Hopi Tribes do not own any part of the NGS. 

7 

Today’s hearing talks is entitled ‘‘Protecting Long-Term Tribal Energy Jobs and 

keeping Arizona Water Costs Affordable, the Current and Future Role of the Navajo 

Generating Station. 

In order to look at keeping Water and Power Costs affordable, we should ask ourselves a fundamental question: how do we provide water and power to all Arizonans, 

which includes tribes and their non-tribal neighbors? 

Four years ago, we asked children from the Navajo Nation to draw where they 

thought their water came from. 

Children drew trucks with 100 gallon water jugs in the truck bed. 

A majority of the Navajo communities have to use watering stations because 

there’s no access to water in their homes. 

Here we are in 2011—and we are faced with the same situation where some communities in the Navajo Nation and Hopi Tribe have no access to clean water—and 

worse, communities with limited or no access to electricity. 

Do we really want our children to grow up thinking that their water comes from 

water trucks and their power from lanterns and candle light? 

The NGS is no doubt a complex issue involving the power supply for water deliveries. It impacts tribal communities, cities, and the future of Arizona Water. 

People would like to boil down this complex issue to the simple, and false, claim 

that EPA regulations threaten to shut down the Navajo Generating Station—and 

jeopardizing our tribal economies. This is not a cut and dry case. 

What we do have is an opportunity to support the ongoing discussions among 

stakeholders to find short-term solutions that allow for water and power to continue 

to be delivered. 

At the same time, we must look at options for transitioning to clean energy in 

the future, and providing our tribal communities with the chance to develop all the 

resources available to them. 

We should work to provide equity to the Navajo Nation and the Hopi Tribe. Their 

resources must be valued and the value of their resources must be reflected in what 

is paid in royalties. We must provide affordable water for ALL Arizonans. 

Thank you for our witnesses for traveling today. We especially welcome President 

Shelley, Hopi Chairman Shingoitewa, and Gila River Indian Community Lt. Governor Manuel. WE look forward to hearing your testimony. 

Mr. MCCLINTOCK. The Chair next recognizes the distinguished 

Chairman of the Indian and Alaska Native Affairs Subcommittee, 

Mr. Young of Alaska, for his opening statement. 

Mr. YOUNG. Mr. Chairman, I ask for unanimous consent to submit for the record a comment from the Affordable Power Alliance. 

[The comment from the Affordable Power Alliance follows:] 

Mr. MCCLINTOCK. Without objection. 

[NOTE: The comments have been retained in the 

Committee’s official files.] 

STATEMENT OF HON. DON YOUNG, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF ALASKA 

Mr. YOUNG. Mr. Chairman, I am pleased to be here today, and 

I want to thank the witnesses. I love my lady and her comments, 

but I disagree. The EPA is trying to stop coal, and this is native 

land. This is their land, and you have outside agencies taking away 

the right of their land. That is a taking without compensation. 

It is their decision how it should be utilized, and they say it is 

not. I have watched the EPA, and it is a lousy agency. It has not 

done what it should do. It is not really protecting the environment. 

It is stopping the economic development of this Nation by actions 

that they do not have the authority to do so by regulatory law. 

Eighteen thousand EPA employees figuring out why you can’t do 

something, and they have never done anything to improve the environment, and I will back that up. I watch what they are doing to 

my state every day and it is wrong. 

8 

These are Nations, and they have a right to develop their lands 

as they wish to do so. Yes, protect them, but who should decide 

how it shall be done, and as far as the royalties go, I want you to 

develop your own sources. 

Peabody was leased that land by the BIA and not you, and under 

a Federal agency. The Federal Government has failed miserably on 

all the reservations. They have created the poverty. They created 

the drugs. They created the non-education, and they have not given 

the opportunity to take 49 permits on reservation land. It takes 

two off of reservation land because of the government. 

In this one case the government and the Nation has failed miserably, and my role as Chairman of this Committee is to make sure 

that I am writing this empowerment act that gives you the power 

to do as you wish to do to benefit your people as you should be able 

to do, instead of patting you on the head, and stay where you are, 

and do not improve your lot. 

We don’t need you anymore, and we want you to keep your culture as you wish it to be, and not so as we wish it to be, and as 

we see it as white men. And that is where we have gone wrong in 

this whole body. 

We keep saying that we are helping the poor Alaskan Natives, 

the poor American Indians. You are not helping and we are not 

helping. We have not done the job that we should have done. 

We have an agency, the BIA, which is outdated, miserably outdated—1925, 1825—using the same principles, the same policy. Put 

them on a piece of ground, and don’t let them go ahead, and just 

take care of them a little bit. Give them some poor beef. Don’t give 

them the opportunity. After all, they are not too smart. 

That is the attitude of this government, and I am saying that is 

wrong, and we should overcome that quickly. You have your water, 

yes, and utilize it correctly. Water is a big issue. You have your 

power, yes. You have your power and it is providing for the rest 

of the State of Arizona and other areas. 

And you have minerals, and you have timber, and you have wildlife land. You have all of that, but you should be the manager and 

not some government agency, and this is why I feel so strongly 

about this issue. 

And when I get done with this bill that I am writing, Mr. 

Chairman, I hope to empower the American Indian and the Alaska 

Natives to the point where they can be self-sufficient, with a trust 

relationship with this Congress, who has a responsibility. 

This is important. You are a minority of minorities, and that is 

the scary part. If what has been done to you had been done to 

African-Americans, there would be a huge cry of outrage, but here, 

because you are a minority, we give you lip service. That is not 

going to happen under my watch. 

We are going to solve this problem with these agencies that take 

away your rights, and given to you as a trust relationship with this 

Nation, and they have taken it away, and I have seen it time and 

again. 

The EPA, the Corps of Engineers, the BIA, and Fish and Wildlife 

preserve parks surrounding your land so that you are no longer 

compatible, no longer compatible with those lands that are Federally designated so that you can’t develop your lands. 

9 

So it is a giving and a taking with no compensation due to your 

people. So I look forward to your testimony, and I am confident 

that you will do a good job, but we are going to have the EPA in 

front of us, because they are doing wrong to you, and they are 

doing wrong to my people in Alaska, and they are doing wrong to 

this Nation. 

They are a rogue agency. They are passing regulatory law that 

has no authority, no authority at all, and the fact that they can 

fine you, shut you down, and keep you from doing what you have 

been given the God-given right to do. Thank you, Mr. Chairman. 

[The prepared statement of Mr. Young follows:] 

Statement of The Honorable Don Young, Chairman, 

Subcommittee on Indian and Alaska Native Affairs 

Today’s hearing will focus on the uncertain future of the Navajo Generating Station, a 2,250-megawatt coal-fired generation power plant, located on the Navajo Nation. I want to thank my colleagues from Arizona, Mr. Paul Gosar and Trent 

Franks, for requesting this important hearing. 

The U.S. Environmental Protection Agency, which regulates power plants on reservations, is endangering the survival of the Navajo Generating Station with absurd 

pollution controls. The costs and timeframes of such potential regulations regarding 

regional haze in the Grand Canyon could substantially increase power rates for customers or in a worst case scenario, close the plant. Shutting down the power plant 

would jeopardize jobs, tribal economies, and water rights for thousands of Native 

Americans in Arizona. 

The Navajo Generating Station provides affordable power production for water 

and power customers in Arizona, California and Nevada. It is the eighth largest coal 

plant, in terms of output, in the nation. The plant, which became operational in 

1976, provides the power necessary to move Arizona’s allocation of the Colorado 

River to central and southern Arizona, through a water system called the Central 

Arizona Project. The importance of the Navajo Generating Station to the Central Arizona Project and its customers will be addressed by others testifying today. However, I would like to point out that the largest single customer of the Central Arizona Project water is the Gila River Indian Community. 

As we all know, unemployment is high and rampant in most Indian communities. 

However, thanks to the Navajo Generating Station, hundreds of Native Americans 

are employed. In fact, the power plant employs 545 full-time works and over 80% 

are Native Americans. The Kayenta (KAY-en-TA) Mine, which supplies coal for the 

power plant, employs 415 full-time workers and over 90% are Native American. 

These high-paying jobs would be lost, should the plant close its doors. 

I want to welcome our witnesses and especially thank the elected tribal officials 

who are here to testify about the potential economic and cultural damage the EPA’s 

actions will have on your communities. 

Mr. MCCLINTOCK. Thank you, Mr. Chairman. I have some good 

news and some bad news. The bad news is that we have about 

four-and-a-half minutes left to record our first of two votes on the 

House Floor. 

The good news is that it shouldn’t take more than about 20 minutes, and at that point, I am told that we should be clear for the 

rest of the afternoon. So without objection the Committee will 

stand in recess for about 20 minutes. 

[Recess.] 

Mr. MCCLINTOCK. The Subcommittees will come to order. We 

were in the middle of opening statements when we were so rudely 

interrupted. I am assured or we do not expect another vote until 

about five o’clock, by which time I hope to have this hearing 

wrapped up and placed in the annals of history here. 

On opening statements, Mr. Grijalva, and so Mr. Luja ́n. 

10 

STATEMENT OF HON. BEN RAY LUJA ́ N, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF NEW MEXICO 

Mr. LUJA ́ N. Thank you very much, Mr. Chairman, and we want 

to welcome our friends, our guests that we have here with us 

today, especially our friend from The Navajo Nation, who I have 

the honor of representing in New Mexico with the Eastern Agency, 

Ya’at’eeh, my friend, and it is good to have you. 

Mr. Chairman, this is an important hearing to talk about how we 

can work closely with tribal communities to ensure that the U.S. 

Government is doing its due diligence with tribal governments 

when it comes to consultation. 

This is also an opportunity to highlight what we can do better 

and smarter to produce energy in this country, and I again want 

to thank President Ben Shelly of The Navajo Nation, and Hopi 

Tribal Councilman and Chairman Shingoitewa, thank you for being 

here, sir. 

And, of course, Gila River Lieutenant Governor Joseph Manuel 

for being here. I appreciate it, sir. It is always good to see you, and 

for coming to talk with us today as we talk about the need for a 

thorough tribal consultation during the important decision making 

process, like the one that we are talking about here today. 

Fair and open tribal consultation is important as we strengthen 

our government to government relationships with tribal communities, the Obama Administration has reaffirmed its commitment 

to Indian country to ensure that we are properly addressing tribal 

concerns, and bringing them to the table when we are making decisions about the future of Indian country, and the future of the 

United States of America. 

I hope that the Administration through the EPA, and National 

Park Service, and BIA, and the Department of the Interior, will 

take adequate actions to consult and consider tribal consultations 

in the future. 

And, Mr. Chairman, I think that it is important that as we talk 

about the future of energy in the country, and the future of water 

to some of the parts of the Nation that are restricted, that we talk 

about how we as a Congress can further support our tribes. 

Most recently, we had the ability to get authorization and to 

move forward the Navajo Nation water pipeline project, which was 

opposed by some Members in Congress, and I think that it is important that as we talk about the future of energy in the country, 

but we cannot forget about the importance of water. 

And surely what we can do as a Congress is to be supportive of 

sovereignty as a whole as we look to make sure that we are looking 

from economic opportunities, job opportunities, developing tech 

transfer opportunities, all of which require energy. 

And as we see with The Navajo Nation specifically, we have seen 

other areas of manufacturing come to the Nation, where they are 

putting people to work, and we have seen the importance of training facilities, like San Juan Technical College, that provides that 

round of training not only to be able to support energy industry in 

the country, but again, we had an opportunity this year to vote for 

funding to be able to provide support for educational opportunity 

for The Navajo Nation, and it was rejected by many of our Members here. 

11 

And so, I hope, Mr. Chairman as we go forward that we truly 

talk about a holistic approach to making sure that we are supporting water projects like The Navajo Nation pipeline, which still 

needs funds to be completed. 

That we have serious conversations about training, so that way 

we can support the Nation. We can support all our Native American brothers and sisters when we talk about the future of providing job opportunity on the reservations as well. 

I think that there are areas where we can come together and be 

able to get this done. So, again, Mr. Chairman, I am honored to be 

able to be here with our friends, and I look forward to seeing you 

very soon in your home, and I always appreciate the invitations. 

So thank you very much, Mr. Chairman. I look forward to this important conversation that we are about to have. 

Mr. MCCLINTOCK. Thanks very much. Dr. Gosar. 

STATEMENT OF HON. PAUL A. GOSAR, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF ARIZONA 

Dr. GOSAR. Thank you very much, Chairmen McClintock and 

Young, and Ranking Members Napolitano and Boren, for holding 

this hearing regarding the regulatory challenges facing the Navajo 

Generating Station. 

This is an important and complex issue facing my community, 

the State of Arizona, and the Southwestern region of the United 

States. I truly appreciate the Committee’s accommodating my request. 

For nearly 30 years the Navajo Generating Station has been a 

vital economic engine and job provider in Northern Arizona and directly influences job creation in Central and Southern Arizona as 

well. 

The plant is paramount to sustaining jobs, job creation, and economic recovery. In addition, the plant has play an instrumental 

role in providing affordable year around energy, and an affordable 

reliable and sustainable water supply to cities, industries, farms, 

and tribal communities, encompassing nearly 80 percent of Arizona’s population. 

The Navajo Generating Station is critical to Arizona’s water supply, because it provides 95 percent of the power for the Central Arizona Project or CAP. Each year, CAP uses approximately 2.8 million megawatt hours of electricity to deliver more than 500 billion 

gallons of Colorado River water to a three county service area, that 

includes more than 80 percent of the state’s population. 

This includes 45 percent of the City of Phoenix’s projected water 

demand, and over 80 percent of Tucson’s projected water demand. 

The Bureau of Reclamation owns nearly 25 percent of the Navajo 

Generating Station, and revenues from the sale of excess power 

generated from the plant are used to repay the Federal Government for Arizona’s share of the project. 

These revenues will also be used to help pay for the cost of 

Indian water rights settlements in Arizona. At a time when 48 percent of the Navajos are unemployed, and 40 percent live below the 

Federal poverty level, the plant provides 500 well-paying jobs, with 

almost 80 percent going to the Members of The Navajo Nation. 

12 

In addition, the plant and the associated Kayenta coal mine pro- vides $137 million in revenue and wages to The Navajo Nation, 

and about $12 million annually to the Hopi Tribe, nearly 88 percent of their annual operating budget. 

There, the plant both directly and indirectly supports the Native 

Americans’ overall economic viability, and is vital to their sustainability as an independent sovereign nation. We have long encouraged Native American self-sufficiency, and to now see the Federal 

Government try to pull the rug out from under a successful, selfsufficient Native American industry, is beyond comprehension. 

In addition, it is important to note the loss of revenue from the 

sale of excess Navajo Generating Station power threatens the continued viability of all current Native American water rights settlements in Arizona, and jeopardizes the ability of the United States 

to settle with other tribes in an ongoing water rights settlement negotiations. 

Despite these proven benefits the Navajo Generating Station is 

in danger of being closed down due to unreasonable air visibility 

regulations. The Obama Administration’s Environmental Protection 

Agency has spent in the last few years reevaluating and drastically 

changing the rules and policies, even though Congress has made 

little to no changes to the environmental law. 

Specifically, the EPA is imposing regulatory uncertainty on the 

Navajo Generating Station by utilizing the best available retrofit 

technology, or BART, determination under the Regional Haze Rules 

of the Clean Air Act. 

Since its construction, the owners of NGS have been committed 

to stewardship of the environment, continually taking actions toward the continued long-term safe, reliable, and economical operations of the plant. 

They have been pro-active in implementing science-based environmental controls to ensure the plaint meets ever-changing environmental regulations imposed by the Federal Government. Over the past two decades, they have invested over $650 million 

in construction of the plant, including $200 million in environmental control equipment, with negligible rate increases to the consumer. 

However, these pro-active measures are not enough for the EPA. 

Even when industry goes above and beyond these demands of Federal law, the agency continues to use rules and regulations to continue to move the bar further down the line, implicating economic 

impact. 

The agency is strongly considering imposing over $1 billion of 

new costs on the Navajo Generating Station, a cost almost 20 times 

more than equally effective environmental measures that NGS 

owners are willing to undertake. 

The cost and time frames of EPA’s pending mandates would 

make it economically impossible to continue operations. This is 

very tactic and used in the past in my state, and across the country, to dictate winners and losers in the energy field. 

I look forward to the hearing with the rest of my Arizonans 

about the true effect of the Administration’s actions could have on 

our communities and continuing t push this issue into the forefront 

as the EPA considers its regulatory stance. Thank you. 

13 

[The prepared statement of Dr. Gosar follows:] 

Statement of The Honorable Paul A. Gosar, a Representative 

in Congress from the State of Arizona 

Thank you Chairmen McClintock and Young, and Ranking Members Napolitano 

and Boren, for holding this hearing regarding the regulatory challenges facing the 

Navajo Generating Station. This is an important and complex issue facing my community, the State of Arizona, and the Southwestern region of the United States. I 

truly appreciate the committees’ accommodating my request. 

For nearly thirty years, the Navajo Generating Station (NGS) has been a vital 

economic engine and job provider in Northern Arizona and directly influences job 

creation in central and southern Arizona. The plant is paramount to sustained jobs, 

job creation, and economic recovery. In addition, the plant has played an instrumental role in providing affordable year-round energy and an affordable, reliable 

and sustainable water supply to cities, industries, farms, and Tribal communities 

encompassing nearly 80 percent of Arizona’s population. 

The NGS is critical to Arizona’s water supply because it provides 95% of the 

power for the Central Arizona Project (CAP). Each year, CAP uses approximately 

2.8 million megawatt hours of electricity to deliver more than 500 billion gallons of 

Colorado River water to a three-county service area that includes more than 80% 

of the state’s population. This includes 45% of the city of Phoenix’s projected water 

demand and 80% of Tucson’s projected water demand. 

The Bureau of Reclamation owns nearly 25% of the NGS, and revenues from the 

sale of excess power generated from the plant are used to repay the federal government for Arizona’s share of the project. These revenues will also be used to help 

pay for the costs of Indian water rights settlements within Arizona. 

At a time when 48% of the Navajos are unemployed and 40% live below the federal poverty line, the plant provides 500 well-paying jobs, almost 80% going to members of the Navajo Nation. In addition, the plant and the associated Kayenta coal 

mine provide $137 million in revenue and wages to the Navajo Nation and about 

$12 million annually to the Hopi Tribe, nearly 88 percent of their annual operating 

budget. Therefore, the plant both directly and indirectly supports the Native Americans’ overall economic viability and it vital to their sustainability as independent 

sovereign nations. We have long encouraged Native American self-sufficiency. To 

now see the Federal Government try to pull the rug out from under a successful, 

self-sufficient Native American industry is beyond comprehension. 

In addition, it is important to note, the loss of the revenue from the sale of excess 

NGS power threatens the continued viability of all current Native American water 

rights settlements in Arizona and jeopardizes the ability of the U.S. to settle with 

other Tribes in on-going water rights settlement negotiations. 

Despite these proven benefits, the NGS is in danger of being closed down due to 

unreasonable air visibility regulations. The Obama Administration’s Environmental 

Protection Agency has spent the past two years reevaluating and drastically changing rules and policies even though Congress has made little-to-no changes to environmental law. 

Specifically, the EPA is imposing regulatory uncertainty on the Navajo Generating Station, by utilizing the Best Available Retrofit Technology (BART) determination under the Regional Haze Rule of the Clean Air Act. 

Since its construction, the owners of the NGS have been committed to stewardship of the environment, continuously taking action towards the continued longterm safe, reliable, and economical operation of the plant. They have been pro-active 

in implementing science-based environmental controls to ensure the plant meets 

ever-changing environmental regulations imposed by the federal government. Over 

the past two decades, they have invested over $650 million in construction of the 

plant, including $200 million in environmental-control equipment, with negligible 

rate increases to the consumer. 

However, these proactive measures are not enough for the EPA. Even when industry goes above and beyond the demands of federal law, the agency continues to 

use rules and regulations to continue to move the bar further without regard for 

the economic impact. The agency is strongly considering imposing over one billion 

dollars of new costs on the Navajo Generating Station, a cost almost 20 times more 

than equally effective environmental measures that NGS owners are willing to undertake. The cost and timeframes of EPA’s pending mandates would make it economically impossible to continue operations. This very tactic has been used in the 

past in my state and across the country to dictate winners and losers in the energy 

field. 

14 

Despite what some might have you believe, over 2,200 mw of power cannot be easily replaced. While I support an all-of-the-above energy approach, which includes alternatives like solar and wind, those types of intermittent energies simply are incapable of replacing the NGS in the next 25 to 30 years, let alone in the next 10 

years. At a time when long-term, good paying jobs are critical to our economic recovery, it would be devastating to our constituents and the State of Arizona to lose this 

important asset and its numerous benefits. 

It is important to note that the final rule has not been issued. However, the Administration’s conduct in this matter has made its intentions clear: it plans to impose the worst case scenario on the plant. There is no doubt that this scenario will 

effectively shut the NGS plant down, and devastate the already struggling Arizona 

economy. And by so doing, inflict another injustice against the Hopi, Gila River 

Community and the Navajo. 

The EPA’s hard line approach with respect to Navajo Generating Station is nothing short of a case study for this Administration’s EPA: overreaching its regulatory 

authority, exceeding Congressional intent, and forgoing consultation with stakeholders. EPA’s continued hard-line stance is a direct threat to the State of Arizona’s 

long-term water and energy security. 

I look forward to hearing from my fellow Arizonans about the true effect the Administration’s actions could have on our communities and continuing to push this 

issue into the forefront as the EPA considers its regulatory stance. 

Mr. MCCLINTOCK. Thank you. Mr. Garamendi. 

STATEMENT OF HON. JOHN GARAMENDI, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. GARAMENDI. Mr. Chairman, and Members, thank you very 

much for being here. It is good to be once again working with you. 

In the mid-1990s, I was engaged in this particular issue while I 

was Deputy Secretary to the Department of the Interior. 

And shortly after I left the Department, an agreement was 

worked out to proceed, and here we are 10 years or 12 years later 

still trying to figure out what to do. Obviously complex and with 

economic and social impact for the Navajo Tribe, as well as an environmental impact for one of the—well, many of the most spectacular places in America, not only the tribal reservation, but also the 

Grand Canyon and areas around that. 

There is no doubt that there is a haze problem in the area, having traveled through the area, and I know that you gentlemen live 

there, you are undoubtedly well aware of it, and it is also a health 

hazard as well. It is not just haze. 

And also an economic problem in that many of the spectacular 

views are obscured by the haze from generating plants, not only 

this one, but others in the area. It needs to be dealt with, and we 

need to come to some sort of a conclusion to clean up these plants. 

The technology has aged, is insufficient, and creates a problem. 

Will it be expensive? Yes. Will it be more expensive than doing 

nothing? I don’t think so. And I would hope that the EPA moves 

along expeditiously with its current effort to find an appropriate accommodation, one that would significantly limit the pollution from 

the plant, and simultaneously allow for the necessary electrical 

generation and jobs associated with it. 

I think it can be done. I know that when I was dealing with this 

in the 1990s, we were on a way toward solving it. Obviously, that 

has not happened in the intervening years. But at the end of the 

day, it does no one any good to pollute both the environment, the 

extraordinary view sheds of the region, and ultimately the atmosphere. 

15 

This has to be dealt with, and I urge all parties to stay with it. 

I will do what I can to accommodate that, but a hiatus and to stop 

this process would be in my view inappropriate. I yield back my 

time. 

Mr. MCCLINTOCK. Mr. Markey. 

STATEMENT OF HON. EDWARD MARKEY, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF MASSACHUSETTS 

Mr. MARKEY. In the early 1900s, Arizona’s sunshine and clean 

desert air was advertised as a cure for tuberculosis. Today, the 

sunshine is still abundant in Arizona, but the clean air that the 

‘‘lungers’’ sought is not always there. 

Over the last decades the Clean Air Act has improved the air 

quality across the Nation, providing significant health benefits and 

beginning the clearing of our most iconic vistas, but as much 

progress as we have made cleaning up our cars, and power plants, 

some facilities, like the Navajo Generating Station, still need to 

improve. 

Based on 2010 emissions, it is the third largest emitter of nitrogen oxides in the Nation, even with some nitrogen pollution controls installed on two of its three units. Nitrogen oxide are one of 

the main pollutants that reduce visibility. 

They also have serious health impacts, both directly and as a 

component of ground level ozone and particulate matter, including 

asthma, other respiratory illnesses, heart disease, and premature 

death. 

Just 15 miles from the Grand Canyon National Park, pollution 

from the Navajo Generating Station can impair the view, and at 10 

other national parks and wilderness areas in the region. 

The nearly five million people who visit the Grand Canyon annually expect a grand view, like this one on a good visibility day in 

2010. But some days, as they stand on the rim of the canyon, their 

view is limited by the haze of pollution, like in this picture, a poor 

visibility day in that very same year. 

Recognizing that preserving the air and the view was as important as preserving the land, Congress included a program to protect scenic vistas in the 1977 amendments to the Clean Air Act. 

In 1999, the Regional Haze Rule finally established the requirements to carry out these protections. The owners of the Navajo 

Power Plant, and those owners of the Salt River Project Reclamation, the Los Angeles Department of Water and Power, the Arizona 

Public Service Company, Nevada Energy, and Tucson Electric 

Power, all those companies, they all knew it. 

They knew what the rule was. They knew that they would have 

to make additional investments to clean up its pollution. The EPA 

is currently analyzing what pollution controls must be put in place 

to bring this generation station owned by those six entities into 

compliance with the Clean Air Act. 

As part of that work, they are looking at the economic impact 

and the water and electricity users in Arizona that are clearly critical, and that have complex issues. At the same time the Salt River 

Project, the operator and partial owner of the plant, is conducting 

a stakeholder process to develop a consensus proposal to submit for 

EPA’s consideration. 

16 

The EPA intends to release a proposal this summer, and after an 

additional period of public comment, they hope to make a final determination next year. In spite of this ongoing work, the Republican majority have called this hearing today. 

And while they might want to portray it as a way to clear the 

air, I think it will just probably muddy the waters, although the 

EPA has not proposed to close the plant, you will hear dire predictions to that effect from my colleagues across the aisle. 

Radio evangelist Harold Camping circulated that the world 

would end last Saturday at 6:00 p.m., and much like that prediction, today’s forecast of a regulatory rapture of the Navajo Generating Station is overblown. 

The power plant is too important and too profitable to shut down 

anytime soon. To bring some reality to the apocalyptic vision that 

some might try to portray today, I asked the EPA to answer some 

questions about their ongoing work at the generating station, as 

well as their work on other power plants in The Navajo Nation. I 

would like to submit their response for the record without objection. 

Mr. MCCLINTOCK. Without objection. 

[The letter submitted for the record by Mr. Markey from the U.S. 

Environmental Protection Agency follows:] 

17 


66648.015.eps
18 


66648.016.eps
19 


66648.017.eps
20 


66648.018.eps
21 


66648.019.eps
22 


66648.020.eps
23 

Mr. MARKEY. Now, is the time to develop a plan that will reduce 

pollution, increase economic development, and overcome the decades of economic and health inequities faced by the tribes. There 

is a reason for optimism that that can be done. 

In 1991, diverse stakeholders came together to craft a broad 

agreement to address sulfur dioxide emissions from the Navajo 

Power Plant and other similar issues that confront the plant today. 

Rather than trying to protect the status quo of this Committee, 

should like in 1991 work to try to find a solution that leads to clean 

air and to clean energy. Mr. Chairman, I yield back the balance of 

my time. 

[The prepared statement of Mr. Markey follows:] 

Statement of The Honorable Edward J. Markey, Ranking Member, 

Committee on Natural Resources 

In the early 1900s, Arizona’s sunshine and clean desert air was advertised as a 

cure for tuberculosis. Today the sunshine is still abundant in Arizona, but the clean 

air that the ‘‘lungers’’ sought is not always there. 

Over the last decades, the Clean Air Act has improved the air quality across the 

nation, providing significant health benefits and beginning the clearing of our most 

iconic vistas. But as much progress as we have made cleaning up our cars and 

power plants, some facilities, like the Navajo Generating Station, still need to 

improve. 

Based on 2010 emissions, it is the third largest emitter of nitrogen oxides in the 

nation, even with some nitrogen pollution controls installed on two of its 3 units. 

Nitrogen oxides are one of the main pollutants that reduce visibility. They also have 

serious health impacts—both directly and as a component of ground-level ozone and 

particulate matter—including asthma, other respiratory illnesses, heart disease and 

premature death. Just 15 miles from the Grand Canyon National Park, pollution 

from the Navajo Generating Station can impair the view there and at 10 other national parks and wilderness areas in the region. 

The nearly five million people who visit the Grand Canyon annually expect a 

grand view like this one on a good visibility day in 2010. [picture of Grand Canyon 

on a good day] 

But some days, as they stand on the rim of the canyon, their view is limited by 

the haze of pollution like in this picture of a poor visibility day in that same year. 

[picture of bad visibility] 

Recognizing that preserving the air and the view was as important as preserving 

the land, Congress included a program to protect scenic vistas in the 1977 amendments to the Clean Air Act. In 1999, the Regional Haze Rule finally established the 

requirements to carry out these protections. The owners of the Navajo power plant 

have known for decades that they may have to make additional investments to clean 

up its pollution. 


66648.021.eps
24 

The EPA is currently analyzing what pollution controls must be put in place to 

bring the Navajo Generating Station into compliance with the Clean Air Act. As 

part of that work, they are looking at the economic impact on Tribes and water and 

electricity users in Arizona, which are clearly critical and complex issues. At the 

same time, the Salt River Project, the operator and partial owner of the plant, is 

conducting a stakeholder process to develop a consensus proposal to submit for 

EPA’s consideration. EPA intends to release a proposal this summer. After an additional period of public comment, they hope to make a final determination next year. 

Despite all this ongoing work, the Republicans have called this hearing today. 

While they might want to portray it as a way to clear the air, I think it will just 

muddy the waters. Although EPA has not proposed to close the Navajo power plant, 

you will hear dire predictions to that effect from my colleagues across the aisle. 

Radio evangelist Harold Camping calculated that the world would end last Saturday at 6 p.m. And much like that prediction, today’s forecast of a ‘‘regulatory rapture’’ of the Navajo Generating Station is overblown. The power plant is too important and too profitable to shutdown any time soon. 

To bring some reality to the apocalyptic vision that some might try to portray 

today, I asked the EPA to answer some questions about their ongoing work on the 

Navajo Generating Station, as well as their work on other power plants in the 

Navajo Nation. I would like to submit their response for the record. 

Now is the time to develop a plan that will reduce pollution, increase economic 

development and overcome the decades of economic and health inequities faced by 

the Tribes. 

There is reason for optimism that this can be done. In 1991, diverse stakeholders 

came together to craft a broad agreement to address sulfur dioxide emissions from 

the Navajo power plant and other similar issues that confront the plant now. Rather 

than trying to protect the status quo, this committee should be trying to help find 

the solution that leads to clean air and clean energy. 

Mr. MCCLINTOCK. Thank you. Well, we will now hear from our 

first panel of witnesses. Each witness’ written testimony will appear in full in the hearing record, and so I would ask that the witnesses keep their oral statements to five minutes as outlined in our 

invitation letter, and also under Committee Rule 4[a]. 

I also want to explain how our timing lights work. When you 

begin to speak, our Clerk will start the timer, and a green light 

will appear. After four minutes, a yellow light will appear, which 

means that you should talk very, very fast, and at five minutes, the 

red light will come on, and that means that you should stop talking 

because the Members have stopped listening. 

And if it is any consolation, we hold ourselves to the same rules. 

The Committee is very honored to have as our first witness The 

Honorable Ben Shelly, President of The Navajo Nation, from Window Rock, Arizona, to testify. Mr. President, thank you for coming. 

STATEMENT OF HON. BEN SHELLY, PRESIDENT, 

THE NAVAJO NATION, WINDOW ROCK, ARIZONA 

Mr. SHELLY. Mr. Chairman, Members of the Committee, Tribal 

Leaders, Ya’at’eeh. I am Ben Shelly, President of The Navajo Nation. I thank the Committee for the opportunity to provide testimony on the future of the Navajo Generating Station, a power 

plant located on The Navajo Nation, employing Navajo people, utilizing Navajo coal, that is critical to our economy. 

The Navajo Generating Station, NGS, is located near the Town 

of Page, Arizona. The Navajo Nation leased the site to a variety of 

stakeholders of NGS. The plant has been in operation since 1974. 

The many interests in the plants are far-reaching and have great 

impact on the region’s economy. 

25 

The Navajo Nation wished to first preserve jobs in an already 

stressed economy, and the area of these jobs includes 545 full-time 

positions, 80 percent of which are Native Americans. 

In addition to the Navajo Generating Station the jobs at the 

Kayenta Mine, which is supported by NGS, employs 415 full-time 

workers, and 90 percent of them are Native Americans. NGS and 

Kayenta Mine together contribute about $140 million annually in 

revenues and wages to the Navajo Nation. 

The Navajo Nation recognized the importance of the Navajo Generating Station and the deliveries of the Central Arizona Project, 

CAP, water for the entire valley of Arizona. We wish for this body 

to recognize the significant benefits The Navajo Nation gave up in 

the interests of external stakeholders and the development of NGS. 

Now The Navajo Nation is engaged in negotiations to settle its 

water rights claims in Arizona. We ask for the support of Congress 

in this settlement. The Navajo Nation wishes to express support for 

utilizing an energy mix to ensure we are being a responsible caretaker of our environment, while providing economic opportunity to 

our people. 

The Navajo Nation supports renewable energy development as 

part of its overall energy portfolio and energy policy. The Navajo 

Nation will continue to seek to develop a cleaner portfolio, to include such renewable sources such as wind solar and biomass. 

The United States EPA proposed rules do not make sense for the 

Navajo Generating Station. The costs to implement these rules 

would force the plant closure, and would have damaging economic 

impact on The Navajo Nation, and the state dependence on NGS 

energy. 

It would put nearly 1,000 people out of work and jeopardize our 

water settlement plan. Instead, The Navajo Nation supports using 

a phased approach to emission reduction for NGS, and we feel that 

this approach is reasonable to meet the EPA’s timeline for the Regional Haze Rule, and is the most effective method for balancing 

the economy and environmental needs of our people. 

The Navajo Nation’s economy depends upon the development of 

this energy resource due to the past Federal policy. The Navajo Nation is heavily dependent on oil extraction, like the rest of the 

world, and The Navajo Nation faced the challenges associated with 

energy dependencies, including climate change effects on our 

health, environment, and other impacts for energy development. 

As the President of The Navajo Nation, I am regularly required 

to evaluate competitive interests in making decisions that affects 

my people. The Navajo Nation is blessed with natural fossil fuels 

and renewable energy resources that we have the right to develop. 

NGS is an essential component of The Navajo Nation’s economy 

and must remain viable for the sake of The Navajo Nation and our 

people. Ahe’hee’. Thank you. 

[The prepared statement of Mr. Shelly follows:] 

Statement of Ben Shelly, President, Navajo Nation 

INTRODUCTION 

Ya’a’teeh. I am Ben Shelly, President of the Navajo Nation. I thank the Committee on Natural Resources, Subcommittee on Indian and Alaska Native Affairs 

and Subcommittee on Water and Power, for this opportunity to provide testimony 

to the Committee regarding the future of the Navajo Generating Station, a coal-fired 

26 

power plant located on the Navajo Nation, employing Navajo people and utilizing 

Navajo coal that is critical to the economy of the Navajo Nation. 

THE NAVAJO NATION 

The Navajo Reservation, or Dine ́’tah, is the homeland of the approximately 

300,000 Navajo people. It covers more than 27,000 square miles within the exterior 

boundaries of Arizona, New Mexico, and Utah, also occupying parts of 13 counties 

in those states, and is a place of great beauty. 

The Navajo people struggle with extreme poverty that places the reservation 

among the poorest regions in the United States. 48% of the Navajo people are unemployed and 40% live below the federal poverty line. 

Our living conditions are substandard when compared with the rest of the United 

States. Navajo homes often lack basic infrastructure and amenities: 31% of homes 

do not have complete plumbing; 28% do not have operational kitchen facilities; 38% 

do not have water services; 32% are without electricity; and 60% of the homes lack 

basic telephone services, let alone having access to broadband and the internet. 

NAVAJO GENERATING STATION 

The Navajo Generating Station (NGS) is located in the outermost northwestern 

edge of the Navajo Reservation near the town of Page, Arizona. The Nation and 

owners of NGS entered into a plant site lease in 1969. NGS’s operating agent is the 

Salt River Project (SRP), which owns 21.7% of the electric generating unit. The U.S. 

Bureau of Reclamation (BOR) owns 24.3%, Los Angeles Department of Water and 

Power (LADWP) owns 21.2%, Arizona Public Service Company owns 14.0%, Nevada 

Energy (NE) owns 11.3%, and Tucson Electric Power (TEP) owns 7.5%. NGS provides electricity to customers in Arizona, Nevada, and California, and also supplies 

a majority of the electricity for the Central Arizona Project (CAP). 

Construction of the first of three electric generation units (EGUs) began in 1969. 

The first unit went online in 1974, and construction of the third unit was completed 

in 1976. Each EGU at NGS is rated at 750MW for a combined total of 2,250 MW. 

NGS uses high quality low-sulfur bituminous coal that is mined 78 miles away at 

the Kayenta Mine. The Kayenta Mine is located on Navajo and Hopi lands on Black 

Mesa and operated by Peabody Western Coal Company. 

NGS employs 545 full-time workers, 80% of which are Native American. The 

Kayenta Mine employs 415 full-time workers, 90% of which are Native American. 

NGS and the Kayenta Mine together contribute approximately $140 million annually in revenues and wages to the Navajo Nation, and the Hopi Tribe has commented that 80% of its general revenues are from coal. NGS thus both directly and 

indirectly supports the Nation’s overall economic viability, the health and welfare 

of the Navajo people and its communities, and the sustainability of the Navajo Nation as an independent sovereign nation. 

CENTRAL ARIZONA PROJECT 

Energy generated by NGS and attributable to the federal share of ownership in 

the plant is used to deliver water through the CAP system. Many benefits from 

NGS flow to and through the CAP system. The importance of NGS to the CAP and 

its customers will be addressed by others testifying today. However, I would like to 

touch briefly on the relationship of NGS to Indian water rights settlements in Arizona. The Secretary of the Interior has reserved a pool of Arizona’s CAP water to 

be used to settle the water rights claims of Arizona tribes. NGS power keeps that 

water affordable. Increased power costs, whether attributable to capital improvements at NGS mandated by environmental regulatory action or plant closure would 

increase the cost of tribal CAP water significantly. In addition, revenue derived from 

the sale of surplus federal power is deposited in the Lower Colorado River Basin 

Development Fund and provides a source of funds for tribal water rights settlements. The Navajo Nation is engaged in negotiations to settle its water rights 

claims in Arizona. It is likely that any settlement will include CAP water delivered 

with NGS power and money from the Lower Basin Development Fund to build 

water delivery infrastructure projects. 

UNCERTAINTIES FACING NAVAJO GENERATING STATION 

The Navajo Nation, Navajo employees of NGS and the Kayenta mine, and their 

families and communities, and the various other stakeholders at NGS, are currently 

faced with uncertainty over the future of the plant. This uncertainty stems from 

several issues: the current lease negotiations between the Navajo Nation and the 

plant owners, proposed rule-making by the Environmental Protection Agency (EPA) 

which would impose Best Available Retrofit Technology (BART) combustion controls 

on the plant and the associated costs of such technology, negotiations for a new coal 

supply contract between NGS and Peabody, potential changes in the ownership inVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00032 Fmt 6633 Sfmt 6621 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
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terests of NGS, as well as expected future regulations or legislation limiting greenhouse gas (GHG) emissions, with the significant associated capital and operating 

costs for compliance associated with such regulation. 

EMISSION UPGRADES 

NGS has spent over $650 million on environmental control technology, including 

new Sulfur Dioxide (SO2) limestone scrubbers that remove over 90% of the SO2

emissions, Electrostatic Precipitators that capture 99% of the fly-ash that is recycled 

for uses as additives in cement or concrete construction materials, and Low-NOX

burners and Separated Over Fire Air Technology that reduce the NOX emissions by 

40%. NGS complies with all current federal air quality standards and emission limitations. 

EPA RULE–MAKING FOR BART 

The Navajo Generating Station is subject to regulation under the Clean Air Act 

Regional Haze Rule. The Regional Haze Rule was adopted to improve visibility in 

Federal Class I Areas, such as national parks, monuments and recreation areas. 

NGS is located in close proximity to 16 Class I Areas. 

The goal of the Regional Haze Rule is to return visibility in federal Class I Areas 

(e.g. the Grand Canyon) to pristine conditions by 2064. The Rule requires ’reasonable progress’ towards this goal. The EPA has the responsibility to establish a rate 

of reasonable progress for NGS, and to select appropriate technology to achieve 

meaningful emission reductions to meet the final visibility goal by 2064, rather than 

selecting a technology with exorbitant costs and compliance requirements by 2018, 

and in doing so adversely impacting the Navajo Nation and the Navajo people. 

In 2009, the US EPA published an Advanced Notice of Proposed Rulemaking addressing preliminary issues in anticipation of the agency’s determination of emissions controls that would be required as BART for NGS and a second coal-fired 

power plant located on the Nation’s lands—Four Corners Power Plant. The US EPA 

is considering requiring installation of Selective Catalytic Reduction (SCR) technology as BART for NGS and has issued a proposed Federal Implementation Plan 

(FIP) that would require the installation of SCRs on all 5 EGUs at Four Corners. 

The exorbitant capital and operating costs of SCR technology, while so much other 

uncertainty is facing NGS, would likely force closure of the plant if SCR is adopted 

as BART. Instead, the Nation supports using a phased approach to emission reductions for NGS. As the Nation commented to EPA in response to the ANPR, advanced combustion controls—Low NOX Burners (LNB) and Separated Over Fire Air 

(SOFA) Technology, and not SCR, are BART for Navajo Generating Station at this 

time. 

Implementing any more stringent technology as BART for NGS in the short term 

could force plant closure, an eventuality that would have catastrophic economic impacts on the Navajo Nation. NGS is located on Navajo Nation land, it utilizes the 

Nation’s coal, and income from NGS and the Kayenta mine contribute substantially 

to the economy of the Navajo Nation, both directly through lease fees and from royalties and taxes on the Nation’s coal, as well as indirectly through skilled jobs and 

employment for the Navajo people and through economic development in the way 

of service support jobs. Any BART determination for NGS must give substantial 

consideration to the devastating impacts that closure of NGS would have on the 

Navajo Nation and the Navajo people. 

The US EPA must also consider the cumulative effects of the BART determination 

for NGS regionally. Three coal-fired power plants are located on or near the Navajo 

Nation: NGS and Four Corners within the Navajo Nation, and the San Juan Generating Station adjacent to the Navajo Nation. All three coal fired plants and the coal 

mines that supply them contribute to the tribal economy and regional economic dynamics. Current and proposed environmental regulatory actions affecting these facilities, as well as the impact of past actions, including the closure of the Mojave 

Generating Station, and their potential cumulative economic impacts, should be considered in determining the BART for NGS. 

OTHER INTERESTS 

The Department of Interior (DOI) is proposing a study to provide various generation and emission control strategy options for responding to EPA’s proposed BART 

determination for NGS. This study will consider the feasibility of transitioning NGS 

to cleaner energy production to improve the regional air quality while maintaining 

current energy and CAP water delivery obligations. 

The National Renewable Energy Laboratory (NREL), the Department of Energy 

(DOE), including the Clean Coal Office (CCO) and the Tribal Energy Program 

(TEP), Sandia National Labs (SNL), Lawrence Livermore National Labs (LLNL), the 

DOI, the Navajo Nation, NGS, and CAP, and others, recognize the stake that many 

28 

parties have in the future of NGS, and the power and water delivery obligations of 

CAP. These parties have expressed their intent to work together as a group to consider all potential technical options for NGS in light of the many and complex interests implicated by a potential closure of NGS. 

NAVAJO NATION ENERGY POLICY 

The Navajo Nation has vast reserves of coal and derives a substantial amount of 

its royalties, rent, fees, tax revenue, and jobs and salaries from coal mining and production of electricity from coal. The Nation’s Energy Policy envisions coal production 

and coal-fired generation as key components of the Nation’s economy and its ‘‘energy 

mix’’ decades into the future. As a resource tribe, the Navajo Nation will seek to 

shape fossil fuel legislation as the Nation continues to adapt to the already changing 

regulatory environment. But coal, along with the other leading fossil fuels, i.e. oil 

and natural gas, will remain the dominant energy sources for the world through 

2035. 

Down the road, important to using the Nation’s coal will be development and deployment of clean-coal technologies, including sequestration and coal-to-liquid. However, these technologies require significant federal support, including governmental 

funding and incentives, before they can be reasonably implemented. In the meantime, and without such federal assistance and subsidies, federal environmental rulemaking and policy must reflect the real world costs and realities, including, where 

applicable, the federal trust responsibility to promote and ensure the economic wellbeing of resource based tribes like the Navajo Nation. 

The Navajo Nation supports renewable energy development as part of its overall 

energy portfolio and Energy Policy. The Nation will continue to seek to develop a 

‘‘cleaner portfolio’’ to include such renewable sources as wind, solar, and biomass. 

However, at this time, intermittent renewables are not sufficiently reliable to meet 

the Navajo Nation’s or the United States’ power needs alone. Additionally, renewable technologies still have very high capital costs and, in the case of both solar and 

wind, would require large land withdrawals on the Navajo Nation. Any such land 

withdrawals would have socioeconomic costs as well, affecting traditional uses of the 

land by Navajo People such as grazing. 

As a government responsible for the health and welfare of its people, the Navajo 

Nation believes that a determination of the future of NGS must be made in light 

of all relevant factors, including the environmental and health impacts of the plant. 

However, the current regulatory challenges facing NGS stem not from a healthbased rulemaking, but one designed to reduce visibility in national parks. Before potential health benefits of a visibility-driven rulemaking can even be considered, serious work needs to be done to establish a baseline for environmental health for the 

Navajo Nation. 

In the forefront of any discussion of the future of NGS must be consideration of 

the catastrophic economic impacts to the Navajo Nation and the Navajo People from 

any closure of NGS. Such discussions must consider the government-to-government 

relationship of the United States with the Navajo Nation, the federal trust responsibility over Navajo resources and to the Navajo people, and the critical role that coal 

production and coal-fired generation will continue to have for many, many years for 

the Navajo Nation’s economy. 

CONCLUSION 

The Navajo Nation’s economy depends on development of its energy resources. 

The Navajo Nation, like the rest of the world, also faces the challenges associated 

with energy dependency, including climate change, effects on our health and environment, and other impacts from energy development, including socioeconomic effects on the Navajo People such as changes in traditional land uses. As President 

of the Navajo Nation, I am regularly required to evaluate competing interests in 

making decisions that affect my people. I have given great thought to the issues surrounding coal-fired power generation on Navajo lands and I have decided that the 

Nation must work to secure the continued operation of both NGS and the Four Corners Power Plant. 

The Navajo Nation is blessed with a wealth of natural fossil fuels and renewable 

energy resources—resources we have the right to develop, and which we have the 

capability to manage. NGS is an essential component of the Navajo Nation’s economy and our energy portfolio, and must remain viable, for the sake of the Nation 

and our People, for years to come. I urge this Committee to take those actions within its power to make the viability and future of NGS a reality. 

Ahe’hee. Thank you. 

29 

Mr. MCCLINTOCK. Thank you, President Shelly. I now recognize 

The Honorable LeRoy Shingoitewa, Chairman of the Hopi Tribal 

Council, from Kykotsmovi, Arizona, to testify. Welcome, Mr. Chairman. 

STATEMENT OF HON. LeROY SHINGOITEWEA, CHAIRMAN, 

HOPI TRIBAL COUNCIL, KYKOTSMOVI, ARIZONA 

Mr. SHINGOITEWA. Thank you, Chairman. My name is LeRoy 

Shingoitewa, Chairman of the Hopi Tribe. I represent 12,000 members of the Hopi Tribe. I am very happy to be here today to speak 

on the concern that we have in regard to the Navajo Generating 

Station. 

As you know, there will be a ruling coming down from the EPA 

in regard to the Navajo Generating Station, which has a real concern for the Hopi people. Presently, 80 percent of our budget is the 

revenues that we generate through the coal mine, and that we sell 

coal and water to the Navajo Generating Station. 

Because of this the Hopi Tribe is able to provide the infrastructure, services and education, to our Hopi people. Today, I sit before 

you to ask that you will take a strong look at what the impacts will 

be to the Hopi people if the EPA does pass a ruling that will be 

very stringent, the BART ruling. 

It will have a devastating effect to us. As you know, Hopi is located in the northern part of the state. We are rural, and we are 

isolated. We are also landlocked, and the Hopis have lived in this 

area in the Black Mesa and the villages since 1100 A.D. 

Oraibi, which is the oldest continually inhabited village in North 

America, still exists today and part of it deals with the fact of the 

traditions that we have as our Hopi people. The nearest community 

to Hopi that is non-Indian is 80 miles away. We do not have the 

capability of doing economic development on our reservation. 

Our resources are very limited. Right now, we have no industrial 

development except for coal. So, coal is the essential part of the existence of our Hopi people. Therefore, we are asking that the ruling 

that is going to come down here be very carefully looked at. 

For four decades, we have provided coal and water to NGS. 

While the Hopi Tribe is not a formal owner, or operator of the NGS 

plant, our economic stability is dependent upon the revenue that 

is generated by that plant. 

Right now, 50 percent of our people are unemployed. Forty percent of our Hopi homes lack running water, or facilities that are 

for sanitary purposes. Yet, many of our Hopi people today still 

must haul water as was previously stated by our Congresswoman, 

and every day, many of our people on a daily basis must haul this 

water. 

The coal resources that we have, we cannot transport any other 

place except to NGS. We have no rail system to transport to sell 

to other people. Yet, when the EPA came out in 2010, we asked 

that it weigh its obligation as a trustee to support us and being 

very careful about their ruling. 

Yet, nowhere in the Federal Register was this ever mentioned. 

They mentioned the owners, and they mentioned the plant itself, 

and they mentioned the rate papers. Yet, Hopi’s request to be put 

30 

into the Register as having a dire impact on us was never mentioned. 

Therefore, we are asking that the EPA still maintain the fact 

that they are trustees for the Hopi people and for other native people. I do agree with the Congressman that it is up to us to regulate 

what we have, and if the Hopi people choose that we sell our coal 

to NGS, then let us do so. 

If the NGS ruling by the EPA is done, I will let you know that 

we will become true wards to this government. Then you must be 

able to live up to your trusteeship to support our existence. 

Without the revenue from the Navajo Generating Station, we 

will no longer be able to provide the services that we have, the education that we have, taking care of our people, and then in the end, 

we will not be able to maintain our homelands. Thank you. 

[The prepared statements of Mr. Shingoitewa follows:] 

Statement of The Honorable LeRoy N. Shingoitewa, Chairman, Hopi Tribe 

My name is LeRoy N. Shingoitewa. I am the Chairman of the Hopi Tribe and I 

represent over 12,000 members of the Hopi Tribe. I am honored to have been given 

the opportunity to speak on behalf of my people in expressing the Hopi Tribe’s view 

on the critical issue that faces you—balancing issues of tribal sovereignty, protection 

of the environment and the cost of the Nation’s energy policies to the people. 

My brief remarks concern the Navajo Generating Station (‘‘NGS’’) located in Arizona and effect of the Environmental Protection Agency’s (‘‘EPA’’) Best Available 

Retrofit Technology (‘‘BART’’) at the NGS’s plant facility. 

I have been made recently aware of Mr. Paul Orme’s, General Counsel to several 

water districts in Arizona, congressional testimony regarding the same subject and 

I will agree with Mr. Orme on one point ‘‘EPA’s ultimate BART decision will significantly impact the people and economies in and around Page, including the Hopi and 

Navajo Reservations. Their stories deserve to be heard. . .’’ but not with the Mr. 

Orme’s characterization of a ‘‘story’’, rather, it is our voice. . .the Hopi people and 

our story is not yet complete. 

In March 2010, the Hopi Tribe submitted written comments on the Environmental 

Protection Agency’s Rulemaking regarding Best Available Retrofit Technology for 

Nitrogen Oxide Emission at the Navajo Generating Station (Docket Number EPA 

–R09–OAR–2009–0598). I wish to introduce these supporting documents in conjunction with my testimony. 

As background for the sub-committees, the Hopi Reservation is isolated, rural and 

‘‘landlocked’’. The U.S. Census reports that approximately 7,000 Hopi people live on 

the Hopi Reservation. We have lived in our villages on the Black Mesa since prehistoric times. Of the twelve (12) Hopi villages, Oraibi is referred to by anthropologists as the oldest continuously inhabited settlement in North American, dating to 

at least 1100 A.D. 

The Hopi Reservation is ninety miles from any non-Indian community, thus limited access to any economic development centers is an understatement. The Hopi 

Tribe has no on-site industrial development and, other than coal, the Hopi resource 

base is extremely limited. In addition, the Hopi Tribe has chosen not to follow the 

path of other tribes which have built large gaming institutions to secure their economic stability; the voters of the Hopi tribe have rejected in two referenda. 

For almost four decades, the Hopi Tribe has provided coal and water to NGS. 

While the Hopi Tribe has not been a formal partner in the ownership and operation 

of the NGS plant, there is no question that the Tribe’s current economic security 

is fundamentally tied to the ongoing operation of the plant. 

More than eighty percent (80%) of the Hopi Tribe’s budget is dependent upon 

NGS derived revenues which in fact directly impact nearly every aspect of Hopi life, 

including the education of Hopi young people, health and social service programs, 

governmental infrastructure and many other essential tribal programs. 

We can recite the U.S. Census economic profile for the Hopi Tribe, almost 40 percent of the Hopi homes lack complete plumbing facilities, and more than 35 percent 

lack complete kitchen facilities. More than 44 percent of Hopi families with children 

under the age of 18 live below the national poverty level. The figure rises to more 

than 50 percent below the poverty level for families with children below the age of 

5 years old. I can visually illustrate that the living conditions on the Hopi reservaVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
31 

tion in the context of water consumption. Hopi per capital use of water—that is the 

amount of water used for all household, municipal, commercial and industrial development calculated on a per-person basis is one tenth of the use of a suburban community household. Many Hopi people still must haul their daily water supply in 

barrels in the back of their pick-up trucks from community wells. 

The Hopi Tribe’s coal resource is distant from rail transportation links that it 

would not be economically feasible to be sold to another buyer at this time. 

In 2010, the Hopi Tribe has asked EPA to weigh its obligations to the Hopi Tribe 

as a Trustee, however, in spite of our request, there has been no mention by EPA 

in the Federal Register of the economic impact of its decision on the Hopi Tribe. 

There is discussion concerning the economic impacts to utilities and other owners 

of the plant, and there is discussion of the impact on rate payers. In contrast, with 

respect to EPA’s Trustee relationship and responsibilities to the Hopi Tribe, there 

was no consideration whatsoever to the trustee relationship and the impacts of the 

decision on the Hopi Tribe. 

There is no mention that exercise of EPA’s authority would have severe and immediate economic impacts on the Hopi Tribe including rising unemployment, severe 

curtailment of social programs, slowing of capital advancements, weakened tribal 

government infrastructure programs, and other indirect economic losses. Finally, 

the implementation of the BART decision would undermine the Hopi Tribe’s ability 

to maintain its homeland. 

[A letter submitted for the record by Mr. Shingoitewa follows:] 

32 

Mr. MCCLINTOCK. Thank you, Mr. Chairman. Our final witness 

on the first panel is The Honorable Joseph Manuel, Lieutenant 

Governor of the Gila River Indian Community, in Sacaton, Arizona. 

Welcome. 


66648.001.eps
33 

STATEMENT OF HON. JOSEPH MANUEL, LIEUTENANT GOVERNOR, GILA RIVER INDIAN COMMUNITY, SACATON, 

ARIZONA 

Mr. MANUEL. My name is Joseph Manual. This is the day that 

the Lord has made. Let us rejoice. Thank you for the opportunity 

to address the Subcommittees today. Mr. Luja ́n, good to see you 

again, sir, and the great State of New Mexico. My eldest son still 

lives there, a music teacher, and music on the weekends. Mrs. 

Napolitano, good to see you again, Ma’am. Thank you. Mr. Gosar, 

it is good to see you, sir. Mr. Young, thank you, sir. Mr. McClintock, thank you, sir. Mr. Markey. 

I am Joseph Manuel, Lieutenant Governor of the Gila River 

Indian Community. We are an Indian Nation of over 20,000 members located near Phoenix, which is in Central Arizona. The community sees the issue before you today from the singular vantage 

point of the largest customer of the Central Arizona Project, or 

CAP Water Project. 

Critical to the community’s economy and culture, NGS plays an 

integral role in delivering Colorado River water to Central and 

Southern Arizona through CAP, and meeting Federal trust responsibilities under the Community’s 2004 water settlement. 

Should the cost of emission controls at NGS make CAP water 

unaffordable the community’s water rights would be significantly 

diminished, and it would suffer significant economic hardship. 

This result would be especially troubling given the clear history 

of my people, the Akimel O’Otham and the Gila River. Akimel 

O’Otham means the River People in my language. For generations 

the river sustained my people until it was taken away from us. 

So for us that history underscores the importance of our 2004 

water settlement, which took over 80 years or so to settlement, 

which ensures the dependability of water supplies to our reservation through the allocation of CAP water to the community each 

year. 

It also subsidizes the cost of delivering CAP water to the community, and to construct, operate, and maintain the facilities necessary to allow us to fully utilize our allocated water. 

NGS supplies approximately 95 percent of the power to deliver 

the CAP water to the community, and requiring NGS to install and 

operate costly technology to significantly increase the cost of CAP 

water. 

It would also decrease the future revenue generated for the fund 

created to reduce the community’s costs of obtaining and using its 

CAP water. These two impacts alone will substantially undermine 

the benefits that the community especially bargained for and relied 

upon in agreeing to settle our water claims in 2004. 

The community respectfully, but clearly, insists that the EPA uphold its trust obligations to the community under Federal law, and 

that any actions that the EPA may eventually desire to take must 

follow a full and proper study, and a full and proper consultation 

under EPA’s May 4th consultation policy, and must comport with 

the legal rights that the community bargained for in its water settlement. 

Farming the community’s lands is of great importance for cultural, and economic, and health reasons. In reliance on the availVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6602 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
34 

ability of affordable and dependable CAP water, the community is 

projecting to bring a hundred-thousand acres of community lands 

back into agricultural production. 

Currently, 40,000 acres are being cultivated. The practical impacts of increased costs of water could render the community’s efforts to reestablish our riparian lifestyle unattainable. 

The EPA could also inadvertently negatively impact efforts to reduce groundwater pumping and conserve water for Central and 

Southern Arizona. If the use of CAP water becomes too expensive, 

this renewable resource will become unusable, and farmers will be 

forced to use finite groundwater resources. 

Such an outcome would be unsustainable, and would degrade 

groundwater resources, and possibly renew old disputes between 

neighbors. Our water settlement was the culmination of many 

years of tough negotiations among the United States, the community, cities, and irrigation districts. 

The settlement was programmatic solution that relied heavily 

upon affordable CAP water, and it most not be jeopardized by administrative action that would violate significant and enforceable 

legal obligations to the community. 

Finally, to date, we have not had a full government to government consultation under Executive Order 13175. That consultation 

must begin as soon as possible, and must be meaningful consultation. 

At the end of the day, we ask that the United States keep its 

word and fully honor our trust responsibilities. Thank you for the 

opportunity to be heard. I am happy to answer any questions that 

you may have. 

[The prepared statements of Mr. Manuel follows:] 

Statement of The Honorable Joseph Manuel, Lieutenant Governor, 

Gila River Indian Community 

My name is Joseph Manuel and I am the Lieutenant Governor of the Gila River 

Indian Community, which is an Indian Nation located south of Phoenix, Arizona, 

encompassing 372,000 acres and approximately 20,000 tribal members. The Community also happens to be the largest single customer of Central Arizona Project (CAP) 

water. On behalf of the Community, I want to thank both Subcommittees for their 

continued interest in this issue that could have a very profound effect on all water 

users in the State of Arizona. In particular, I want to thank the members of the 

Arizona delegation for their support and efforts to have Congress take an active 

oversight role to ensure that the detrimental effects of the proposed environmental 

measures for the Navajo Generating Station (NGS) are taken into account by the 

EPA before it seeks to implement them. 

As the largest customer of CAP water in the State of Arizona, the Community 

has a significant interest in the outcome of the EPA’s NGS rulemaking. From our 

perspective, the EPA’s decision must be consistent with the legal rights that the 

Community specifically bargained for and that Congress specifically granted under 

the Arizona Water Settlements Act of 2004 (AWSA). The United States, including 

the EPA, must uphold its trust obligation to ensure the Community’s access to affordable annual deliveries of CAP water because the Community agreed to settle its 

water rights claims based upon the promise that affordable CAP water would be 

available to the Community on a long-term basis. 

The Community does not object to any pragmatic solution EPA may propose to 

ensure visibility in our national parks and wilderness areas. In fact, the Community 

is a leader in Indian country in developing its own air quality plan. In January 2011 

the EPA approved the Community’s Tribal Implementation Plan which was lauded 

by the Agency as ‘‘a blueprint of how to achieve improved air quality on the Community’s lands which will serve as a model for other tribes.’’ The Community is committed to protecting natural resources and has a 12 year history with EPA in develVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6621 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
35 

oping and implementing a Tribal Implementation Plan to protect air quality on its 

land. 

However, the Community is very concerned about the potentially catastrophic consequences for Arizona Indian tribes, especially for the Community, that could occur 

if EPA requires Selective Catalytic Reduction (SCR) as the Best Available Retrofit 

Technology (BART) for NGS. EPA’s BART determination for NGS has the potential—unlike any other Clean Air Act determination that we are aware of—to profoundly affect the economy and culture of the Community and all other similarly 

situated Arizona tribes with water rights settlements, the United States’ trust responsibility to these tribes, and rights specifically bargained for and granted in Federal legislation. Given that the EPA’s BART determination presents such grave consequences for the Community and other tribes, the Community is also troubled that 

EPA has not undertaken any formal consultation with the Community and other 

affected tribes. Instead the contacts with the Community have been limited to low 

level discussions between EPA and the Community and can hardly be considered 

consultation of the kind that should take place when the EPA is considering determinations that could have catastrophic implications for tribes in Arizona. To rectify 

this failure, the Community has formally requested that the EPA initiate such consultations immediately with all affected tribes in Arizona pursuant to the May 4, 

2011 EPA Policy on Consultation and Coordination with Indian Tribes. 

The Community believes EPA should acknowledge that NGS is unlike any other 

electrical generating facility in the Southwest. In addition to providing power to customers in Arizona, California and Nevada, NGS has two unique missions. First, 

NGS is critical to the economies of the Navajo Nation and the Hopi Tribe. The concerns of these two Tribes are best told by their leaders and I leave it to them to 

tell their story. 

Second, and critical to the Community’s economy and culture, NGS plays an integral role in delivering Colorado River water to Central and Southern Arizona 

through the CAP, and in meeting federal trust responsibilities under the AWSA and 

other Arizona Indian water rights settlements. Should the cost of emissions controls 

at NGS render CAP water unaffordable, the Community’s water rights would be significantly diminished and the Community would suffer significant economic hardship. It would be comparable to the original wrongs done to the Community when 

non-Indian farmers upstream on the Gila River illegally diverted the flows of the 

River to the point that it stopped running. The uniqueness of NGS should give EPA 

pause if it is considering any rulemaking that will undermine the economies of Arizona tribes, especially without first undertaking intensive consultation with these 

tribes. 

1. The Community’s Water Settlement 

From the beginning of time, the Pima Indians’ entire lives and identities involved 

the Gila River. We drank from the river, irrigated our farms, fished for food and 

depended on the River for many spiritual ceremonies. At the beginning of the 

1900’s, farmers upstream of the Gila River Indian Reservation (Reservation) diverted nearly all the water from the Gila River, depriving the Community of water 

to support the Community’s agricultural economy, and causing dramatic and detrimental changes to our diet, lifestyle, economy, culture and spiritual well-being. 

The Community began fighting for its water rights in the early 1930’s, and finally 

in 2004 Congress approved the Community’s settlement of its claims to water. This 

settlement was at the time the largest Indian water rights settlement in United 

States history. The Community’s settlement was enacted as law in the AWSA. In 

the settlement approved in the AWSA, the Community agreed to waive its claims 

to additional water from the Gila River in exchange for the promise of long-term 

affordable CAP water. The use of CAP water to fulfill the entitlements of the Community to Gila River water is an essential component its settlement because there 

is no meaningful way to take back the Gila River water that was rightfully theirs. 

The Community’s settlement allocates 311,800 acre feet of CAP water to the Community each year, making the Community the single largest CAP contractor. The 

Community’s settlement, through the AWSA, also provides funds to subsidize the 

costs of delivering CAP water to the Community, and to construct, operate and 

maintain the facilities necessary to allow the Community to fully utilize our allocated water. The AWSA’s funding mechanism is a fund, entitled the Lower Colorado 

River Basin Development Fund (Development Fund), which pays ‘‘annually the fixed 

operation, maintenance, and replacement charges associated with the delivery of 

[CAP] water held under long-term contracts for use by Arizona Indian tribes.’’ One 

of the sources of revenue for the Development Fund to pay these costs for CAP settling tribes is the sale of surplus power generated from NGS. 

36 

NGS supplies approximately 95% of the power to deliver the CAP water to the 

Community and other CAP customers. Requiring NGS to install and operate SCR 

technology as BART will both significantly increase the cost of CAP water and decrease the future revenue generated for the Development Fund. These two impacts 

will substantially undermine the benefits that the Community specifically bargained 

for and relied upon in agreeing to settle our water claims and claims against the 

United States. 

a. Increased Cost of CAP Water 

As the largest CAP contractor the Community will be impacted by the increased 

cost of CAP water more than any other entity in the State. Under the AWSA, the 

Community is entitled to a water budget from all sources of water of 653,500 acre 

feet per year. Of that 653,500 acre feet, 311,800 acre feet is CAP water. 

If SCR retrofit technology is required as BART, it could possibly increase NGS’s 

capital and O&M costs to the point of either closing the power plant or at least substantially increasing power costs, and thus the cost of CAP water for the Community. SCR would cost over 15 times more than LNB/SOFA—$660 million in capital 

costs, plus $13 million in annual operation and maintenance costs, according to estimates prepared by the Salt River Project. This increase translates to a very substantial additional cost for CAP water. Such increased costs for CAP water could 

cripple the Community’s ability to use this water, depriving us of the most significant single source of water confirmed by our water settlement. 

Assuming all the capital and O&M costs are passed through to the CAP customers on a proportional basis, the Community will bear the burden of paying between 20 and 25 percent of all the additional costs borne by CAP customers in the 

State. Imposing this kind of burden on a tribe that settled its claims for water on 

the promise of affordable CAP water would be akin to a second taking of the Community’s water supply, and the Community will not be able to sit idly by without 

taking every action available to it to fight such a breach of promise and trust. 

b. The Revenue to the Lower Colorado River Basin Development Fund will be Substantially Reduced by the Increased Cost of SCR 

Revenue from the sale of excess NGS power is to be used to supplement the Development Fund. A determination by EPA to impose SCR as the BART would substantially increase the cost of excess NGS power, essentially eating away any potential profit from such sales, thereby substantially eroding the revenues that the Community and other CAP settling tribes counted on to enable the Development Fund 

to subsidize CAP water delivery on a long-term basis. Not only does this impact the 

Community’s settlement, the loss of the revenue from the sale of excess NGS power 

threatens the continued viability of all current Indian water rights settlements in 

Arizona, and jeopardizes the ability of the United States to settle with other Tribes 

in on-going water rights settlement negotiations. 

It has been estimated that ‘‘the installation and operation of SCRs would reduce 

revenues to the Development Fund from the sale of surplus NGS power by about 

$9 million per year, or about $175 million, not including interest, between the assumed date of their completion in 2016, and 2036, the end of the assumed 20-year 

amortization period. The operation of SCRs would reduce Development Fund revenues by about $1.2 million per year thereafter’’ (Letter from David V. Modeer, General Manager, Central Arizona Project, to Colleen McKaughan, Associate Director, 

Air Division Region IX, Environmental Protection Agency, (December 18, 2009), 

page 8). 

The Development Fund established in the AWSA was one of the main points on 

which the Community based its willingness to agree to a resolution of its water 

rights claims, claims that were the largest in the State at the time. The importance 

of this funding source cannot be overstated. During Congress’ deliberations on the 

AWSA, the Community’s Governor was asked to testify on the importance of the legislation to the Community. In response to a question from Senator Bingaman as to 

the importance of the Development Fund in the framework of the Community’s settlement, Governor Narcia testified: 

The specific process for funding this settlement is absolutely, absolutely 

fundamental to our settlement. Without it, our settlement simply will not 

work....[T]he funding mechanism of this bill is the strongest possible affirmation that the Federal Government is serious about reaching a fair and 

binding settlement with every Arizona Indian Tribe that is willing to negotiate in good faith. For the first time, the United States will be able to negotiate with Indian Tribes in Arizona knowing that if they are able to reach 

a settlement they will have the revenue, a certain quantity of CAP water, 

and the resources to guarantee that the operations, maintenance, and the 

37 

replacement costs associated with that water can be paid for both for this 

generation and the next generation to come. 

Members of Congress expressly recognized this as well. Congressman Grijalva testified: 

In Indian Country today, one of the most difficult hurdles to tribes utilizing 

their water rights is the high cost of water project development. While the 

federal government over the years has helped facilitate and pay for non-Indian water projects, Indian Tribes have been left without such assistance. 

This legislation, however, provides a reliable funding source which will help 

pay the operation, maintenance and replacement costs associated with each 

acre foot of water. 

The guarantee of a dependable and affordable water supply and the funding for 

delivery infrastructure were key considerations for the Community in deciding to 

settle the Community’s water rights claims and its claims against the United 

States. As Governor Narcia testified to Congress at a Joint Hearing before the Subcommittee on Water and Power of the Committee on Energy and Natural Resources 

and the Committee on Indian Affairs in the Senate on September 30, 2003: ‘‘While 

our Community and each party to this agreement will make sacrifices to fulfill this 

settlement, we will do so in exchange for dependable supplies of renewable water 

and a more certain economic future.’’ Congressman Hayworth similarly recognized 

this, testifying in support of the AWSA that the legislation ‘‘is not a handout. It includes bargained for exchanges between all of the parties to the settlement.’’ 

2. EPA’s Trust Obligation 

The federal government has an express trust responsibility to protect the water 

rights that the AWSA provides to the Community. Section 204(a)(2) of the AWSA 

states: ‘‘the water rights and resources described in the Gila River Agreement shall 

be held in trust by the United States on behalf of the Community....’’ EPA, as an 

agency of the Federal government, cannot make a BART determination that limits, 

suppresses or otherwise undermines the Community’s right to receive and use its 

CAP water allocation guaranteed by the AWSA. Like all federal agencies and departments, EPA has a trust responsibility to ensure that the Community’s water 

rights, and the other guarantees and benefits provided in the AWSA, are preserved 

and can be implemented. 

EPA cannot, consistent with its trust responsibilities, impose a BART requirement 

that limits the Community’s ability to receive and use CAP water. Imposing SCR, 

however, would do just that, because it would inhibit and possibly eliminate the 

Community’s right to receive and utilize its allocation of CAP water guaranteed by 

the AWSA. Imposing SCR would make it extremely difficult, if not impossible, to 

pay for CAP water and would eviscerate the Development Fund revenue stream 

that subsidizes CAP water costs and pays for operation, maintenance, and replacement charges associated with the delivery of CAP water. Even more, imposing SCR 

would limit the Community’s ability to farm its reservation lands and its future economic development opportunities, and would negatively impact the livelihood and 

health of Community members. The implications of imposing SCR simply cannot be 

squared with EPA’s fiduciary obligations to the Community. 

3. EPA’s Obligation to Conduct Government-to-Government Consultation 

with the Community 

The EPA has not conducted government-to-government consultations under Executive Order 13175, a process that the EPA must engage in fully with the Community and other affected tribes. As of today, there was an initial meeting with EPA 

in February 2010 and another informal discussion with EPA in April 2011. Both 

meetings were limited in scope and are best characterized as information sharing. 

Moreover, the meetings lacked the participation of the Community’s elected leadership such as the Governor and Council. 

These meetings cannot be construed as consultation under Executive Order 

13175, because they did not amount to ‘‘meaningful and timely government-to-government dialogue with elected duly-appointed officials of tribal governments.’’ Pursuant to EPA’s May 4, 2011 Policy on Consultation and Coordination with Indian 

Tribes, created pursuant to the President’s November 5, 2009 memorandum directing federal agencies to implement Executive Order 13175, we have formally requested that the EPA undertake government-to-government consultation with affected Arizona tribes in order to discuss the implications to the Community in an 

appropriate forum. A copy of our letter to the EPA requesting this consultation is 

attached to our testimony. 

38 

4. Threat to the Community’s Culture and Way of Life 

It is the vision of the Community to return to a traditional lifestyle of farming. 

One of the primary uses of CAP water is for Community agriculture. Governor 

Narcia testified to Congress on this issue during AWSA deliberations before a Joint 

Hearing before the Subcommittee on Water and Power of the Committee on Energy 

and Natural Resources and the Committee on Indian Affairs on September 30, 2003: 

Together, the Settlement water and distribution infrastructure will enable 

our community members to farm tribal and allotted lands as well as provide them an opportunity to escape poverty and to participate meaningfully 

in the economy of the region. While there is little chance that we can recapture the prosperity of our ancestors, the settlement agreement will enable 

more tribal members to participate in our ancestors’ way of life. 

Farming the Community’s land is of great importance for cultural, economic and 

health reasons. In reliance on the availability of affordable and dependable CAP 

water, the Community is projecting to bring 146,330 acres of the Community’s land 

back into agricultural production. Currently, 40,000 acres are being cultivated. The 

Community Farms, corporate farms and individual Indian farmers currently cultivate fruits, vegetables, small grains, potatoes, cotton and alfalfa. Community members engage in more than 60% of all agribusiness activities. The practical impacts 

of increased costs of water could render the Community’s efforts to reestablish our 

agrarian lifestyle unattainable. 

In preparation for the increased farming and the water that is necessary for it, 

the Community is developing an expansive 2,400-mile irrigation canal system under 

the Pima-Maricopa Irrigation Project (P–MIP) to deliver water throughout the Community. P–MIP will not only sustain the agricultural economy but also meet the 

needs of the Community’s municipal and industrial water users and the establishment of riparian and recreational areas. In developing P–MIP, the Community has 

reasonably relied upon the delivery of affordable CAP water that was a central aspect of the Community’s bargain in settling its water claims. 

Finally, the CAP water is important for re-establishing riparian areas, where sacred plants can be grown for medicinal and cultural uses. Riparian areas will include plants such as cattails, devil’s claw and arrow-weed, which are used to create 

the famous and culturally-significant Akimel O’otham baskets and Pee Posh pottery. 

5. Interference with Water Conservation Efforts in Arizona and Agreements 

Among AWSA Settling Parties 

In its efforts to protect air quality in Northern Arizona, EPA could inadvertently 

negatively impact efforts to reduce groundwater pumping and conserve water in 

Central and Southern Arizona. The introduction of CAP water as a renewable water 

supply to Central Arizona has benefited the State of Arizona by assisting agricultural users in meeting regulatory objectives to reduce groundwater use, and has 

thus far facilitated the long-term availability of groundwater resources as a resource 

for future drought conditions. Being located in Central Arizona the Community is 

a strong supporter of efforts to conserve groundwater resources. If the use of CAP 

water becomes too expensive, this renewable resource will become unusable and 

farmers will be forced to use finite groundwater resources. Such an outcome would 

be unsustainable and would lead to degradation of groundwater resources and possibly renew old disputes between the Community and its neighbors. 

The AWSA was the culmination of many years of tough negotiations among the 

United States, the Community, cities and irrigation districts. It ultimately provided 

a pragmatic solution for all parties involved, but one which relied heavily on affordable CAP water. If CAP water becomes unaffordable because the EPA chooses SCR 

as the BART or otherwise issues a rule that shuts down NGS or makes CAP water 

cost prohibitive, the carefully woven water settlement that is the AWSA will quickly 

unravel. 

That the cause of this concern comes from an agency of the United States, its 

trustee and partner in so many successful programs, is not only frustrating to the 

Community but raises the specter of past broken promises that the AWSA was intended to remedy. On behalf of the Community, I urge the House Water and Power 

and Indian and Alaskan Native Affairs subcommittees to work to prevent the economic and cultural damage the EPA’s actions will have to my Community and other 

Arizona tribes, as well as the harm to the United States that would result from once 

again breaking its promise and breaching its trust responsibility to the tribes it is 

supposed to support and protect. 

[A letter submitted for the record by Mr. Manuel follows:] 

39 


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66648.013.eps
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Mr. MCCLINTOCK. Thank you very much, Lieutenant Governor. 

The time has come for questions of the panel. It is the Chair’s intention to do a single round of questions for the members of the 

first panel, and we will then bring up the second panel, and have 

a second round of questions, and then if Members desire, we can 

do a third round of questions involving everyone here. 

Also, we will be limiting each of the Members to five minutes as 

I discussed earlier, and with that, I will begin. President Shelly, 

the Ranking Member on the Natural Resources Committee, Mr. 

Markey, showed pictures of the Grand Canyon, and accused the 

Navajo Generating Station of creating all the haze on hazy days. 

I was just wondering what your reaction to that is, and specifically, what is the wind direction for the Navajo plant? Is that over 

the canyon or away from it? 

Mr. SHELLY. I believe the wind comes along the canyon. It goes 

from west to east in most cases, but the visibility that I have seen, 

I do agree that we have to see the canyon as it is when it is a clear 

day. 

But you can’t blame the power plant as a whole. We also have 

California. We have forest fires that accounts for a lot of those. As 

you know, in California, there are a lot of brush fires, and all of 


66648.014.eps
43 

these are happening, and so you can’t just blame the whole thing 

on a power plant, like NGS. That would be my answer to that. 

I do agree that we should see a beautiful sight in the canyon, but 

again we can’t just blame it all on the power plant. 

Mr. MCCLINTOCK. And what increase can we expect in air clarity 

with the $1 billion of additional costs that the EPA contemplates 

imposing upon the Navajo Station? 

Mr. SHELLY. For $1 billion upgrade, what the EPA is asking for, 

and with the cost being as it is, it probably will clean it up, but 

it still is not going to solve the visibility. We are still going to have 

that. 

At the time when that happens, we will probably be saying to 

ourselves that I guess they were right, and that it was not the 

power plant causing the problem. It was something else. But again 

with $1 billion, you are spending a lot of money. With that kind 

of money, what can I say. 

Mr. MCCLINTOCK. Well, the information that has been submitted 

to the Committee is that after spending $1 billion plus on this additional increment of regulation of the Navajo plant, the increase 

in visibility will be so slight that it will not be detectable by the 

human eye. Is that your understanding? 

Mr. SHELLY. Probably not, because you are going to wind up 

dealing with other sources that will probably come down the canyon, and like I said, you probably would. What you see now is that 

it would be clear one day and visible, and at other times, it 

wouldn’t be. 

So for some reason, if there is a clear day, visibility was clear, 

even though the plants were going as it is. So again I don’t know 

how to answer that, but again it depends on the wind and how fast 

it blows and clears the air, I guess. So the wind, the smoke, or the 

haze, whatever it is, I guess that is what I will say. 

Mr. MCCLINTOCK. The Ranking Member also told us that this is 

simply partisan hysteria, and that these are akin to doomsday predictions, and that imposing another billion dollars of costs on the 

plant will have no serious impact on its operations, and he says it 

is just too profitable. What is your response to that? 

Mr. SHELLY. Doomsday? Well, met just answer it in some other 

way here, is the best way to answer it. We always hear this, and 

that somebody is always coming out with the end of the world is 

coming and for me as an Indian, I know that the end of the world 

will come when you start seeing other animals, birds, and stuff disappearing. Then you will know that it is coming. 

But again for the doomsday for the plant, it is something that 

we have to really give a thought to. Doomsday will come if they 

close the plant down, and a lot of people are going to lose work, 

their jobs, and the economy and hardship is going to happen. 

Mr. MCCLINTOCK. Chairman Shingoitewa, any thoughts? 

Mr. SHINGOITEWA. Yes, I just want to say, too, that I agree with 

President Shelly. There are other mitigating factors as to why 

there is haze. My 67 years that I have lived, and I live in the Village of Moenkopi on the western side of the Hopi Reservation. 

Even prior to the NGS plant being built, a haze began to come 

as automobiles started, and having been to California and watching 

44 

it, haze has developed over all these years. I think to blame one 

component of contributors is very difficult to do. 

So I think that we have to be very careful that as we look at 

what has to be done to fix up emissions, I think realistically that 

you have to look at what is happening. And like I said, I think that 

one of the things that we have to look at is that how much will 

really be cleared up putting all the retrofitting in. 

Mr. MCCLINTOCK. Thank you. 

Mr. SHINGOITEWA. Throughout the United States, it has been an 

issue not only at NGS, but everywhere else that we have had 

issues with emissions. 

Mr. MCCLINTOCK. Great. Thank you. Mrs. Napolitano. 

Mrs. NAPOLITANO. Thank you, Mr. Chairman, and I kind of agree 

with you that in California that there used to be a lot of smog, but 

they have put in mandatory catalytic converters way back 30 or 40 

years ago. So that is not the issue in California as much as it is 

in other areas. 

But I understand the plant is considered the third west of the 

Mississippi in pollution, the third highest. So there has got to be 

something there that is affecting the health of the States in those 

areas, the tribes, and the environment, et cetera. 

There are other things that need to be taken into consideration 

that are real critical. To President Shelly and Chairman 

Shingoitewa, do you think that the Navajo and Hopi have to choose 

between protecting your water rights, improving environmental 

conditions on the reservation, while ensuring that water and 

energy is affordable. 

And by the same token do you believe that there is a way to 

work with the Administration and the Federal agencies so that you 

don’t have to choose in protecting those rights? 

Mr. SHELLY. You know, Congresswoman, I would like to put it 

in certain ways here. I really don’t want to get into the subject of 

water at this point. We are negotiating water rights between the 

two tribes, and I would like to just kind of keep it that we always 

believe as Navajos that our environment is very important with our 

water thing. 

And we do cherish that, as that is part of our tradition and culture, and we hope that we will uphold through our negotiations, 

and those will probably be mentioned, and I will leave it at that, 

and try not to go too heavily into talking about water. So we are 

still in negotiations on that. 

Mr. SHINGOITEWA. Well, the Hopi, it is always our belief that we 

be caretakers of the earth and to the sky, and so in this world 

today, we have had to try to learn to balance the environments. 

We have had to learn to live on both sides of the fence. If we 

were to traditionally live our way, we would do away with many 

things. Yet, in today’s real world, we have to survive as Hopi people. We have to look at the generations to come. How will we be 

able to sustain and maintain a balance so that we are able to live 

in two worlds. 

To me, in this type of issue, as the modern world changes, it also 

brings other things. I have always believed that when you take a 

transition and learning something new, you give up something in 

return. 

45 

So for us natives, we have to learn what is best for us at this 

stage, and as I earlier said, in order for the Hopi people to survive, 

we also must sell natural resources. At this stage, we are very limited. 

If we don’t do our part to sustain a viable economy, then our people would have a hard time surviving in today’s world, but we do 

have to do our part. 

Mrs. NAPOLITANO. Thank you for that answer, Mr. Chairman, 

but shouldn’t there be no necessity for you to choose, and that you 

should all work together with the Federal agencies? 

Mr. SHINGOITEWA. Yes, and I think that this is where it was 

talked about consultation. 

Mrs. NAPOLITANO. Right. 

Mr. SHINGOITEWA. That is a critical portion of it. 

Mrs. NAPOLITANO. Which is my next question to you, is have you 

approached the EPA, and if so, when, about your concerns regarding your relation to your water rights settlement? 

Mr. SHINGOITEWA. Well, we have talked, as far as the Navajo 

Generating Station. We submitted comments in March of 2010. We 

believe that the Hopi Tribe’s comments had a bit impact on holding 

back on the final ruling that came down on NGS, because at the 

time, they did not think about the economic impacts that it would 

have on our tribe. 

They were looking at only what would happen if they tried to 

clean up the air. 

Mrs. NAPOLITANO. Well, in that mix, Mr. Chairman, were they 

taking into consideration the amount of time there that they are 

drafting out of your aquifer and the pollution of the water bodies 

that are left behind that may be contaminating your rivers, your 

streams, and your aquifers? 

Mr. SHINGOITEWA. We are at this stage—well, I could not give 

you a definite answer on that because at that point in time, we 

were not dealing with—and as President Shelly said, we were not 

dealing with the water portion of it. We were dealing mainly with 

the air quality that NGS was supposedly causing. 

Mrs. NAPOLITANO. I know, but NGS uses an inordinate amount 

of water to be able to extract the coal, and to make it into slurry. 

Mr. SHINGOITEWA. We don’t do slurring anymore. That slurring 

was done in the Mojave plant. 

Mrs. NAPOLITANO. OK. 

Mr. SHINGOITEWA. Yes, the coal that is done is brought down in 

conveyor belts, and put on to an electric train, and then it is taken 

over to Page. 

Mrs. NAPOLITANO. OK. I will wait for the second round, Mr. 

Chairman. Thank you. 

Mr. MCCLINTOCK. Mr. Gosar. 

Dr. GOSAR. President Shelly and Chairman Shingoitewa, I understand that tribal consultation is very important, and it goes to 

health care from the NIHS to the BIA, as well as to the EPA. So 

I want to get something straight for the record. 

The EPA’s response to the Minority’s questions indicate that the 

agency has initiated a consultation within your tribes. Is this true? 

Mr. SHELLY. Yes, it is. I would like to say one thing. We have 

met with Region 9 in San Francisco, and it was a very positive 

46 

meeting. It was a tribal consultation. I have my Navajo EPA here, 

Steve Etsitty, and Attorney General Harrison Tsosie, and we all 

went down there and my energy advisor, who is here, Samuel 

Wood, and we had a good consultation. 

The support was there, and we all understand that we need to 

agree that if there are any rule changes, that we should be contacted. They need to work with the Navajo EPA and also the 

USEPA, because we are all implementing Federal policy, and they 

should be uniform, as one. 

So the same thing happened with Region 6, which we met in Albuquerque, and we talked about the San Juan Power Plant, and 

also in Dallas, through telecommunications, we all talked and met 

with their EPA from up there. 

So the dialogue is starting to happen. I am enjoying it, and I 

would like to continue doing that, and that the USEPA should 

work with the Navajo EPA. And the question about the water thing 

and the environmental issues. 

Our Navajo EPA and our Navajo Clean Water Systems, we do 

have those in place, and so we kind of monitor that ourselves. We 

have that capability, and we monitor it like the USEPA, because 

we have Federal policy that covers that, and we follow that. 

Dr. GOSAR. Thank you. Mr. Chairman. 

Mr. SHINGOITEWA. Representative Gosar, we initially made our 

contact in 2010. At the time the new regional director, Jackson, 

had just come into office. She met with us in Phoenix, and at that 

meeting it when we told them as they were coming out of the concerns that we had. 

And at that point in time, they extended the time for comment. 

So from that point to this point, they have given more time now 

to analyze the concerns from the Hopi Tribe’s side of what we had. 

So that has been a consultation that we have had with the EPA. 

In other subjects throughout with clean water, and with drinking 

water, et cetera, there is a continual dialogue on other issues that 

we do deal with on the Hopi reservation. 

Dr. GOSAR. Thank you. Lieutenant Governor Manuel, the EPA 

letter states that the Gila River Indian Community submitted a 

consultation request with the EPA. Did the EPA respond with a 

formal consultation with you? 

Mr. MANUEL. The Executive Order 13175 initiated by President 

Clinton at the time called for consultation with Indian tribes, and 

the Obama Administration has done a lot of consultation with the 

tribes; the Bureau of Indian Affairs, IHS, and a lot of the cabinet, 

Labor, Health, et cetera, and Human Services. 

But we did receive a letter on May 4th, just this month, from the 

EPA referencing that they have a consultation policy, and that is 

good. We did respond to that, and invited them to conduct a consultation with regard to the NGS issue, because we want to start 

in this consultation every step of the way until the finality of it at 

some point. 

And then we can discuss all the issues, and put everything on 

the table, and it would be more meaningful in the end, and the end 

result. But there have been no consultation meetings with the community. 

47 

Dr. GOSAR. Well, late arrivals. That is what I thought. You know, 

the opposition, and I am running short of time, but just a yes or 

no, but the opposition has said that closing the power plant, what 

we can do is use renewables, and that has been a problem as well, 

because we have had the NEPA process being delayed over and 

over again. 

Is it possible in your own mind that we can take away the 

Navajo Generating Station and supplant it with renewables right 

now, or at least in the next 10 years? President Shelly, real quickly. 

Mr. SHELLY. Yes, Congressman Gosar, let me answer your other 

question about consultation with the EPA. 

Dr. GOSAR. I am afraid that I don’t have time for that question. 

Mr. SHELLY. The Navajo Nation asked for time for a consultation, and so that what happened. What was the question again, 

Congressman? 

Dr. GOSAR. Is wind or solar a viable option? If we shut down the 

Navajo Generating Station can we replace it with renewables right 

now, or in the next 10 or 15 years? 

Mr. SHELLY. No. It is a small amount. 

Dr. GOSAR. Just yes or no. We are over time. 

Mr. MANUEL. No. 

Dr. GOSAR. Thank you. 

Mr. MCCLINTOCK. Thank you. Mr. Grijalva. 

Mr. GRIJALVA. Thank you very much, and gentlemen, welcome, 

and thank you for the leadership that you provide your communities. If I may, Vice Chairman, let me ask a little bit, because we 

all went through that water settlement process. 

It was lengthy, difficult, and the resolution that Congress passed 

in terms of a settlement was a very important milestone in settling 

not only claims, but providing some certainty. 

And as one of the largest, if not one of the largest recipients, in 

terms of allocations on that settlement of the Gila River Community, can you talk about what impact that settlement has relative 

to the discussion that we are having with the generating station? 

I don’t want to make it an either/or, but to some extent, they are 

linked, and maybe you can talk about that linkage. 

Mr. MANUEL. Well, the health and the future of the tribal people 

depend upon being able to cultivate our lands. We traditionally are 

an agricultural people. When the waters of the Gila River were illegally diverted and our tribal members had to dramatically change 

their diets to one of the cheap processed foods, this devastated our 

community and resulting in our people developing one of the highest rates of diabetes in the world. 

We are still suffering the consequences of the illegal taking of 

our waters, but we are using our settlement water to refocus on 

our way of life back to agriculture and traditional foods. 

Our access to affordable CAP water was guaranteed to us in the 

2004 law, and is critical to the long-term health of my people. If 

we lose access to the affordable CAP water, we won’t be able to 

continue to cultivate our lands. 

Mr. GRIJALVA. And much of the discussion is now and will be in 

the next panel the either/or proposition. Either we have the Navajo 

Generating Station and as it functions now, or you don’t. So you 

48 

have worst case scenarios, and I really believe in the comment that 

somebody made that it is not an either/or proposition. 

That the vitality of the generating station is vital to the region, 

but at the same time, as all of you indicated, there is a responsibility in terms of the environmental cleanup, if necessary, and how 

that gets transitioned, and what appropriate accommodations, realistic accommodations, happen. 

I don’t think that it is going to be shut down, but I also think 

that the EPA has to do a couple of things in terms of Native Nations that are affected by any decision, and that is an appropriate 

and formal consultation, government-to-government, period. 

And if that has not been done to the letter that it should, then 

it has to be done because there are significant issues of sovereignty 

and trust responsibilities that must be dealt with by the Agency. 

And, too, I think that regulations, whether it is this one that we 

are talking about, or whether it is NEPA, the Antiquities Act, the 

environmental assessments and statements, they are all a part of 

the process. 

And for us to say that all of those need to be eliminated in order 

to provide some assurance I think is a dangerous step backwards, 

given the commitment that the nations before us have to the environment and to the earth that they inherited, and we occupy now. 

So as we go forward, Mr. Chairman, and Ranking Member, I 

think that we need to work with the agency, not in an either/or 

proposition, but in a realistic accommodation that deals with all of 

the factors here that provide certainty and security for the Nations 

that are before us today, and other stakeholders, and at the same 

time doesn’t jeopardize both the economy of the area, and the longterm environmental protections that have to be in place. 

I think that it can be done. If we make it just a simple fight between either/or, there is going to be a loser, and in this instance, 

there should not be a loser. So, with that, let me yield back, Mr. 

Chairman, and I appreciate you calling this hearing. 

Mr. MCCLINTOCK. Mr. Quayle. 

Mr. QUAYLE. Thank you, Mr. Chairman. And thank you all for 

being here. Lieutenant Governor Manuel, I just have a couple of 

questions for you. As you know, the EPA is really charged with 

protecting the human health and the environment for writing and 

enforcing regulations. 

But these regulations have to be based on actual laws that have 

been passed by Congress. Now, the EPA seems to be focused on 

complying with a really broad interpretation of the Clean Air Act, 

but my question is have they yet to acknowledge to the community 

that the 2004 Arizona Water Settlements Act needs to be complied 

with as well? 

Mr. MANUEL. No. 

Mr. QUAYLE. So they have not talked to you at all about that in 

terms of complying with the Water Settlements Act, but yet they 

are going with the broad interpretation of the Clean Air Act? 

Mr. MANUEL. Correct, and also the community is the only nation 

at this time that has a tribal clean air program that was approved 

by the EPA just last October. So we are all for the Clean Air Act 

as we move forward, because we know in Arizona, and in our area, 

49 

that the PM-10, et cetera, that there is pollution in the Phoenix 

metro area, and the Pinal and Maricopa Counties. 

But we just passed this program for the Clean Air Act, and so 

we are all for that. However, I think that because the EPA is a regulatory body, they feel that—and I think that they feel that they 

are a regulatory, and they are just going to do whatever they want 

anyway. 

But they shouldn’t because in dealing with these specific areas 

of the NGS, that is why it is important that we do this consultation 

process, and that they do it so that it is all on the table as we get 

to that end, whenever that is, and then we can have a better logical and reasonable study to come out with the best decisions. 

Mr. QUAYLE. And just keeping in mind that the Water Settlement Act was just a mere six or seven years ago, because some opponents have really testified that the owners of the plant and the 

CAP are thwarting the tribes. 

Do you think that it is fair to say that the Federal Government, 

and in this case, the EPA, if it took action that actually led to the 

closure of the plant, that the Federal Government would be breaking a legal promise that it made to you less than 10 years ago? 

Mr. MANUEL. Yes. Yes, they would, and as a matter of fact, if the 

EPA actions failed to protect our rights under the 2004 laws, we 

would be forced to bring litigation against the United States. That 

is not our desired result, but one that we will be forced to take. 

We understand the need to improve air quality, and in fact the 

Committee again has the Tribal Clear Air Program, and with the 

health of our people, and our economic livelihood depend upon affordable water. 

It does not make any sense for the EPA to take action that exposes the United States to significant and unnecessary liability, 

and the Committee wants to avoid that result. But we have to protect our people. 

Mr. QUAYLE. OK. Thank you very much. I yield back. 

Mr. MCCLINTOCK. Mr. Luja ́n. 

Mr. LUJA ́ N. Mr. Chairman, thank you very much. To the leaders 

who are here today, does anyone know how much revenue is generated from The Navajo Nation’s generation facility? 

Mr. SHINGOITEWA. I just know how much we get, as far as revenue for the Hopi Tribe. 

Mr. LUJA ́ N. And how much is that, Mr. Chairman? 

Mr. SHINGOITEWA. We get right now about $13 million in revenue. 

Mr. LUJA ́ N. And that is from the purchasing of the coal at 

Kayenta? 

Mr. SHINGOITEWA. Yes, and water, right. 

Mr. LUJA ́ N. Do we know how much Peabody makes on the coal 

that is taken out from Kayenta and sold to the generation stations? 

Mr. SHINGOITEWA. I could not answer you on that. 

Mr. LUJA ́ N. If I am not mistaken, Mr. Chairman, from some of 

the information that I have, and we don’t have a dollar amount on 

how much revenue is generated from the coal taken out, but it is 

8.1 million tons of coal annually. 

I don’t know if maybe the staff later on, Mr. Chairman, might 

be able to help get me a value for what that is. I just want to make 

50 

sure, Mr. Chairman, that as we are talking about the future of 

energy generation, and the viability of the coal, because if I am not 

mistaken, the contract for the coal is for as long as the coal lasts, 

until 2026, or until the coal runs out. 

And to make sure that the Hopi are being treated fairly and equitably for these resources as well. And, President Shelly, because 

the generation facility is on the land of the Navajo, is The Navajo 

Nation part-owners of The Navajo Nation generating facility? 

Mr. SHELLY. No. Do you want me to go further on that? 

Mr. LUJA ́ N. Please, Mr. President. 

Mr. SHELLY. As you know, SRP is the operator, and 24 percent 

is what the Bureau of Reclamation owns in that, and that is what 

I have. 

Mr. LUJA ́ N. So, Mr. President, the revenue coming to the Nation 

is through the lease of the land; is that correct? 

Mr. SHELLY. Yes, sir, and royalty from the coal. 

Mr. LUJA ́ N. And royalty from the coal. But it is not necessarily 

tied to the profits being generated from the generation facility? 

Mr. SHELLY. No. The Navajo Nation workers are employed there, 

and so they do labor wise and they are being helped. 

Mr. LUJA ́ N. Very good. And I think it is important because, Mr. 

President, I know that we had a conversation recently about the 

work that needs to be done to be able to get power to the homes 

on the Nation that currently don’t have power. 

And even at the opening of the spring session, many of the council delegates talked about the importance as well of making certain 

that we got electricity to the many homes of the Nation that don’t 

have power today. 

And I would just say, Mr. Chairman, that as we talk again about 

the future of the viability here, that one, that I hope we are able 

to get a witness from Peabody. I know that they are not here today 

on the roster, and to find out the revenues and the equitable treatment from the contracts. 

And to make sure that the revenue going to our tribal brothers 

and sisters is one that is fair, and maybe one that we can help look 

at. But also that maybe we can have some agreement, Mr. Chairman, between the Members of the Body that we also look at Indian 

rural electrification if you will. 

And in the same way that we saw rural America be able to benefit from the distribution of power lines, and to be able to get 

power to rural homes that would have never otherwise gotten it, 

and to have a similar approach in our United States if you will for 

The Navajo Nation. 

So that we can work together to get that power, those electrons, 

whether we talk about whatever generation that we are going to 

be able to move to, because I think there may be a disagreement 

among all of us, Mr. Chairman, on the type of generation. 

But I would hope that we could agree that we can work together 

in Arizona, in New Mexico, and in Utah, to be able to get power 

moving into these homes, if there are 18,000 homes without electricity now, and 40 percent of the homes without water. 

And I know, Mr. Chairman, as we also look at the viability of 

economic opportunity, and again going back to water, because as 

we have seen with our brothers and sisters down in Arizona, as 

51 

well as on The Navajo Nation, I know that the chairman, the president, and many others of the Navajo Elders, have shared stories 

with me of when those cattle would run fat, and the sheep herds 

were huge, and you would see that rolling and grazing land. 

Not just like we see in Napi right now, Mr. President, but all 

over the nation, and to see what we truly need to do to get to that 

point. And it is going to mean being able to get the power so that 

they can pull the water out of the ground with the wells. 

Because until then, we are going to still be up against the wall, 

Mr. Chairman, and so again I appreciate the conversation, and I 

hope that we can get to some agreement here. Thank you. 

Mr. MCCLINTOCK. Thank you. Mr. Markey. 

Mr. MARKEY. Thank you, Mr. Chairman, very much. So the EPA 

in their letter of May 20th says that the EPA has not proposed to 

close the Navajo Generating Station. EPA’s goal is to conduct a 

thorough analysis to determine on a case by case basis the appropriate level of control so that they can work with all of the concerned parties in order to ensure that the right solution is reached. 

So here is the interesting kind of context to put this in. By 2014 

the EPA projects that 83 percent of all coal plants in the United 

States will have low NOx burners, and over-fire air will be installed 

in 83 percent of the capacity of the United States plants, and selective catalytic reduction will be installed in 47 percent of the installed capacity. That is by 2014. 

So they are heading toward having all of the facilities in the 

country be covered. So what they say here in the letter is that they 

intend on ensuring that these three power plants are treated no 

differently than any other power plant in the United States, and 

that they want to work to create a process to make sure that the 

same environmental technologies are installed here as they are 

going to mandate over the next several years to every power plant 

in the country. 

So do you have any problems with ensuring that these technologies are installed as they are in all other power plants as long 

as they use a process that ensures that they are negotiating to ensure that it is done in a way that is compatible with your interests, 

Mr. President? 

Mr. SHELLY. Yes, and this is the first time that I heard that the 

EPA gave you some option. We have not been getting that. The 

Navajo Nation is in support of low NOx and sulfur, and that is why 

we are in support of that. 

But now I understand where you are being told that it can go 

from low NOx, and based, and supported in phrases. I think my reports here, and my talking point was that a phase-in approach is 

what we support. 

And there are numbers of years where compliance will come, and 

we have been talking about that with the nation, and The Navajo 

Nation does support low NOx. 

Mr. MARKEY. It says, too, that the EPA did not discuss any scenarios in our announced proposed rulemaking that involves the 

closing of any of the boilers at the Navajo Generating Station because it is not the EPA’s intention to require a shutdown, directly 

or indirectly, of any of the boilers at NGS. 

52 

So their goal clearly is to work with you because they are going 

to require every other power plant in the United States as well. It 

is just part of a national standard. So assuming that is the case 

do you have a problem with working with the EPA toward achieving that goal so that you are in compliance, along with every other 

power plant in the United States? 

Mr. SHINGOITEWA. Well, Congressman, I guess if I had received 

that letter, then I would have understood it, but we have not received it. 

Mr. MARKEY. OK. 

Mr. SHINGOITEWA. And I think in answer to that also is that unlike the President, low NOx burners are those things that we have 

to work with, and we do support that concept. But again like I 

said, I think that if the EPA had told us this, then this would have 

helped us to ease some of our questions. 

Mr. MARKEY. Well, we are going to get you a copy of the letter 

so that you each can see it, but I think it should be reassuring to 

you that the EPA is making it clear that their goal is not to shut 

down any boilers, but to work with you to accomplish the goal. 

And, Lieutenant Governor, do you have a comment? 

Mr. MANUEL. Yes. Mr. Chairman, and Mr. Markey, with regard 

to that letter, dated May 20th, and I guess that is Friday, and of 

course we were here Sunday, but that is good, and then what the 

EPA is saying is that they will go through a consultation policy 

process, and that is good. 

But I just want to reiterate that the committee would support 

any pragmatic solution to the concerns of the EPA and others 

about NGS so long as it protects the rights of the community, and 

doesn’t jeopardize its water settlement. 

Mr. MARKEY. Yes, but you are not looking to avoid compliance. 

You just want to make sure that it is done in a way that the boilers 

are not shut down. Is that the key? 

Mr. SHELLY. Excess costs will shut down the plant. That is in my 

report. 

Mr. MARKEY. Yes, but you are not looking for a special exemption 

from the way that all the other power plants in the country are 

being viewed? 

Mr. SHELLY. No. 

Mr. MARKEY. OK. Thank you. 

Mr. MCCLINTOCK. We will have a third round of questions involving both panels if there is interest in the Committee. I would like 

to thank this panel for its testimony, and would ask you if you can 

to stick around for the third round of questions. I would like to 

bring up the second panel now. Thank you again for joining us. 

I have been informed that we are going to have votes sometime 

between 4:15 and 4:30. So if we are lucky, we maybe able to get 

through all of the witness statements before we have to recess 

again. 

[Recess.] 

Mr. MCCLINTOCK. Thank you. We will now hear from our second 

panel of witnesses. I would like to begin by recognizing Mr. William Justice, the former Mayor and Member of the Page Planning 

and Zoning Commission, from Page, Arizona, to testify. Welcome, 

Mr. Justice. 

53 

STATEMENT OF WILLIAM JUSTICE, FORMER MAYOR AND 

MEMBER PRO TEM, PAGE PLANNING AND ZONING COMMISSION, PAGE, ARIZONA 

Mr. JUSTICE. Thank you very much. Mr. Chairman, and Members of both Committees, thank you for the opportunity to address 

the Committees regarding the concerns of our community, Page, 

Arizona. 

The Navajo Generating Station is located just outside our city 

limits of Page, a remote Southwestern United States town, with 

about 7,500 people. We provide the housing and support services 

for a majority of the employees of NGS, Peabody Energy, and the 

support services of these companies, as well as the retail ability for 

nearly all employees of NGS, as well as a majority of the coal miners who work on the Black Mesa of The Navajo Nation, and the 

joint use area of the Hopi Tribe. 

The Page economy is based on two items, tourism and power 

generation, and as a resident of Page, you either service tourism 

or power for employment. Our view of the environmental efforts installed and planned by the Salt River Project and the other owners 

of NGS are sufficient in meeting the environmental needs of our 

area of the United States. 

We feel that the undue costs of systems that would provide a 

negligible result in pollutants would lead to a catastrophic consequence to our part of the region by the closure of NGS. 

Our view on the short and long-term effects on Page, Arizona, 

The Navajo Nation, the Hopi Tribe, Coconino County, and the 

State of Arizona, would leaves a devastating destruction on the economic, and educational, and the overall pursuit of the American 

dream, and would deny the inhabitants of this isolated area the 

ability to recover our livelihood, and where visitors enjoy their vacations when they come there. 

Having been a witness to the dire results of the closure of the 

Mojave Generating Station in Laughlin, Nevada, and the loss of 

jobs to the coal miners in our area, resulted in the destruction of 

families by parents being uprooted to meet the financial responsibilities of their families, as well as the undermined ability for 

children to pursue their educational desires, and further provide 

for an area in great need of individuals to bring us into the 21st 

century. 

Personally, my Navajo wife and I both lost our jobs because of this. We went from a family earning about $140,000 a year to a 

family earning nothing, a dilemma that was felt many times by 

many families. 

In an area where the unemployment rate far exceeds the national averages, the obvious result on our economy would be tremendous. Our school system would lose a significant tax base, and 

a large portion of our general population would most likely become 

wards of the State and of the United States. 

Not only will this affect Page, but the surrounding reservation 

communities of LeChee, Kaibeto, Kayenta, Coppermine, Bitter 

Springs, and Cedar Ridge, and many more. How could such a great 

public/private partnership that provides such a valuable resource 

and base of employment be shut down due to negligible aesthetic 

concerns? 

54 

There are no such health issue gains to be accomplished. Who 

has the capital investment to replace this power within the next 10 

years? This just does not appear to make good health or economic 

sense. 

We truly hope the results of these Committees’ hearings will lead 

to an economical continuation of NGS, therefore ensuring a financially successful existence of the inhabitants of our community and 

surrounding area. Thank you for your time. 

[The prepared statement of Mr. Justice follows:] 

Statement of The Honorable William S. Justice, Former Mayor of Page, 

Member Pro Tem of the Page Planning and Zoning Commission, Page, 

Arizona 

Mr. Chairmen and Members of both Committees. Thank you for the opportunity 

to address the committees regarding the concerns of our community, Page, Arizona. 

Navajo Generating Station is located just outside the city limits of Page, Arizona, 

a remote Southwestern United States town with about 7,500 people. We provide the 

housing and support services for a majority of the employee’s of NGS, Peabody Energy, and the support services of these companies; as well as the retail ability for 

nearly all employees of NGS; as well as, a majority of the coal miners who work 

on the Black Mesa of the Navajo Nation and the joint use area of the Hopi Tribe. 

The Page economy is based on two items, tourism and power generation. As a resident of Page, you either service tourism or power for employment. 

Our view of the environmental efforts installed and planned by Salt River Project 

and the other owners of NGS are sufficient in meeting the environmental needs of 

our area of the United States. We feel the undue cost of systems that would provide 

a negligible result in pollutants would lead to a catastrophic consequence to our part 

of the region by the closure of NGS. Our view on the short and long-term effects 

to Page, AZ, The Navajo Nation, The Hopi Tribe, Coconino County, and the State 

of Arizona, would leave a devastating destruction on the economic, educational, and 

the over all pursuit of the American Dream and would deny the inhabitants of this 

isolated area the ability to recover their livelihood or visitors enjoy their vacation. 

Having been a witness to the dire results of the closure of the Mohave Generating 

Station at Laughlin, NV, the loss of jobs to the coal miners in our area resulted in 

the disruption of families by parents being uprooted to meet the financial responsibilities of their families as well as the undermined ability for children to pursue 

their educational desires to further provide for an area in great need of individuals 

to bring us into the 21st Century. Personally, my Navajo wife and I both lost our 

jobs because of this. We went from a family earning about $140,000 a year to a family earning nothing. A dilemma that was felt many times by many families. 

In an area where the unemployment rate exceeds national averages, the obvious 

result on our economy would be tremendous. Our school system would lose a significant tax base, and a large portion of our general population would most likely become wards of the State and the United States. Not only will this effect Page but 

the surrounding reservation communities of LeChee, Kaibeto, Kayenta, Coppermine, 

Bitter Springs and Cedar Ridge. 

How could such a great public/private partnership that provides such a valuable 

resource and base of employment be shut down due to negligible aesthetic concerns? 

There is no health issue gains to be accomplished. Who has the capital investment 

to replace this power; within the next 10 years? This just does not appear to make 

good health or economic sense! 

We truly hope the results of these Committee hearings will lead to an economical 

continuation of NGS, therefore, insuring a financially successful existence of the inhabitants of our community and surrounding area. Thank you for your time. 

Mr. MCCLINTOCK. Thank you very much. Our next witness is Mr. 

Richard Silverman, General Manager of the Salt River Project, 

from Phoenix, Arizona. Welcome. 

55 

STATEMENT OF RICHARD H. SILVERMAN, GENERAL 

MANAGER, SALT RIVER PROJECT, PHOENIX, ARIZONA 

Mr. SILVERMAN. Chairman McClintock, Ranking Member Napolitano, Committee Members, I am Richard Silverman, general manager of the Salt River Project. I thank you for the opportunity to 

be here today to testify concerning the Navajo Generating Station. 

I also want to thank Congressmen Gosar and Grijalva for their 

leadership and the tribal leaders who were on the first panel for 

their comments and continued partnership on this issue. The plant 

as you have heard is located on the Navajo Reservation near Page, 

Arizona. 

It is in fact a 2,250 megawatt coal fired generating station that 

provides around the clock energy service to more than 3 million 

electric customers in Arizona, California, and Nevada. 

NGS is not only an important baseload resource for the region, 

but it is also the primary energy source that moves water 336 

miles for the Central Arizona Project to deliver this vital resource 

to millions of people in Arizona, including 10 of Arizona’s Native 

American communities. 

The Navajo Project is an important economic driver for Northern 

Arizona. NGS employs more than 500 people, 80 percent of whom 

are Navajos, and between NGS and the Kayenta Mine, we have a 

combined annual operating budget of approximately $700 million, 

including more than $140 million to the Navajo and Hopi Tribes 

through coal royalty payments, permit and lease fees, scholarships, 

and direct payroll for nearly 1,000 employees. 

SRP operates NGS on behalf of the participants, and as you have 

heard that includes the United States Bureau of Reclamation, the 

Los Angeles Department of Water and Power, the Arizona Public 

Service Company, Nevada Energy, and Tucson Electric Power Company, and the Salt River Project. 

NGS participants are and have always been committed to environmental protection and responsible environmental stewardship. 

This commitment began during construction nearly 40 years ago, 

when electrostatic precipitators known as ESPs were installed at 

NGS to remove 99.5 percent of fly ash particulates. 

Later in response to visibility issues in the region, and in agreement with the EPA and other environmental groups, NGS participants once again worked proactively to address visibility concerns 

by installing scrubbers on all three units at the plant to eliminate 

over 90 percent of sulfur dioxide emissions. 

This project placed NGS as a top performer in its class in reducing sulfur dioxide. Recently and voluntarily, NGS participants installed low NOx burners with over-fire air on all three units. 

The new burners are expected to reduce nitrogen oxide emissions 

by at least 40 percent. For more than four decades NGS participants have worked in partnership with the public elected officials, 

Federal, Tribal, and State agencies, and other concerned parties, 

and have invested more than one-half billion dollars in technological improvement projects at NGS. 

Despite the history of environmental performance, which has 

kept NGS in full compliance with all provisions of the Clean Air 

Act, the current ongoing EPA BART process could require installaVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00061 Fmt 6633 Sfmt 6602 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
56 

tion of selective catalytic reduction technology, SCRs, to further reduce NOx. This requirement carries a potential price tag in our judgment of over $1 billion if bag houses are also required. Studies have shown 

that such technology does not improve visibility noticeable to the 

human eye, and this investment would come at time when the 

plant faces many uncertainties, and could put continued operation 

in jeopardy. 

Mr. Chairman and Subcommittee Members, thank you for the 

opportunity to appear before you today. 

[The prepared statement of Mr. Silverman follows:] 

Statement of Richard H. Silverman, General Manager, 

Salt River Project Agricultural Improvement and Power District 

Chairmen McClintock and Young, Ranking Members Napolitano and Boren, and 

Members of the Subcommittees on Water and Power and on Indian and Alaska Native Affairs, thank you for the opportunity to submit testimony today on Protecting 

Long-Term Tribal Energy Jobs and Keeping Arizona Water and Power Costs Affordable: The Current and Future Role of the Navajo Generating Station (NGS). I also 

would like to thank Representatives Franks, Gosar and Grijalva for their interest 

and involvement with the Committee on this important issue. 

My name is Richard H. Silverman. I am the General Manager of the Salt River 

Project Agricultural Improvement and Power District (Salt River Project), a political 

subdivision of the State of Arizona that provides retail electric service to 950,000 

residential, commercial, industrial, agricultural and mining customers in Arizona. 

Salt River Project operates or participates in a broad portfolio of generating resources, including nuclear, coal, natural gas, hydroelectric and renewable facilities. 

Salt River Project also operates a water delivery system providing the primary 

water supply for an area of approximately 250,000 acres that includes major portions of the Arizona cities of Phoenix, Glendale, Mesa, Tempe, Chandler, Gilbert, Peoria, Scottsdale, and Tolleson. I am here today to provide an overview of the history 

of NGS, explain its importance to the southwest, provide an overview of the ongoing 

federal Environmental Protection Agency’s (EPA) Best Available Retrofit Technology 

(BART) process, and describe the extensive and complex issues the participants in 

the plant are facing at this time. 

NGS is a coal-fired generating station consisting of three units, each capable of 

producing approximately 750 megawatts (MW) of electric power, for a total plant 

rated output of 2,250 MW. Salt River Project is the operating agent for itself and 

the five other participants in NGS: the United States Bureau of Reclamation, Arizona Public Service Company, Los Angeles Department of Water and Power, NV 

Energy, and Tucson Electric Power Company. The plant, which is located on the 

Navajo Reservation near Page, Arizona, is an important energy provider for all of 

its participants. NGS provides critical baseload energy to meet each utility’s customer needs year round (but especially during the peak summer months), and plays 

a key role in Central Arizona Water Conservation District’s (CAWCD) delivery of 

water to Native American communities, farmers, and cities in Arizona. Yet, the participants in NGS currently are faced with a set of complex issues that, when viewed 

in light of the potential EPA requirement for significant capital expenditures for 

emission controls that would result in imperceptible visibility improvement, threaten the long-term viability of the plant. Those issues include the need for lease extension and rights-of-way renewals, and the negotiation of key agreements for coal and 

water. Despite these challenges, however, we remain committed to working closely 

with the Native American, water and other stakeholders, and greatly appreciate our 

continued relationship with them and their continued engagement in issues affecting NGS. 

United States’ Interest in NGS 

It is important to understand how the United States came to become the largest 

individual participant in NGS. In the 1960s, several southwest utilities, including 

Salt River Project, were jointly evaluating the construction of a series of plants that 

would make use of the quality low-sulfur coal resources located on the Navajo and 

Hopi Reservations. The utilities were planning the construction of several such 

plants—NGS Units 1–3, the addition of three more units at the Four Corners Generating Station, and another facility known at the time as Kaiparowits. All of the 

facilities required significant federal involvement for approval of tribal leases, 

57 

1The average NGS wage with benefits is approximately $105,000 compared to an average of 

$48,000 for Coconino County. 

issuance of federal rights-of-way, coal leases and permits, and execution of water 

service contracts. Only NGS subsequently was constructed and put into operation. 

At the same time the utilities were considering the plants, a parallel process was 

underway for the development of the Central Arizona Project (CAP) under the Colorado River Basin Project Act of 1968. As the CAP initially was conceived, the power 

needed to pump Colorado River water into central and southern Arizona would be 

supplied through the construction of two additional hydrogeneration facilities on the 

Colorado River at Bridge Canyon and Marble Canyon. Objections raised by environmental organizations to the construction of new dams on the Colorado River led 

then-Secretary of the Interior, Stewart Udall, to broker a compromise that resulted 

in the foregoing of the construction of these two Colorado River dams in exchange 

for Congress authorizing the United States, through the U.S. Bureau of Reclamation, to acquire the right to output from a thermal electric power plant, NGS, for 

purposes of providing pumping power, and to provide a source of revenue to repay 

the federal debt incurred for CAP construction. As a result of the environmental 

compromise, the United States acquired a 24.3% entitlement to the output from 

NGS and became the plant’s single largest participant. 

Economic Importance of NGS 

Today, in addition to providing the power to pump CAP water to the major metropolitan areas of Arizona, NGS provides energy to more than 3 million customers in 

Arizona, California and Nevada through its utility participants. As a baseload resource that produces energy on a 24x7 basis, NGS could not be easily replaced by 

other types of resources, including renewables. NGS plays a critical role in providing 

cost-efficient baseload power to the southwest, helping the utilities control energy 

costs, especially important in these economic times. 

Both NGS and the Kayenta mine that provides coal to the plant are vital economic drivers for the Navajo Nation, Hopi Tribe, the Town of Page, Coconino County, Arizona, the State of Arizona and 10 Native American Communities. NGS provides high-paying jobs for 540 skilled workers, of which more than 80 percent are 

Navajo.1 During annual overhauls, NGS and its contractors employ more than 1,000 

temporary skilled workers, contributing significantly to the Page economy during 

the tourism off-season. The Kayenta Coal Mine, operated by Peabody Western Coal 

Company and located on the Navajo and Hopi Reservations, supplies the coal for 

NGS via a dedicated 78 mile rail line and employs an additional 420 or so skilled 

workers, primarily members of the Navajo Nation and Hopi Tribe. NGS is the only 

remaining purchaser of coal from the Kayenta mine and there currently is no means 

to transport coal from the mine to any other purchaser. The high-paying jobs at 

NGS and the mine support many other jobs in Page and the surrounding area, and 

NGS tax payments benefit local schools and other governmental functions. 

NGS and the mine have a combined annual operating budget of approximately 

$700 million. This includes more than $140 million in direct payroll for almost 1,000 

employees, employee benefits, coal royalty payments to the Navajo Nation and Hopi 

Tribe, permits, lease fees and scholarships. The amount paid to the Navajo Nation 

is expected to increase if the lease is extended beyond 2019 and the rights-of-way 

for NGS are renewed. Coal royalties, which also can be expected to increase some 

over time, currently provide about $14 million annually to the Hopi Tribe, which 

represents 88 percent of the Hopi Tribal government’s annual revenue. 

NGS also is a key component for the United States in meeting its federal trust 

responsibilities under the 2004 Arizona Water Settlements Act (AWSA), Public Law 

108–451, and other Arizona Indian water rights settlements. Revenues generated by 

the sale of surplus power from NGS help fund repayment of the federal debt for the 

CAP and, as a consequence of the AWSA, underwrite the cost of delivering CAP 

water to Arizona’s Indian tribes, fund the construction of CAP water delivery facilities for these tribes, and provide a settlement fund for future Arizona Indian water 

settlements. Without these NGS-generated revenues, Arizona’s tribes could not afford to use their CAP water entitlements for re-establishing their agricultural economies on their reservation lands, and none of the other benefits accruing to Arizona 

tribes under the AWSA would materialize. Allowing these critical revenues to fade 

away through closure of NGS would turn the benefits provided to the tribes under 

the AWSA into another unfulfilled promise. 

Environmental Controls at NGS 

The participants in NGS have consistently ensured that the plant complies with 

applicable environmental regulations. Even prior to the passage by Congress of two 

58 

2 Under the lease agreement between the Navajo Nation and the participants in NGS, the 

Navajo Nation agreed that it ‘‘will not directly or indirectly regulate or attempt to regulate the 

Lessees in the construction, maintenance or operation of the Navajo Generating Station and 

transmission systems of the Lessees, the construction, maintenance or operation of the fuel 

transportation system of the Lessees or the Fuel Transporter.’’ 

key environmental regulations at issue here—the Clean Air Act and the National 

Environmental Policy Act (NEPA)—the NGS participants agreed in the lease with 

the Navajo Nation to install emissions control equipment to address particulate 

matter. During the 1970s’ construction of NGS, the participants installed $200 million in environmental control equipment, including hot side electrostatic 

precipitators (ESPs) with a design efficiency to remove 99.5 percent of particulate 

matter. The ESPs capture fly ash, which is then available for use in concrete, cement and other construction materials. 

In 1977, Congress amended the Clean Air Act, adding a new Section 169A that 

established as a national visibility goal ‘‘the prevention of any future, and the remedying of any existing, impairment of visibility in mandatory class I Federal areas 

which impairment results from man-made air pollution.’’ CAA § 169A(a)(1). Section 

169A directed EPA to develop appropriate regulations to make ‘‘reasonable 

progress’’ toward that visibility goal. Congress did not set a deadline to attain the 

goal in 1977, but it required EPA to balance the cost of emission controls and resulting visibility improvement in determining ‘‘reasonable progress.’’ In response, EPA 

issued its ‘‘Phase I’’ visibility regulations to deal with visibility impairment caused 

by large, individual sources, designated ‘‘Plume Blight’’ or ‘‘Reasonably Attributable 

Visibility Impairment’’ (‘‘RAVI’’), but deferred adopting ‘‘Phase II’’ rules to deal with 

regional haze caused by a multitude of sources, pending advances in the science of 

visibility impairment. 

In the late 1990s, pursuant to an earlier evaluation process under Section 169A, 

the NGS participants installed wet limestone scrubbers on all three units to address 

visibility issues at a cost of approximately $420 million pursuant to a 1991 agreement with environmental groups and the EPA. The scrubbers eliminate more than 

90 percent of sulfur dioxide (SO2) from plant emissions and, in conjunction with the 

plant’s use of low-sulfur coal, resulted in NGS becoming a top performer in its class 

in reducing SO2 emissions. 

In the 1990 Amendments to the Clean Air Act, Congress added a new Section 

169B, which directed EPA to undertake a comprehensive, five-year visibility research program and issue Phase II regulations to deal with regional haze. Although 

that program did not materialize due to a lack of funding, Section 169B also established the Grand Canyon Visibility Transport Commission (‘‘GCVTC’’) and charged 

it with the responsibility of assessing existing visibility conditions and recommending measures to improve visibility in 16 Class I areas on the Colorado Plateau, 

including the Grand Canyon. After extensive technical studies and a stakeholder 

process conducted over a five-year period, the GCVTC issued its final report in 1996. 

Salt River Project and the other utility participants of NGS all were active participants in the process. 

According to the GCVTC’s final report, visibility impairment in Class I areas on 

the Colorado Plateau is caused almost exclusively by three types of air pollutants 

in roughly equal proportions: dust particles, sulfates, and elemental and organic carbon. On average, nitrate particles are only minor contributors to visibility impairment on the Colorado Plateau. Sulfate and nitrate particles are formed in the atmosphere from emissions of SO2 and NOX resulting from fossil fuel combustion, including coal-fired power plants. Dust and carbon particles originate from both natural and man-made sources such as forest fires, soil erosion, mobile sources, and 

emissions from various small and large industrial sources. 

EPA promulgated its regional haze rules in 1999, incorporating many of the recommendations of the GCVTC. EPA issued revised rules in 2005 (the ‘‘BART Rules’’). 

The BART Rules establish a starting point for States to develop their own ‘‘reasonable progress’’ state implementation plans (SIPs) to achieve the national visibility 

goal in Class I areas by 2064. 40 C.F.R. § 51.308(d)(1). Under the BART Rules, each 

state is given the flexibility to determine emission limitations that represent BART 

for certain stationary sources within the State. Under the Tribal Authority Rule 

(‘‘TAR’’), EPA asserts the authority to promulgate a federal implementation plan 

(FIP) for sources like NGS that are located on an Indian reservation, if EPA determines such regulations are ‘‘necessary or appropriate to protect air quality’’ and the 

tribe has not submitted a Tribal Implementation Plan (‘‘TIP’’). 40 C.F.R. § 49.11(a). 

The Navajo Nation has not submitted a regional haze TIP applicable to NGS.2 In 

its Advanced Notice of Proposed Rulemaking, EPA determined that it has the authority to promulgate a FIP to establish BART requirements for NGS. 74 Fed. Reg. 

59 

3The other is the Four Corners Power Plant. Salt River Project also has an ownership interest 

in that plant. 

44313, 44315 (Aug. 28, 2009). EPA thus has undertaken a task that typically would 

be performed by a State or a tribe. By stepping into this role, EPA is obligated to 

comply with the criteria and process established in the Clean Air Act and its own 

regulations for determining BART. 

NGS is one of only two ‘‘BART-eligible’’ sources on the Navajo Reservation.3

BART-eligible sources, generally, are the class of large stationary sources that were 

put in operation between August 7, 1962 and August 7, 1977, and that fall within 

one of several listed source categories. 42 U.S.C. § 7491(b)(2)(A); 40 C.F.R. § 51.301. 

BART applies to such sources whose emissions, as determined by the State, ‘‘may 

reasonably be anticipated to cause or contribute to any impairment of visibility in 

any mandatory Class I Federal area.’’ 42 U.S.C. § 7491(b)(2)(A); 40 C.F.R. 

§ 51.308(e)(1)(ii). 

The BART determination now being considered by EPA for NGS is being done 

pursuant to the regional haze program, which is intended to address visibility. 

While Congress granted EPA broad authority under the Clean Air Act to address 

visibility in Class I areas, Section 169A of the Clean Air Act also made clear that 

decisions by states—or in this case EPA—regarding ‘‘reasonable progress’’ and what 

constitutes BART must take into consideration ‘‘the costs of compliance, the energy 

and nonair quality environmental impacts of compliance, any existing pollution control technology in use at the source, the remaining useful life of the source, and the 

degree of improvement in visibility which may reasonably be anticipated to result 

from the use of such technology.’’ 42 U.S.C. § 7491(g)(2); 40 C.F.R. § 51.301.. Thus, 

just as EPA designed the BART Rules to give the states maximum flexibility in 

meeting the visibility goal, EPA also should exercise that flexibility. Such an approach would be consistent with President Obama’s January 18, 2011 Executive 

Order on Improving Regulation and Regulatory Review, which is premised on the 

principle that: 

Our regulatory system must protect public health, welfare, safety, and our 

environment while promoting economic growth, innovation, competitiveness, and job creation. It must be based on the best available science. It 

must allow for public participation and an open exchange of ideas. It must 

promote predictability and reduce uncertainty. It must identify and use the 

best, most innovative, and least burdensome tools for achieving regulatory 

ends. It must take into account benefits and costs, both quantitative and 

qualitative. It must ensure that regulations are accessible, consistent, written in plain language, and easy to understand. It must measure, and seek 

to improve, the actual results of regulatory requirements. 

For NOX emissions from coal-fired electric generating units (EGUs), the BART 

Rules specifically established presumptive BART limits through notice-and-comment 

rulemaking. The presumptive NOX emissions limits for coal-fired EGUs vary according to individual source characteristics and type of fuel burned (bituminous, sub-bituminous, lignite, etc.). The presumptive BART limit applicable to the EGUs 

present at NGS is based intentionally and expressly on combustion controls such as 

low-NOX burners with separated over-fire air (LNB/SOFA) only; the presumptive 

BART limit is not based on post-combustion controls such as selective catalytic reduction (SCR). 70 Fed. Reg. 39104, 39172 (July 6, 2005). With the installation of 

LNB/SOFA, NGS meets or exceeds the presumptive BART limits established by 

EPA. 

BART for NGS 

Pursuant to the BART Rules, Salt River Project completed a BART analysis and 

submitted it to EPA in December 2008. That analysis concluded that BART for NGS 

could be satisfied by installing LNB/SOFA, and the NGS participants decided to proceed proactively with that installation ahead of a final determination by EPA. Even 

after Salt River Project completed additional analyses at EPA’s request, the conclusion remained that BART for NGS is LNB/SOFA. Salt River Project’s analyses took 

into account all five factors set out in EPA’s BART Rules and Salt River Project continues to believe that BART for NGS can be satisfied by LNB/SOFA, especially in 

light of the unique role that the plant plays in the southwest. 

The NGS participants recently completed the installation of LNB/SOFA on all 

three units at a combined cost of approximately $45 million. Those advanced combustion controls change the way fuel and air combust in the furnace, reducing NOX

emissions by about 40 percent, or 13,000 tons per year. 

The primary alternative to reducing NOX emissions would be the installation of 

SCR. Utilizing a catalyst, this technology promotes a chemical reaction between the 

60 

NOX and ammonia, resulting in the elimination of NOX and ammonia and the formation of nitrogen and water. While SCRs could offer some additional reduction of 

NOX emissions over LNB/SOFA, factoring in all related equipment associated with 

SCRs, including the possible added requirement of new particulate matter controls 

due to likely increases in sulfuric acid mist emissions, the cost to retrofit NGS beyond LNB/SOFA could reach over $1 billion and the incremental improvement in 

Class I areas would be imperceptible to the human eye. This results because, as discussed above, NOX emissions are responsible for only a small fraction of the regional 

haze sometimes observed in Class I areas within the Colorado Plateau, and because 

power plant emissions only account for a fraction of the NOX emissions in the region. 

An order to install SCR during the current rulemaking process, especially before 

the lease and rights-of-way are renewed, could leave the viability of NGS in jeopardy. At a minimum, economic studies done by CAP indicate that costs for water 

delivery to its customers would increase significantly. 

Current Challenges Faced by NGS Participants 

As indicated above, the participants in NGS face a number of uncertainties in addition to the ongoing BART process at this time. The initial term of the plant site 

lease with the Navajo Nation and the existing right-of-way for the plant site expire 

in 2019. Additional rights-of-way for the associated transmission lines, and for the 

railroad, which brings the coal to the plant from the Kayenta mine, expire over the 

following few years. Other agreements for the coal and water supplies for the plant 

also will need to be extended or negotiated. 

Salt River Project is engaged on behalf of the participants in discussions with the 

Navajo Nation over the terms of the lease extension. After those discussions are 

completed, the Navajo Nation will submit the lease to the U.S. Department of Interior Bureau of Indian Affairs for review and approval, and Salt River Project will 

submit applications to renew the rights-of-way. Both of those actions are anticipated 

to trigger the need for NEPA compliance, which will take several years to complete 

and the outcome of that process is difficult to predict at this time. 

Although the NGS participants are committed to negotiating a lease extension 

with the Navajo Nation and successfully completing the NEPA process to secure the 

necessary renewals for the continued operation of NGS, it would be difficult for the 

participants to justify an investment of potentially more than $1 billion at NGS for 

emission controls with the uncertainties that the plant currently faces. When combined with the other costs the plant participants could expect to incur for other environmental regulations (such as EPA’s proposed rules on hazardous air pollutants 

(the EGU MACT rule), coal combustion residuals and cooling water intake structures), the uncertainty only increases. For this reason, the NGS participants initiated a stakeholder process to look at options and encourage the development of creative alternatives. That process has been important to get all of the issues on to 

the table and discuss points of agreement, but final principles of agreement have 

not yet been reached. 

Summary 

In summary I would like to emphasize the following points: 

• NGS is a crucial electric generating facility that provides round-the-clock 

service to millions of people throughout Arizona, California and Nevada. 

• NGS is the primary energy source for the CAP, a vital provider of water for 

millions of people in Arizona and 10 Native American communities. 

• As the plant’s largest participant, the United States has an important stake 

in the ongoing operation and future of NGS. 

• The economic welfare of the Navajo Nation and the Hopi Tribe are dependent 

upon the continued operation of NGS. 

• The continued operation of NGS is central to the ability of the United States 

to meet various Indian water rights settlement obligations. 

• The BART determination now being considered by EPA for NGS is being done 

pursuant to the regional haze program, which is intended to address visibility. 

• According to the GCVTC’s final report, nitrate particles are only minor contributors to visibility impairment on the Colorado Plateau. 

• Based upon the results from a BART analysis performed by Salt River Project 

in 2008 in accordance with the BART Rules, BART for NGS should be the 

installation of LNB/SOFA. 

• In advance of an EPA determination, the NGS participants voluntarily invested $45 million in LNB/SOFA technology. Installation was completed on 

all three units in April 2011. 

61 

• The estimated cost of an SCR installation at NGS would exceed $1 billion. 

Given prevailing uncertainties related to continued NGS operation beyond 

2019, if the EPA renders a determination that SCR is required at NGS, then 

the participants may be unable to justify continued operation. 

• Scientific studies have demonstrated that the human eye cannot detect visibility distinctions between a $45 million LNB/SOFA technology investment 

and a $1+ billion SCR technology investment. 

• SRP believes that the LNB/SOFA technology choice is the appropriate BART 

determination for NGS. 

Chairmen McClintock and Young and Members of the subcommittees, thank you 

again for the opportunity to testify before you today on this important issue. I would 

be happy to answer any questions. 

Mr. MCCLINTOCK. Thank you, Mr. Silverman. Our next witness 

is Mr. Vernon Masayesva, Executive Director of the Black Mesa 

Trust, from Flagstaff, Arizona, to testify. Welcome. 

STATEMENT OF VERNON MASAYESVA, EXECUTIVE DIRECTOR, 

BLACK MESA TRUST, FLAGSTAFF, ARIZONA 

Mr. MASAYESVA. I have a very long last name which is very hard 

to pronounce, and so by the time that I introduce myself, I lost a 

minute. We are here because of the threat of the Navajo Generating Station closing, and there is a warning sign out there that 

if this happens, there is going to be an economic meltdown on the 

Hopi Reservation where I live. 

Unfortunately, the issue is framed purely as an economic issue. 

The cultural values, traditions, is absent from the discussion. So it 

is not a balanced debate. It is very important to understand that 

the Black Mesa coal is the footstool of the Central Arizona Project, 

and in order to understand that, we have to have a good understanding of how the Hopis got into this mess, and who got us into 

this mess. 

And it begins from the early 1900s, when there were water wars 

fought between the seven states. Black Mesa coal came into the 

picture in the 1960s when efforts to generate hydroelectric power 

to move a man-made river by damming up the Grand Canyon had 

failed. 

The idea of using coal to generate power was conceived in the 

United States Department of the Interior, but before the Navajo 

Generating Station could be built, two things had to happen. 

The Navajo Nation had to waive its claim to 50,000 acre-feet of 

Arizona’s share of the Upper Basin River. Incidentally, that resolution is expiring in 2019, and that to me is a big issue before you. 

The Hopi and Navajo had to be convinced to open up their land 

for coal mining. Both objectives were achieved with a letter secured 

by a lawyer for the Hopi Tribe named John Boyden, who singlehandedly negotiated a sweetheart deal with Central Royalty, a 

Peabody subsidiary. 

Under the terms of the lease, which was amended a number of 

times, Peabody secured rights to 670 million tons of coal on 68,000 

acres of Hopi and Navajo Reservation. The Hopi Council did not 

know at the time that Mr. Boyden was billing Peabody for expenses 

during the lease negotiations. 

The lease gave Peabody unlimited access to ancient waters 

stored below the ground in an aquifer for a price of $1.67 per acreVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00067 Fmt 6633 Sfmt 6602 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
62 

foot. Around 1985, the price went up to $150 per acre-foot, which 

is still a bargain price. 

That slurry ended on December 31, 2005, but not until 45 billion 

gallons of pristine water was wasted, enough water to sustain 

10,000 Hopis for over 300 years, gone in just 35 years, all to preserve and protect aquifers under Central Arizona. 

Now 40 years later the Hopi and Navajo Nation people are finally waking up and what they see is appalling. Slowly, they are 

beginning to understand the magnitude of the damage caused by 

the world’s largest strip mining under the watchful eyes of the Secretary of the Interior. 

What is the damage that concerns us? Thousands of Hopi ancestral villages and burial sites have now been destroyed by strip mining. Failure of the government to protect the Navajo aquifer and 

the cultural resources of the Hopi-Navajo. 

The Federal Government has never required Peabody to impose 

a groundwater reclamation plan and bond by the way, and then 

there are the health impacts on Black Mesa from Peabody’s blasting and coal dust. 

A grassroots movement is building among the Hopi and Navajo 

to shut the mining down, and to begin a transition into clean 

energy sources. As you can see the debate over the best way to 

eliminate nitrogen pollution is not the only issue facing NGS owners, CAP operators, and Peabody. 

Important regulations control toxic mercury, coal, and ash, and 

global warming is just around the corner. Then there is the matter 

of the conflict between the Department of the Interior, and the Bureau of Reclamation is playing in this whole scenario. They are the 

hundred percent owners—— 

Mr. MCCLINTOCK. Mr. Masayesva, I am going to have to interrupt. We are out of time, but we will come back to you during questioning. 

Mr. MASAYESVA. Thank you. 

[The prepared statement of Mr. Masayesva follows:] 

Statement of Vernon Masayesva, Hopi Tribal Member, Kykotsmovi, Arizona 

Hello, my name is Vernon Masayesva, a Coyote clan member of the Hopi Tribe. 

I am here to speak in my behalf as a concerned citizen. 

Black Mesa coal and Glen Canyon Dam are the footstools of Central Arizona 

Project. 

The initial plan to dam up the Grand Canyon to create hydroelectric power needed to push water up-hill to Phoenix and Tucson through CAP canal failed. 

So a plan was conceived in the Office of Secretary of Interior to build Navajo Generating Station using coal from Hopi and Navajo lands, and water stored in the 

Dam called Lake Powell. 

Before the project could move forward, two things needed to happen: 

1. The Navajo Nation had to give up their claim to Arizona’s share of Upper 

Basin Colorado River. 

2. Navajo and Hopi Tribe had to open up their lands to coal mining 

So, the Secretary sent his envoy carrying a resolution to the Navajo capitol. The 

purpose of the resolution was to waive Navajo water claim to Arizona’s Colorado 

River share of the Upper Basin in return for job preference and economic benefits. 

The Navajo Council reluctantly passed the resolution suspending their claim to 

50,000 acre-feet of water for 50 years. 

Suspension will end in 2019 along with land leased to NGS owners and a rightof-way to deliver coal to NGS. 

A former lawyer for the Hopi Tribal, John Boyden, now deceased, joined the circle 

of architects. His mission was to persuade the Hopi Tribal Council to open the door 

to mining. 

63 

John Boyden convinced the Council to give Sentry Royalty, a subsidiary of Peabody Coal Co, exclusive rights to explore and develop coal on Black Mesa and delivered to NGS and Mohave Generating Station located in Nevada. 

Coal would be delivered to NGS by rail. As 273 mile slurry line would provide 

to MGS. The Hopi Tribal Council initially turned down the slurry operation, but 

changed their minds when confronted by Boyden. 

Peabody currently has rights to about 620 million tons of coal on a 68,000 acre 

leasehold. 

The Hopi, like the Navajo, were drawn into the triangle of deceit, not to get rich, 

but to subsidize owners and operators of generating station, mining company and 

CAP. 

Hopi was also promised economic prosperity and jobs. Today only about a dozen 

work at the mine. I am not aware of any Hopi who works at NGS. 

In 1970, mining started. Coal was transported 273 miles via coal slurry pipeline 

to MGS across state line. 

4000 acre-feet of ancient pristine fossil water from a 15,000 to 35,000 year old aquifer was used annually to operate the slurry. 

The price of water approved by Secretary Udall in his capacity as trustee of Indian Tribes’ natural resources, was $1.67 for each acre-feet of water (325,000 gallons 

equal an acre-feet). Coal was sold at 3.33% of the market value. 

The slurry was forced to close in 2005 but not before over 45 billion gallons of 

sole-source drinking water was lost, enough water to serve 10,000 Hopis for at least 

300 years at the present use, which is about 350 acre-feet per year. 

Six years later, NGS began generating power to run 14 pumping stations bringing 

water to Phoenix, Arizona from the mighty Colorado. 

Now, 40 years later, the grassroots are realizing the magnitude of destruction 

caused by the world’s largest strip mining on Black Mesa and they are shocked and 

angry. Here are some examples: 

• Over-drafting of non-renewable water stored in Navajo aquifer and failure of 

US Office of Surface Mining Reclamation and Enforcement to require Peabody to post groundwater reclamation plan and bond. 

• Waters from Black Mesa basin that used to water Hopi corn fields in 

Moencopi shut down by construction of over 160 impoundment ponds 

• Evidence of contamination of pristine fossil water stored in the N-aquifer, 

waters which was put into the ground during the last ice-age. 

• Destruction of unknown number of Hopi ancestral villages and burial sites, 

which the elders call a ‘‘living museum, a cathedral and an academy of our 

oral traditions.’’ 

In a 20 year survey, starting in 1968, an archaeological field school hired by Peabody, found 1,026 historic and 1,596 pre-historic sites, of which only 168 sites were 

excavated. Only 178 burial sites were found. 

What happened to the rest of the remains of Hopi ancestors and the ancestral villages has yet to be revealed. 

For me, this is like tearing pages from our history book, like tearing pages from 

the Torah, Koran, and the Bible. It is so because Black Mesa is a shrine, a temple 

we call Tuuwansavi, Earth Center, a safe homeland, a sacred land. 

Last year the Hopi people pleaded with President Obama to end the destruction. 

They have yet to receive a response. I will leave a copy of the letter for the record. 

The controversy EPA’s proposal to require NGS owners to install Selective Catalytic Reducers in their plants to reduce nitrogen oxide has brought us here. 

Owners are saying that if EPA’s proposal prevails, NGS will be shut down. This 

will cause a domino effect. Mining will end. Hopi economy will be devastated. Hundreds of jobs will be lost. 

The price of water delivered to Phoenix and Tucson and other Southern Indian 

Tribes will rise astronomically along with the cost of power to millions of rate-payers, businesses and farmers. 

The debate over BART to improve visibility is just one issue. Next to come are 

regulations to limit mercury, and carbon dioxide. 

And there are many controversial issues facing Peabody Coal Co. The cost of resolving these issues will have a direct economic impact on NGS because the two are 

Siamese twins. Once cannot survive without the other. 

The other issue is the conflicted role of the Bureau of Reclamation (BOR). BOR 

owns CAP, a majority share of NGS. BOR buys coal from Peabody, co-regulate the 

mine and is responsible for 24.3% of pollution. 

Black Mesa Trust’s mission, of which I am the director was founded in 1998, is 

to preserve waters and land on Black Mesa using ancient wisdom and modern 

science, has prepared a proposal to bring multiple solutions to multiple issues. 

64 

For example BMT proposes that NGS transition away from coal to clean and 

cleaner fuel sources, specifically solar and natural gas in 10 years. 

In the process of transitioning, create alternative sources of revenue and jobs for 

the Hopi and Navajo nations with the help of NGS owners and managers of CAP. 

This includes building a 1000 plus MW solar plant on Hopi and another one on 

Navajo. A construction of 550 KV transmission line alongside the existing El Dorado 

line which runs from Cameron, near Flagstaff, to the Four Corners power plant 

through Hopi and Navajo lands. 

This will open up a bottle neck and bring green power to market. 

These projects can be done in partnership with NGS owners. Solar powered plants 

can be used to help meet Arizona Corporation Commissions’ mandate that a percentage of power come from renewable energy. 

Unfortunately, the debate over nitrogen pollution is being used to create further 

conflict and alarm. It has pitted Navajo against Navajo and could very well pit Hopi 

against Hopi, and Hopi against Navajo! 

This is morally and ethically wrong especially when it is so unnecessary. 

Together we can save NGS and guarantee that customers of CAP and customers 

of NGS will continue receiving water and electricity at reasonable cost. 

Together, we can finally bring economic justice to Hopi and Navajo, create economic prosperity and hundreds of jobs to Arizonans including Hopi and Navajo people, who are experiencing the highest unemployment rate, 85% on Hopi. 

Together we can establish an international clean energy showcase on the Colorado 

Plateau which some Hopis call a ‘‘Learning Plaza’’. 

Instead of putting our energy and money fighting over EPA’s proposal, we need 

to turn the negative energy into positive energy and bring about a win-win resolution for everyone. 

Kwaq kwa, Thank you. 

Mr. MCCLINTOCK. Thank you for joining us, and our next witness 

is Mr. Marshall Johnson, a member of The Navajo Nation from 

Kykotsmovi, Arizona. Welcome. 

STATEMENT OF MARSHALL JOHNSON, NAVAJO INDIVIDUAL, 

KYKOTSMOVI, ARIZONA 

Mr. JOHNSON. Thank you. Mr. Chairman, and Members of the 

Committees, thank you for the opportunity to speak here before 

you. My name is Marshall Johnson, and I am from Black Mesa, 

Arizona, and originally from Forest Lake. 

I am the founder and director of To Nizhoni Ani, a grassroots organization whose mission is to preserve and protect the environment of Black Mesa. To begin, I want to say that the work that 

the EPA is doing is important for people everywhere, not just indigenous people. 

We must get a handle on our emissions, and the degradation of 

our air is a direct violation of human rights, the right to breathe 

clean air. That said, I would like to express the vision of the people 

of Black Mesa everywhere they support our work. 

One, CAP, the Central Arizona Project, must become self-sufficient. Navajos can no longer carry the burden of the most expensive water project in the world. The time is now for CAP to become 

self-sufficient. 

Two, the site of the Navajo Generating Station just begin 

transitioning to the renewable energy generation site. It must be 

fully operational within five years. It will replace the energy generating loss when lost coal resources are depleted. We are not saying 

shutting down NGS. 

Three, there are 40,000 acres of ground fills available on Black 

Mesa, just as legislators and predominant Arizonans rallied and 

65 

lobbied for CAP to be built, I want to see your support for such a 

renewable energy generation project such as solar on Black Mesa. 

Now, let me turn to the issues of the Navajo Generating Stating 

operation, and the agency who helped set this entire operation into 

motion decades ago for the Navajo people, the Bureau of Reclamation, the Department of the Interior. 

The Navajo Nation was lobbied to waiver their water rights to 

the Navajo Generating Station operation in the amount of 50,000 

acre-feet, and approved the site of the Navajo Generating Station 

Power Plant, and provide coal source for the NGS operation. 

In short, the Navajos have been carrying the burden of the operation of NGS and CAP. The coal used to power NGS comes from 

an operation on Black Mesa. Peabody Energy recently has its lava 

permit remanded. Peabody’s operation is responsible for depleting, 

depressurizing, and contaminating, and damaging, our only drinking water for Black Mesa residents, including the Hopis. 

There is no bond in place for the water, and to this day Peabody 

has not returned the water in quality and in quantity. The Navajo 

coal is a source of power for NGS, and NGS emits toxic pollutants 

into our air; nitrogen oxide, mercury, arsenic, carbon dioxide. 

According to the recent study on health disparities on The 

Navajo Nation, asthma was rarely seen in The Navajo Nation in 

1970. Today, 6 out of 10 Navajo surveyed indicate having asthma 

or some other respiratory problem. 

Navajo water is another source of the operation at NGS. Navajo 

waived 50,000 acre-feet of water for the operation for NGS, and 

this is Navajo water, free of charge to the NGS operation. 

It has been more than 10 years since subsidence was first documented in sink holes on Black Mesa, but today we continue to feel 

the impacts of over-draft of the only water source. There is no benefit to the Navajo people for the entire operation. We are still in 

extreme poverty and experiencing extreme health impacts. 

[The prepared statement of Mr. Johnson follows:] 

Statement of Marshall Johnson, Kykotsmovi, Arizona 

Transition Plan of To Nizhoni Ani regarding Navajo Generating Station 

and related operations and resources 

Summary: 

For over fifty years, the Navajo Nation has been largely dependent on a coalbased industrial economy. While revenues from development of coal resources account for a substantial portion of tribal budgets, coal development has had a substantial, and some would say irreparable, impact on tribal health, culture, land, air, 

and water. Further, the impacts are not limited to tribal lands as the effects of hazardous air and green-house gas emissions, toxic water borne pollution, massive depredation of aquifers used for drinking water, and contamination of soil, air and 

water from toxic coal combustion waste (CCW) disposal has dispersed into adjacent 

non-indigenous communities. 

Situated in the Four Corners region of New Mexico and Arizona, the Dine homelands encompass an existing, sprawling coal-industrial complex. The Navajo Mine 

operated by BHP Billiton serves the Four Corners Power Plant (FCPP) in Fruitland, 

New Mexico; Kayenta and Black Mesa mines operated by Peabody Energy serves 

Navajo Generating Station (NGS) in Page, Arizona. The construction and operation 

of these facilities have been central in the economies of the Navajo Nation. Energy 

is exported from these facilities to Southern California, Texas, Southern Arizona, 

and Nevada. 

The Power Plants at NGS and FCPP will not sustain the Dine in perpetuity. Once 

the fossil fuel supplied by the tribes is extracted, the powerful utility companies will 

be looking for other locations to continue their operations. The Dine will have no 

66 

leverage to level the playing field and no plan in place to sustain tribal governance 

as it currently exists. 

After decades of exploitation by mining and energy companies, a combination of 

factors make now the ideal time for the Navajo Nations to transition to a more sustainable clean-energy economy. 

Best Available Retrofit Technology: 

Under the federal Clean Air Act (CAA), the Four Corners and Navajo power 

plants are subject to requirements for Best Available Retrofit Technology (BART) in 

order to comply with federal regional haze requirements. The proposed BART determination for the FCPP, which was issued by EPA Region 9 in October 2010, will 

likely require the installation of Selective Catalytic Reduction (SCR) at all five 

units. Estimated cost for the FCPP to install SCR is $717 million for all five units. 

The owners of the rapidly aging FCPP and NGS are faced with significant decisions about whether to commit financing to pollution-control technology upgrades 

for the facilities, or retire them and replace their output with modern, clean energy 

sources. EPA has determined it is necessary for the owners of the FCPP to upgrade 

pollution controls to reduce haze in the region. The ruling proposal calls for the likely installation of selective catalytic reduction controls (SCR), which could cost hundreds of millions of dollars. 

Rather than incur such costly upgrades for plants that will eventually be phased 

out anyway, the Navajo and Hopi would benefit instead from a move toward newer, 

cleaner and more sustainable energy sources of which economic equity should be included. 

With significant investment to bring these plants into compliance with required 

regulatory protections, it is entirely possible that the owners will determine that the 

FCPP and NGS have exhausted their economically useful lives and that continuing 

to operate them would be unprofitable. Utilities around the country are having the 

same internal debates, and several major owners of FCPP and NGS have already 

made a decision to abandon their stakes in the projects. 

According the EPA website, asthma disproportionately affects children, families 

with lower incomes, and minorities. ‘‘While asthma was a rare diagnosis in many 

HIS areas before 1975, asthma prevalence and hospitalizations increased dramatically among AI/AN populations during the 1980s.’’ (IHS 2006). Between 1972–74 

and 1996–98, Navajo Area age-adjusted death rates for cancer have increased from 

43.7 to 87.5 deaths per 100,000 populations (IHS 2006). 

In addition, TNA has engaged community members across the northwest and central region of the Navajo Nation (in the area of NGS) in a survey that is meant to 

assess the need for a more comprehensive health study primarily focused on respiratory and heart disease and may include cancer. 141 surveys were returned by 

adult community members from 13 communities in the Northwest region of the 

Navajo Nation (Kaibeto, Chilchinbito, Pinon, Navajo Mt. Coppermine, Lechee, 

Dennehotso, Kitsillie/Black Mesa, Tonalea, Tuba City, Bittersprings, CedarRidge, 

and Shonto). The survey was conducted from March to May, 2011. The survey asks 

community members to assess the number of family members with asthma and respiratory problems and to identify the number of members with respiratory problems 

over the age of 25 years and under the age of 25 years. It also asks community 

members to identify distance to nearest hospital facilities and what other kinds of 

ways they address these problems besides modern methods. 


66648.002.eps
67 

Coal Mining a Legacy of Non-Compliance: 

Part of the transition strategy is to compel meaningful and timely reclamation, 

closure, and clean-up of the tens-of-thousands of acres of mine lands used for coalfired power plants. Actual clean-up and reclamation of mined lands (which could 

take decades) not only creates jobs and a transitional revenue stream, but in some 

instances may present important renewable energy site and location opportunities 

on mined-lands (i.e. brown fields). 

Peabody’s Kayenta Mining Operation covers approximately 44,000 acres and has 

produced approximately 8.5 million tons of coal per year. Peabody’s 44,073 acre 

Kayenta Mine mining operation continues to supply coal exclusively to the Navajo 

Generation station and has done so since 1973. NGS became operational in 1971 

and was based in part on a resolution from Navajo Nation which waived claims of 

50,000 acre feet of Navajo water in the upper Colorado River basin for 50 years or 

the life of Navajo Generating Station. 

Tens of millions of tons of coal combustion waste (CCW), the toxic by-product of 

burning coal in power plants, has been disposed of in insufficiently regulated landfills and dumped back into the mines or on-site on the Navajo Nation. This CCW 

contains toxic pollutants such as mercury, cadmium, barium, and arsenic, which 

cause cancer and various other serious health effects. These contaminants can leach 

into groundwater from the landfills and mines where they are dumped, and can migrate to drinking water sources, posing significant public health concerns. 

Peabody’s 18,000 acre Black Mesa mining operation supplied coal to the Mohave 

Generating Station from 1970 to December 2005. The Black Mesa mine became nonoperational in 2005 after closure of Mohave in 2005 due to the Station’s inability 

to comply with the Clean Air Act. 

In addition to the coal mining at the Black Mesa Mine, Peabody has also pumped 

an average of 4000–6000 acre-feet per year. That is more than 1.3 billion gallons 

of potable water annually from the Navajo Aquifer (N–Aquifer) between 1969 to 

2005 a span of 35 years. This water was used to transport pulverized coal in a pipeline (Black Mesa Pipeline) 273 miles to the Laughlin, NV, and the location of the 

Mohave Generating Station. 

The N-aquifer is the primary source of water for municipal users and tribal members within the 5,400 square mile Black Mesa area. All of the Hopi and many of 

the Navajo who live in the region take their water, which they use for drinking, subsistence farming and for religious purposes, from the same source. Since Peabody 

began using N-aquifer water for its coal slurry operations, water levels have decreased by more than 100 feet in some wells and discharge has slackened by more 

than 50 percent in majority of monitored springs. There are reports that washes 

along the mesa’s southern cliffs are losing outflow. There are also signs that the aquifer is being contaminated in places by low-quality water from overlying basins, 

which leaks down in response to the stress caused by pumping. Peabody’s ongoing 

groundwater pumping, which is not covered by a reclamation bond, undercuts the 

sustainability of North America’s oldest cultures, and continues to have a significant 

impact on tribal communities throughout the region. 

In 2010, an independent scientist at the University of Arizona completed a study 

investigating both Peabody’s mine and the tribal communities’ impact on the N-aquifer. This study demonstrated the following mine-related impacts and OSM’s (coincidental) discretionary decisions and actions: 

1. In 1989, OSM set a damage-threshold for spring discharge at a 10% reduction to discharge caused by the mine. 

As of 2009, Moenkopi Spring (sixty miles southwest of the mine) had declined by 

more than 26%. OSM maintains, however, that the decline is caused by tribal 

pumping or recent drought conditions. 

The University of Arizona study demonstrated that the declining rate of discharge 

from Moenkopi Spring expresses a strong, statistically significant relationship with 

the rate of Peabody’s increasing withdrawals. Further, the spring has no statistically significant relationship with either local municipal withdrawals or local rates 

of precipitation. 

In 2008, OSM concluded that ‘‘there have been and will be no impacts to these 

springs attributable to mining’’ (OSM–CHIA 2008: 86). Subsequently, OSM removed 

the oversight of Moenkopi Spring from its regulatory purview.e ́e ́e ́

2. In 1989, OSM determined that water level decline at the community of 

Kayenta (20 miles north of the mine) would be caused almost entirely by 

Kayenta’s groundwater pumping. 

As of 2009, the water level at Kayenta had dropped more than 106 feet; the 

aquifer’s structural stability is currently at risk of compaction at Kayenta. 

68 

The University of Arizona study demonstrated a statistically significant relationship between Kayenta’s declining water level and Peabody’s increasing withdrawals. 

Further, there is no statistically significant relationship between this decline and 

Kayenta’s withdrawals. In fact, the rate of Kayenta’s withdrawals expresses a 

slightly decreasing trend since 1984 although the water level has continued to fall. 

In 2008, OSM concluded that the mine had not adversely affected the N-aquifer 

and completely removed structural stability from its regulatory purview. 

3. In 2008, OSM implemented Peabody’s $3 million groundwater model for 

regulatory purposes. 

According to the model report, ‘‘a regional scale model cannot currently be developed for the basin that will accurately predict the impacts of pumping on individual 

springs’’ (HSIGeoTrans & WEHE 1999: 5–23). Similarly, the model cannot accurately simulate groundwater discharge to streams. 

Nonetheless, in 2008, OSM determined that, rather than using actual groundwater monitoring data, it will use the simulation results from Peabody’s groundwater model for its annual evaluation of the mine’s impact on springs and streams. 

Water is scarce in the desert Southwest, and large volumes of water derived from 

local watersheds serve the needs of the mines and cool the coal plants, drawing 

down aquifers, degrading river water quality and depleting one of the region’s most 

valuable and scarce resources. Fallout from smokestack pollution and the vast quantities of CCW that have been dumped into mines over the past 45–50 years have 

degraded the quality of the remaining water supplies. Health advisories have been 

issued for most streams, rivers and lakes in the Four Corners, warning the public 

against neurological and cardiovascular damage from consuming local fish due to 

mercury contamination (in part due to mercury emissions from FCPP and NGS). 

The true costs associated with these environmental and public health impacts have 

never been internalized by the operators of the coal complex. 

The following table illustrates only one example of the gap in water prices among 

Dine living on the Reservation and those living off the reservation. Dine in Pinon, 

Az. (central Navajo Reservation) pay at least 20 times more per gallon than do residents in Glendale, Az (Phoenix area). 

Transition the Navajo Nation for the sustainability of all Nations: 

The Navajo Nation is the size of Scotland. It is blessed with an abundance of resources that could provide the foundation necessary for a transition to renewable 

energy development. The Navajo Nation encompasses regions with ample wind, 

solar, and geothermal resources, along with vast expanses of land, including large 

reclaimed coal-mining tracts that are ideal for locating renewable energy facilities. 

The region’s solar potential is some of the best in the world and certain portions 

of reservation lands have wind resource ratings capable of supporting utility-scale 

projects. Additionally, as a result of all three power plants’ extensive interconnections to the electric grid there is a network of power lines whose capacity would be 

freed up for an expansion of renewable energy by phasing out the three coal-burning 

plants. 

Utility-scale development of either wind or solar energy resources alone has potential to offset job and revenue losses from the phase-out of the existing coal 

plants. An analysis by the US Department of Energy (DOE), for example, determined that constructing a wind energy project in Navajo County could generate up 

to 140 construction and operations jobs and more than $14 million in economic activity. 

If the Dine are to see their existence into the future they must develop clean energy economies instead continuing to advance a steadily declining coal-based economy. 

Beyond the tangible benefits, a transition away from the unfulfilling history of 

coal and toward clean energy aligns more closely to Dine fundamental laws and values. 


66648.003.eps
69 

Building a new clean energy economy, one in which the viability of the Navajo 

Nation is included must be based on the following: 

• Acknowledging the real value associated with land, water, air and other natural resources on Dine lands. 

• Acknowledging the significant adverse environmental and health impacts of 

a coal based economy and the reliance on the FCPP and NGS and related 

mine operations. 

• Acknowledging that benefits from the sale of Dine raw resources is directly 

disproportionate to the profits of the sale or the recipient of cheap electricity. 

• Creating legislation that would provide the Navajo Nation the financial, political and regulatory means to pursue real solutions in transitioning from fossil 

fuel electricity 

• Developing privately-owned and tribal-owned clean energy generation resources on Dine lands, such as wind and solar; and, 

• Subsidizing clean energy facilities rather than fossil fuel facilities; 

The biggest question Dine face along with the rest of the world is, what happens 

after all the fossil fuel is gone. We have no choice but to embrace the renewable 

technology available and move forward with it. 

Position of To Nizhoni Ani: 

1. It is the position of To Nizhoni Ani that a decision by EPA that would require the Best Available Retrofit Technology otherwise known as BART that 

requires at minimum SCR for the FCPP and NGS would be the most beneficial in terms of the issues of the regional haze and visibility. More importantly, a BART decision would also reduce the health impacts from the pollutants for Navajos living in the region. 

2. In lieu of declining coal resources, the Navajo Nation must work towards incorporating into recent expired leases, a plan to transition these areas into 

a solar generation facility and to target brownfields instead of undeveloped 

lands. The purpose of this plan is 1) to ensure continued revenues and jobs 

for the Navajo Nation and 2) to eliminate health impacts to the people. 

3. The Navajo Nation must begin incorporating a plan for continued revenues 

and jobs in place of the declining coal mined at Kayenta and the Navajo 

Mine. Currently the development of a Solar Energy Generation Facility on 

brown fields, is being explored by grassroots groups, Black Mesa Water Coalition and To Nizhoni Ani. At least 6,000 aces of mined lands is available 

at this time. This alone is enough for more than 1000 MW of power. A total 

of 68,000 acres of land is held in lease by Peabody Western Coal Company. 

While some mining on hundreds of acres of lease land has been complete for 

more than 15 years, reclamation has not been completed by Peabody and 

none of the lands have been transferred back to the Navajo Nation, to be 

given back to the local residents for use. 

Currently the Black Mesa Water Coalition and To Nizhoni Ani has completed 

a Solar Potential Study, conducted dozens of community meetings to residents in the mine lease area as well as residents in communities throughout 

Black Mesa. The purpose of these community meetings is to educate for the 

purpose of mobilizing the community. 

4. Installation of Solar facilities on the CAP canals to provide additional power 

to power the pumps that push the water to Phoenix and Tucson or other 

power users. This would help eliminate the evaporation of 75,000 acre feet 

of water annually. 

5. Make CAP self-sufficient. 

Mr. MCCLINTOCK. Thank you very much for your testimony. Our 

next witness is Mr. David Modeer, General Manager of the Central 

Arizona Project, from Phoenix, Arizona. Welcome. 

STATEMENT OF DAVID MODEER, GENERAL MANAGER, 

CENTRAL ARIZONA PROJECT, PHOENIX, ARIZONA 

Mr. MODEER. Thank you, Chairs of the Committees, and Ranking 

Members, and Members of the Arizona Delegation, for allowing us 

to be here to discuss this issue with you today. I would first like 

to recognize our board president, Pamela Pickard, who represents 

70 

the leadership of our board of directors, who is so engaged in trying 

to resolve this difficult issue. 

I think that it is important to understand a little bit about the 

history of this Central Arizona Project. It has a long history, and 

it is a very successful one, but it did not come without a number 

of compromises required by the State of Arizona. 

Two major compromises were needed in order to receive the authorization and funding by the Congress of the United States, the 

first being that Arizona would have to be become junior priority 

user of Colorado River Water, a significant concession. 

The second was the manner in which power would be generated 

to move water from the Colorado River, 336 miles, 3,000 feet uphill. The original concept was to construct hydropower facilities 

along the Grand Canyon, and not in the Grand Canyon, but coming 

closely on the heels of the finish of the completion of the Grand 

Canyon Dam, and was not viewed very favorably. 

Therefore, Secretary of the Interior Stewart Udall at that time 

brokered an environmental compromise that would allow the Federal Government, through the Bureau of Reclamation, to participate in the construction of the Navajo Generating Station. 

As a result of that decision the Bureau of Reclamation owns 24.3 

percent of the Navajo Generating Station to the benefit of the Central Arizona Project. For years the operators of the Navajo Generating Station have provided low cost reliable power, and have been 

attentive to the environment. 

In the 1990s, over $500 million was invested to deal with sulfur 

dioxide emissions. More recently the owners have voluntarily installed low NOx burners separated on over-fire air at a cost of $46 

million. 

The Central Arizona Project uses water that results in a one percent increase. However, in 2009 the EPA has indicated that the installation of no NOx burners would probably not be sufficient and 

they would require selective catalytic reduction installations at a 

cost of over $500 million. 

That results in a 17 percent increase in energy price to our users 

of Central Arizona Project water. With the installation of SCRs, it 

may require a bag house, which would control downstream particulate emissions from the plant. 

That results in a 33 percent increase in energy rates to our customers. That is a significant impact on our municipalities, our industry, but more importantly has a devastating impact on agricultural use in Central and Southern Arizona that depends on Central 

Arizona Project water. 

Such an increase would likely move Indian agriculture and nonIndian agriculture away from the ability to use Central Arizona 

Project water and drive them back to the unsustainable over-pumping of groundwater, the very thing that the Central Arizona Project 

was constructed to bring renewable water supplies into Central 

and Southern Arizona and prevent. 

The uncertainties that have been mentioned here today regarding the future of the Navajo Generating Station and the agreements that go along with it, create the very specter that the decision made by the owners could result in the closure of the Navajo 

Generating Station. 

71 

That would be catastrophic for the Central Arizona Project and 

its users. For the Central Arizona Project, it would require us to 

move to the open market to find energy. That would result in a 50 

to 300 percent increase over our current costs of energy. 

It would also remove the ability of the Central Arizona Project 

to market the excess power to provide for revenue for the repayment obligations that the State of Arizona has for the construction 

of the Central Arizona Project canal, and it would prevent the ability for those same revenues to be used to effect Indian water rights 

settlements. 

This is a devastating potential result for us. While looking at renewables and other types of energy far out into the future, there 

is no alternative to the Navajo Generating Station for the operation 

of a Central Arizona Project at this time, and there is no prospect 

for any immediate replacement of baseload power for the Central 

Arizona Project. 

Renewables do not provide baseload power, and would not allow 

for the continued operation of the Central Arizona Project. Thank 

you for the opportunity to be here today. 

[The prepared statement of Mr. Modeer follows:] 

Statement of David Modeer, General Manager, Central Arizona Project 

As General Manager of the Central Arizona Water Conservation District 

(CAWCD), I thank Chairman McClintock and Chairman Young, Ranking Member 

Napolitano and Ranking Member Boren of the Subcommittees, and other members 

of the two Subcommittees for the opportunity to testify today in this Oversight 

Hearing on ‘‘Protecting Long-term Tribal Energy, Jobs and Keeping Arizona Water 

and Power Costs Affordable: The Current and Future Role of the Navajo Generating 

Station.’’ 

CAWCD, commonly referred to as the Central Arizona Project (CAP), was established in 1971 as the state agency that manages and operates the CAP system, collects revenues from ratepayers and, since substantial project completion in 1993, repays the federal government for the reimbursable costs of construction. Our goal at 

CAP is to provide an affordable, reliable and sustainable supply of Colorado River 

water to cities, industries, farms, and Tribal communities in a service area that includes more than 80 percent of Arizona’s population. We have successfully achieved 

this goal for the past 25 years. 

Background 

Central Arizona Project, constructed by the Bureau of Reclamation (BOR) for the 

State of Arizona, is a multi-purpose water resource development and management 

project that delivers Colorado River water into central and southern Arizona. The 

largest supplier of renewable water in Arizona, CAP delivers an average of over 1.5 

million acre-foot of Arizona’s 2.8 million acre-foot Colorado River entitlement each 

year to municipal and industrial users, agricultural irrigation districts, and Indian 

communities (see attached map). CAP meets approximately 50 percent of municipal 

demand within its service area, including 45 percent of the City of Phoenix’s total 

water demand and more than 50 percent of the City of Tucson’s water demand. In 

addition, 47 percent of the long-term CAP entitlement is dedicated to Indian Tribal 

use, while 41 percent of current CAP deliveries support non-Indian agricultural production. 

These renewable water supplies are critical to Arizona’s economy and to the 

economies of Native American communities throughout the state. Nearly 90% of economic activity in the State of Arizona occurs within CAP’s service area. CAP also 

helps the State of Arizona meet its water management and regulatory objectives of 

reducing groundwater use and ensuring availability of groundwater as a supplemental water supply during future droughts. Achieving and maintaining these 

water management objectives is critical to the long-term sustainability of a state as 

arid as Arizona. 

CAP infrastructure includes a 336-mile-long delivery system that moves water 

3,000 feet uphill from the Colorado River. The system entails 14 pumping plants 

and one combination pumping/generating facility; 10 siphons that carry water under 

72 

riverbeds and washes; three tunnels; more than 45 turnouts that connect the CAP 

aqueduct with customers’ water delivery systems; a large storage reservoir; and a 

state-of-the-art control center. A large and reliable supply of baseload power is essential to operating CAP infrastructure and delivering water to its customers, including potable water treatment plants that must supply drinking water to millions 

of Arizona residents every day. 

CAP construction necessitated the development of new power generation facilities 

to provide a dedicated energy source for the operation of the system. The Colorado 

River Basin Project Act allowed the federal government to participate in the nonfederal Navajo Generating Station (NGS), near Page, Arizona, to provide power for 

pumping CAP water as an alternative to building additional dams along the Colorado River. Construction of NGS was the result of an environmental compromise 

brokered by then-Secretary of the Interior Stewart Udall. NGS also was intended 

to help maintain and improve the economies of the Navajo Nation and the Hopi 

Tribe by providing revenues for the Tribal governments and high-paying jobs for 

Tribal members. 

NGS was constructed by the Salt River Project Agricultural Improvement and 

Power District of Arizona, now part of the Salt River Project (SRP). In addition to 

BOR and SRP, other participants in NGS are NVEnergy (formerly Nevada Power 

Co.), Tucson Electric Power Co., and Los Angeles Department of Water and Power. 

In addition to providing CAP pumping energy, NGS also provides electricity to retail 

customers in Arizona, Nevada and California. BOR’s share of NGS’s annual output 

is 24.3 percent, or 546,750 kilowatts per year for the benefit of CAP. 

CAP maintains an ongoing, constructive dialogue with BOR and other federal 

agencies, including the Environmental Protection Agency, to discuss issues of mutual interest and concern. CAP also works closely with its customers regarding their 

needs and concerns. Our ongoing focus includes collaborative efforts to: 

• Manage water resources sustainably in partnership with CAP customers, 

BOR, the Colorado River states, and other stakeholders to assure long-term, 

affordable supplies of water; 

• Maintain access to critical energy supplies, including working collaboratively 

with the NGS participants to reduce plant air emissions and to explore cleanenergy options for the future; 

• Work with Tribes and other State and Federal parties, as appropriate, to fulfill provisions of Indian water rights settlements; and 

• Collaborate with other agencies on data—and information-sharing on water 

quality issues facing the Lower Colorado River. 

In addition, CAP is currently evaluating and adopting management practices focused on energy conservation including the ‘‘maintenance excellence program’’ which 

strives to maximize efficiency of the pumping and operating systems; an extensive 

waste management recycling system; ‘‘Green Fridays,’’ a modified work schedule 

that limits the use of the facility one day a week to reduce energy costs. 

Navajo Generating Station—Decisions that Impact Water and Power Costs 

Regulatory Issues: NGS is near numerous national parks, monuments, and wilderness areas, and controlling plant emissions has been and still remains a priority 

for CAP and the NGS participants. Pursuing that commitment, in the1990’s NGS 

participants invested more than $400 million in scrubbers to reduce sulfur dioxide 

emissions. In 2008, the plant began voluntary installation of additional environmental controls to reduce smog-forming nitrogen oxide (NOx). Installation of those 

emissions controls is now complete. The low-NOx burners with separated over-fire 

air (LNB/SOFA) cost approximately $46 million for installation on all three units 

at NGS. This price tag translates into expected increases in CAP energy rates of 

about 1 percent. 

Despite these ongoing investments in air quality improvements, NGS is now the 

focus of additional proposed regulatory requirements. The U.S. Environmental Protection Agency (EPA) is in the process of setting new rules to control NOx emissions 

at coal-burning power plants, including NGS, under the Regional Haze Rule of the 

Clean Air Act. CAP has been doing its part to support improvements in air quality 

and visibility associated with NGS. It is important to note, however, that the Clean 

Air Act identifies factors such as compliance costs, the remaining useful life of a facility, the degree of visibility improvements that might reasonably be anticipated 

from the use of existing technology, and other considerations in determining the appropriate technology to achieve improved visibility. CAP urges full consideration of 

these factors by the EPA in their regulatory decision making regarding the NGS. 

Potential Regulatory Impacts: While EPA is looking at low-NOx burners such 

as those now installed at NGS, the agency is also considering a different control system known as Selective Catalytic Reduction (SCR). In comparison to the cost impact 

73 

of low-NOx technology, SCR units alone would result in a 17% cost increase in CAP 

energy rates. The SCR system, combined with baghouses (which may be needed for 

downstream particulate control), has a potential price tag of more than $1 billion, 

as much as 20 times the cost of low-NOx burners. If the SCR/baghouse option is required at NGS, CAP energy rates could climb 33 percent higher than 2010 rates 

(or even higher if financing of less than 20 years is required). In both instances, 

these higher energy costs would affect water rates for the majority of Arizona’s population. Agricultural water users, both Indian and non-Indian, would be particularly 

hurt by these higher rates. 

Impacts from such regulatory requirements extend beyond the increased costs for 

energy and water. As authorized by Congress, NGS power not used for CAP pumping is sold to help repay CAP construction costs and to help fund Arizona Indian 

water rights settlements. These amounts are not trivial. Revenues from the sale of 

surplus NGS power now contribute about $22 million per year toward the $57 million in annual repayment obligations for the CAP. In the future, new contracts for 

the sale of surplus NGS power are expected to contribute $50 million or more per 

year toward CAP repayments and toward Indian water rights settlements, including 

those approved by Congress in the 2004 Arizona Water Settlements Act. 

The extremely high costs of the SCR/baghouse option could jeopardize continued 

operation of the NGS facility, with severe economic impacts to CAP users and to 

the Navajo Nation and the Hopi Tribe. Because a number of critical uncertainties 

face the Navajo plant, including the renewal of land and water leases and future 

federal air quality regulations, a near-term requirement to install SCR at Navajo 

raises a risk of plant closure. The NGS partners operate the Navajo plant as a revenue-generating business. Rather than risk a huge and potentially unrecoverable investment in retrofitting the plant with SCR technology prior to the resolution of 

these uncertainties, NGS participants have indicated they may pursue the path of 

closing the plant and meeting their energy needs through other means. As a consumer of NGS power rather than a retail marketer of power, CAP would be catastrophically impacted by closure of NGS, as would a number of Arizona Indian 

tribes. • Should the NGS facility cease operations, CAP would have to acquire a substitute source of pumping power at market rates. Using several forecasts, 

CAWCD estimates that CAP pumping energy costs could increase by 50 to 

300 percent (rising from $65 per acre foot to $95—$180 per acre foot) by 2017. • NGS employs 545 full-time employees, nearly 80 percent of whom are Navajo. 

The Kayenta Mine, which supplies coal to the plant, employs another 422 

Tribal members. In 2010, the power plant and mining operations contributed 

$137 million in revenue and wages to the Navajo Nation and its Tribal members and $12 million annually (88 percent of the Tribe’s annual operating 

budget) to the Hopi Tribe. 

• Indian Tribes would lose access to millions of dollars from the sale of surplus 

NGS power that otherwise could be available to assist with implementing 

their water rights settlements. 

• Agricultural users of CAP water could find the use of CAP water uneconomical. Non-Indian agricultural users could be forced to return to 

unsustainable groundwater pumping. Tribal users, having accepted delivery 

of CAP water in lieu of pursuing their claims to other water rights including 

groundwater, could find their newly-developed agricultural enterprises to be 

worthless investments. 

Collaboration and Information: CAP, along with other interested stakeholders, 

has participated since January 2011 in a series of collaborative dialogues to identify 

reasonable solutions that would: 1) meet the energy needs of CAP so that the project 

can fulfill its mission of providing affordable and reliable water supplies to Arizona 

and Tribal communities; 2) result in continued reductions in regional haze; 3) uphold provisions of the 2004 Arizona Water Settlements Act; and 4) expand clean energy opportunities, including use of renewable energy. To date, these discussions 

continue but have not resulted in a consensus solution. 

In addition, the Department of the Interior, working with the Department of Energy and the National Renewable Energy Laboratory, is drafting a proposal to undertake a study of energy infrastructure development within the Colorado Plateau 

region of the Hopi and Navajo reservations. CAP supports initiation of this study. 

Pumping of CAP water requires large amounts of baseload power to meet the 

project’s 24/7 operational requirements. No options exist now or in the immediate future of sufficient scale to supply the baseload power needs of the energy supply for CAP at a reasonable cost. This proposed study could provide 

critical information and analysis to assist CAP in evaluating and planning for future 

energy needs. 

74 

In conclusion, CAP’s mission to provide reliable, renewable and affordable water 

supplies to its municipal, industrial and Indian and non-Indian agricultural customers is a multi-faceted and highly collaborative effort. Continued access to consistent and reasonably-priced energy supplies is critical to the operation of the CAP 

system. Until renewable energy alternatives mature to the point where they can 

provide continuous baseload supplies, the NGS will remain essential to the CAP and 

its customers. I welcome the opportunity to discuss these issues with you, and I extend an invitation to all members of the Subcommittees to visit the Central Arizona 

Project at an appropriate time. 


66648.004.eps
75 

Mr. MCCLINTOCK. Thank you for your testimony. Our final witness is Mr. Dan Thelander, a Partner in Tempe Farming Company, 

from Maricopa, Arizona. Welcome. 

STATEMENT OF DAN THELANDER, PARTNER, 

TEMPE FARMING COMPANY, MARICOPA, ARIZONA 

Mr. THELANDER. Thank you, Chairman McClintock, and Members of the Subcommittees. My name is Dan Thelander, and I am 

a partner in our family farm, Tempe Farming Company. We farm 

cotton, wheat, alfalfa, on about 2,500 acres in Pinal County, which 

is about 40 miles south of Phoenix, Arizona. 

Maricopa Stanfield Irrigation and Drainage District, MSIDD, 

provides our irrigation water. MSIDD covers about 70,000 acres 

and every year delivers about 110,000 acre-feet of groundwater, 

and 160,000 acre-feet from the Central Arizona Project. 

As you have heard, the CAP gets its power from the Navajo Generating Station. MSIDD, the Family Farm Alliance, and many others from Arizona, have been working to raise public awareness of 

the huge impact that this EPA decision could have on our livelihoods. 

With the already completed installation of low NOx burners at a 

cost of about $45 million, the increased cost to the power customers 

will raise the cost of CAP water in the range of about 50 cents per 

acre-foot. On my farm, we use about 6,700 acre-feet of CAP water 

per year, which will equate to an increased annual cost of about 

$3,300. 

Unfortunately, with the EPA considering the second option, the 

SCR will bag houses, that billion-dollar cost at NGS translates into 

an increase of water rates to our district and my farm to the tune 

of at least $16 per acre-foot. 

So for the 6,700 acre-feet of CAP water that our farm buys, that 

equals $107,000 every year. Power companies will have the luxury 

of passing along their increased costs to their hundreds-of-thousands of customers. 

Can Tempe Farming pass along its $107,000 cost increase? The 

answer is no. Our cotton and wheat is sold on the world market, 

and there is no way that I can just raise my prices just because 

my costs go up. 

Local dairies that buy our alfalfa won’t be able to raise their milk 

prices to pay for a huge increase in feed costs. MSIDD pays about 

$41 per acre-foot of CAP water. A $16 increase will be devastating 

to the farmers in my county. 

The bottom line is that we will not be able to afford the water. 

MSIDD would have to turn to increased groundwater pumping, but 

the district cannot physically pump an additional 160,000 acre-feet 

to replace the CAP water. 

So what happens then? Here is my prediction. As much as onethird of the district may go out of production for lack of water. A 

lot of farmers go out of business, and the lack of farming will hurt 

the entire community because farmers will buy less tractors, less 

fertilizer, less labor will be needed, which equals higher unemployment. 

What would be gained by forcing NGS to do the expensive SCRs? 

The additions of SCRs is not for health reasons. It is for visibility 

76 

only, but the gain will be so slight that the human eye won’t even 

be able to detect the difference. 

Why would the EPA do this and cause so much economic hardship on all of us? An April 3 Time Magazine interview with EPA 

Administrator Lisa Jackson gives some insight into the mindset of 

the EPA. 

Time asked her the question, ‘‘Can the United States balance environmental protection and job creation?’’ She answered and I 

quote, ‘‘They have been balanced in this country for 40 years as 

long as there has been an EPA. We have done it while our country 

has prospered.’’ 

I can tell you that if the EPA requires the additional SCRs that 

these goals will not be balanced in my community. Far from prospering, our farmers and businesses will struggle to make ends 

meet, and we will have more unemployment. 

I submit to you that sometimes there is a limit to what businesses can absorb in increased costs by government regulations, 

and this is one of those times. Pinal County agriculture cannot absorb the huge increase in water costs that the SCRs would cause. 

Chairman McClintock, and Young, and Members of the Subcommittees, please do whatever you can do to deter the EPA from 

forcing the expensive SCRs on the Navajo Generation Station. 

Thank you for inviting me here today. 

[The prepared statement of Dan Thelander follows:] 

Statement of Dan Thelander, Partner, Tempe Farming Co., and 

Vice President of the Board of Maricopa Stanfield Irrigation District 

Chairman McClintock, Chairman Young, and Members of the Subcommittees, 

My name is Dan Thelander. I am a partner in our family farm, Tempe Farming 

Co. We farm in Pinal County, which is about 40 miles south of Phoenix, Arizona. 

We produce cotton, durum wheat, barley, and alfalfa on about 2500 acres. 

We are water customers of Maricopa Stanfield Irrigation and Drainage District, 

(MSIDD) and I serve on the Board of Directors. MSIDD serves about 70,000 acres 

and every year delivers about 110,000 acre feet of ground water and 160,000 acre 

feet from the Central Arizona Project. All together, our district and 3 other large 

irrigation districts in Pinal County utilize about 60% of the agricultural water that 

the CAP delivers annually, or about 400,000 acre feet per year to about 200,000 

acres. 

Most of you are aware that the Bureau of Reclamation is a part owner of the 

Navajo Generating Station and that the CAP uses its power to pump water from 

the Colorado River into the CAP Aqueduct, which in turn runs to our district. 

MSIDD, the Family Farm Alliance, and many others from Arizona have been working to raise public awareness of the huge impact that an EPA decision could have 

on our livelihoods. 

Navajo Generating Station is a fairly new plant and very clean, but the EPA is 

debating the possibility of requiring Salt River Project, the operator of NGS, to install additional equipment to improve visibility near the plant. 

Salt River Project, part owner and operator of NGS, has already completed installation of low NOx burners at a cost of about $46,000,000. This, in turn, will be 

passed along to the power customers and will raise the cost of CAP water in the 

range of $.50 per acre foot. On my farm, we use about 6700 acre feet of CAP water 

per year which will equate to an annual cost of about $3300. 

Unfortunately, the EPA is considering a second option. It is selective catalytic reduction (SCR) with bag houses. This would cost something north of $1 billion dollars! This billion dollar cost at NGS translates into an increase of water rates to 

our district to the tune of at least $16 per acre foot. When you do the math on that 

for 6700 acre feet of water that our farm buys, it equals $107,000 every year. 

Power companies will have the luxury of passing along the increase in costs to 

their hundreds of thousands of customers. Can Tempe Farming Co. pass along a 

$107,000 cost increase to our customers? The answer is NO. Our cotton and wheat 

is sold on a world market, and there is no way that I can just raise my prices just 

77 

because my costs go up. Local dairies that buy our alfalfa won’t be able to raise 

their milk prices to pay for a huge increase in feed costs. MSIDD currently pays about $41 per acre foot for CAP water. A $16 increase will 

be devastating to the farmers in my county. The bottom line is we will not be able 

to afford the water. The CAP was supposed to reduce groundwater pumping in Central Arizona, but if farmers can’t afford the water, MSIDD would have to turn to 

increased groundwater pumping, which. Although groundwater pumping will be 

much less costly than the CAP water, the district cannot physically pump an additional 160,000 acre feet to replace the CAP water. So, what happens then? 

Here is my prediction: 

1) many acres don’t get farmed, possibly as much as 1/3 of the district may go 

out of production for lack of water (This happened in the 1980’s prior to CAP 

water for our area. Farmers had relied totally on groundwater, and as the 

water table dropped, many thousands of acres were fallow) 

2) a lot of farmers go out of business 

3) those farmers that hang on make less money 

4) the lack of farming hurts the entire community because the economic ripple 

effect means less money to buy tractors, fertilizer, seeds, and, yes, less labor 

needed, which all equals higher unemployement 

Apart from the straight economics involved, one of the major reasons for the creation of the CAP was to preserve groundwater for future generations and for 

drought purposes. Since 1987, when the CAP was started, MSIDD has delivered 3.8 

million acre feet of renewable CAP water, which has essentially preserved that 

same amount of water in underground aquifers. Prior to the CAP, groundwater levels were declining yearly. 

Another resulting problem from excessive pumping was land subsidence, which 

was occurring regularly. If farmers cannot afford the CAP water and deliveries 

cease, we can expect this overdraft of groundwater and the subsidence problems to 

begin again. Through time, the dropping groundwater levels will increase pumping 

costs, which will continue to pressure farmer’s ability to survive. 

This is doubly frustrating because in the Arizona Water Settlements Act of 2004, 

farmers provided their allocation of CAP water which was used to settle claims of 

the Gila River Indian Community. In return for giving up their long range allocation, agriculture was promised adequate and affordable CAP water through the year 

2030. Now, the same government that we struck a deal with in good faith is considering artificially driving up the cost of that water to unaffordable levels. 

What would be gained by forcing NGS to do the expensive SCRs instead of the 

lower cost low nox burners? Less lung cancer cases or heart attacks? No, remember, 

the reasons cited for the additions of SCRS is not for health issues. It is for visibility 

reasons only, and the air will be ever so slightly clearer, so slight that the human 

eye couldn’t even detect the difference. 

Why would EPA do this, and cause so much economic hardship on all of us? 

An April 3rd Time Magazine interview with EPA Administrator Lisa Jackson 

gives insight into the mindset at EPA. Time asked her the question, ‘‘Can the U.S. 

balance environmental protection and job creation?’’ 

She answered, and I quote ’’ They have been balanced in this country for 40 years, 

as long as there’s been an EPA. We’ve done it while our country has prospered’’ End 

quote. 

If the EPA requires the additional SCRs, I can tell you that those goals won’t be 

balanced in my community. 

Far from prospering, our farmers, workers, and businesses will struggle to make 

ends meet. 

I submit to you, that some times there is a limit to what business can absorb in 

increased costs of government regulations, and this is one of those times. Pinal 

County agriculture cannot absorb the huge increase in water cost that the SCRs 

would cause. 

Chairman McClintock, Chairman Young, and Members of the Subcommittees, 

please do what ever you can to deter the EPA from forcing the expensive SCRs on 

Navajo Generating Station. 

Thank you for inviting me here today. 

Mr. MCCLINTOCK. Thank you very much. We will now move to 

questions, and I would begin with Mr. Silverman. I want to nail 

this down right away. We are told, oh, the EPA doesn’t intend to 

close the Navajo Generating Station. What is the impact of imposing a billion dollars of new requirements on that station? 

78 

Mr. SILVERMAN. Well, as stated in my testimony, we are in a 

very unique position at NGS. The participants are in the beginning 

stages of negotiating an extension of the life of the project. 

Currently, it expires, the resource documents, the lease on the 

plant site, the grants of right-of-way for transmission and the railroad that brings coal from the Black Mesa, all of these expire in 

2019 and later. 

And so we are busily trying to extend that life, but we are not 

there yet. Once we have reached agreement on those documents, 

they must be submitted to the Department of the Interior, at which 

point a NEPA process begins, which we have estimated could take 

as long as six years to complete. 

The participants would have no way of knowing the outcome and 

whether or not the plant could continue at that point. Meanwhile, 

the EPA might have imposed the installation of SCRs and possibly 

bag houses. 

You could not amortize the costs, the one billion plus costs, within that few years, and so the participants would be faced—and not 

because the EPA has mandated it, but because they would have to 

make that economic determination whether to close the plant. 

Mr. MCCLINTOCK. So the EPA doesn’t close the plant. The EPA 

simply imposes such enormous additional costs on the plant that 

it sinks it. Is that accurate? 

Mr. SILVERMAN. I might argue with your choice of words, but the 

outcome is the same. 

Mr. MCCLINTOCK. So by imposing the costs, they end up closing 

the plant? 

Mr. SILVERMAN. Yes, sir. 

Mr. MCCLINTOCK. This is the kind of semantics that we are used 

to dealing with from the environmental left, and it is infuriating. 

You mentioned how much of the proceeds of the economic activities 

of the Navajo Generating Station are going to The Navajo Nation? 

Mr. SILVERMAN. The total, I believe—the total that I mentioned 

was $140 million. 

Mr. MCCLINTOCK. So, $140 million a year going The Navajo Nation as royalties and as fees. So if the Navajo Generating Station 

is forced to close because of the imposition of these regulations, 

what happens to that $140 million going to The Navajo Nation? 

Mr. SILVERMAN. It goes away. 

Mr. MCCLINTOCK. We have been told, well, the Navajo Generating Station is one of the biggest sources of emissions among 

power plants in the West. Is it not also one of the biggest generators of electricity in the West? 

Mr. SILVERMAN. Yes, sir, it is, and that is a dilemma in describing, for example, NOx emissions, which may because it is so big be 

the third largest, but if you look at it on a basis of kilowatt hours 

produced, actually 297th. 

Mr. MCCLINTOCK. And the obvious intention by the Minority is 

to mislead folks into believing that this is a source of monumentally reckless emissions. In fact, have you not made enormous 

investments in emissions control? 

Mr. SILVERMAN. Mr. Chairman, we absolutely have. It is well in 

excess of a half-a-billion dollars for initially the particulate control 

at 99-1/2 percent, and the SO2 control scrubbers in the 90 percent 

79 

removal, and most recently as you have heard today, the over-fire 

air at $46 million. 

Mr. MCCLINTOCK. And am I correct that the new EPA considerations of the regulations is not over health related issues, but over 

view shed issues? 

Mr. SILVERMAN. It is. In fact, a regional haze is an issue. It is 

a visibility issue and not a health issue. 

Mr. MCCLINTOCK. And the assumption obviously is that it is the 

power plant rather than everything from forest fires to atmospheric 

conditions that is contributing to the haze in the area. Is it correct 

that once those billion dollars of regulatory costs are imposed in a 

theoretical occasion that the plant could actually remain open 

under that whole burden, would there be any difference visible to 

the naked eye in haze over the Grand Canyon? 

Mr. SILVERMAN. Mr. Chairman, we have contracted with an independent consultant to perform visibility modeling based on the results, and which used EPA’s only models to determine the assumptions, and we concluded that NOx reduction from installation of 

SCRs resulted in imperceptible visibility improvements. 

Mr. MCCLINTOCK. We also have been told of the conditions of 

poverty still suffered by many in The Navajo Nation. What would 

the impact of the closure of the Navajo Station be to poverty rates 

in The Navajo Nation? 

Mr. SILVERMAN. Well, as has been testified to today, I don’t know 

about the poverty rate, but certainly a loss of a thousand permanent jobs, and during the course of a year, a thousand temporary 

jobs. 

Mr. MCCLINTOCK. Thank you very much. The Chair would also 

add that we have been joined by Congressman Schweikert of Arizona, and I would ask for unanimous consent that he be allowed 

to sit with the Subcommittees and participate in the hearing. Hearing no objection, so ordered. And now I yield to the Ranking Member, Ms. Napolitano. 

Mrs. NAPOLITANO. Thank you, Mr. Chair, and just as a little bit 

of a—not housekeeping, but rather to Mr. Thelander from the 

Tempe Farming, is the County of Pinal one of four to receive USDA 

subsidies? 

Mr. THELANDER. I am sorry, Ma’am, but I could not hear your 

question. 

Mrs. NAPOLITANO. I am sorry. The county, Pinal County, does it 

not receive USDA subsidies for farming? 

Mr. THELANDER. Yes, our farming company does participate in 

government farm programs, yes, Ma’am. 

Mrs. NAPOLITANO. OK. Because the USDA website indicates that 

it received $443 million from 1995 to 2009, and $38 million in 2009 

alone, and Pinal County, $668,000. So there is help in that area? 

Mr. THELANDER. Yes, Ma’am, the farmers in our area have participated in government farm programs, just as they have all across 

the United States. 

Mrs. NAPOLITANO. OK. And to Mr. Modeer and Mr. Silverman, 

not in percentage, but in pennies per kilowatt per hour, can you 

provide the following information? What is the current cost of 

power produced at NGS in cents per kilowatt, and the cost of power 

produced if SCR technology is installed? And then the cost amorVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00085 Fmt 6633 Sfmt 6602 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
80 

tized over 20 years, and what alternatives do you have for replacement power, and how does the costs compare in cents per kilowatt 

hour? Usually it is in percentages. I want it in cents, and if you 

can break it down. 

Mr. SILVERMAN. Well, the current number, the production costs 

are 3-1/2 to 3.8 cents per kilowatt hour. I would have to provide 

you for the record and will do that based on your other assumptions. 

Mrs. NAPOLITANO. If you would, please. 

Mr. SILVERMAN. In terms of replacements, currently of course 

coal-fired generation would not be a replacement for the Navajo. 

The most likely replacement would be gas-fired generation. 

Renewables. There just are not enough renewables to replace 

2,250 megawatts anywhere near a reasonable period of time. 

Mrs. NAPOLITANO. OK. To Mr. Masayesva, how has the strip 

mining impacted the Hopi Tribes’ groundwater supply? 

Mr. MASAYESVA. The coal slurry operation consumed over 45 billion gallons of water before the slurry line was forced to shut down 

at the end of the December of 2005, and that amount of water as 

I have stated in my testimony would have sustained the entire 

Hopi Nation for over 300 years. 

Mrs. NAPOLITANO. Thank you, and Mr. Johnson, can you put the 

cost of water in perspective from the Navajo aquifer, how much 

does the Navajo pay, and how does that compare to that of Peabody? 

Mr. JOHNSON. I thank you for the question. There is an acre-foot 

of water, and there are 325,851 gallons. Now, if you add and price 

that with a penny, that is $3,258. That is what my community is 

paying, and Peabody is paying at an industrial rate of $900 per 

acre-foot for their mining operation. 

Mrs. NAPOLITANO. That is a very stark comparison. And to Mr. 

Silverman and Mr. Modeer, it has been 12 years since the EPA established the Regional Haze Rule in 1999 to control pollution in a 

Class One area. 

In the preliminary BART ruling which is due out late this summer, and the final ruling due in 2012, the owners would have to 

install technology within five years, or by 2017. Is this really a surprise at all after almost two decades since the Haze Rule was made 

that compliance would be required? 

Mr. SILVERMAN. It is not a surprise, Congresswoman, but it is a 

dilemma as I have outlined previously with respect to the timing 

of the renewal of the resource documents necessary to keep the life 

of the Navajo Generating Station after 2019. 

Mr. MODEER. Well, the Regional Haze Rule that will be made by 

the EPA, a preliminary ruling sometime this summer, and a final 

ruling sometime after that, has a significant impact. 

And as I testified on the Central Arizona Project, it is our single 

source of power. We are the largest power consumer in Arizona, 

and has 95 percent of the power supply, and it has a substantial 

impact on the cost of our operation, and the cost of water to our 

areas customers who use and depend upon the reliability, and sustainability of the Central Arizona Project water. 

Mrs. NAPOLITANO. Thank you. 

Mr. MCCLINTOCK. Thank you very much. Mr. Gosar. 

81 

Dr. GOSAR. Mr. Silverman, and Mr. Masayesva, in your testimony, you directly stated that Native Americans have been exploited by the operators of the generating station. I was wondering 

if you could repeat what percentages of employees at the Navajo 

Generating Station are Native Americans again? 

Mr. SILVERMAN. Currently, over 80 percent of NGS employees 

are Navajo, which equates to over 450 Navajo people. 

Dr. GOSAR. And what is the average salary for these employees? 

Mr. SILVERMAN. With benefits, $105,000 a year, well above the 

average for the area. 

Dr. GOSAR. So I am in Coconino County, and so am I am not mistaken, the average in Coconino County for the jobs that are available is about $48,000 is it not? 

Mr. SILVERMAN. That sounds consistent with our understanding. 

Dr. GOSAR. Are there any other jobs on The Navajo Nation or 

Hopi villages that pay over a hundred-and-some-thousand dollars 

that you are aware of? 

Mr. SILVERMAN. Not that I am aware of. 

Dr. GOSAR. OK. Mr. Justice, do you happen to know what an average job in the Page area pays, excluding the plant? 

Mr. JUSTICE. It would be a service entry job in the tourism industry, and I would say it would be very, very low, right at the poverty 

level. 

Dr. GOSAR. So probably about $20,000 or less, with no benefits? 

Mr. JUSTICE. I would say so, yes, because of the jobs are parttime jobs and are seasonal. 

Dr. GOSAR. And in your testimony, you testified that the owners 

and contractors employ more than a thousand temporary skilled 

workers during the annual overhauls. What happens when it coincides with the area’s tourism off-season? Any idea on the average 

on how many Native Americans get those jobs, Mr. Silverman? 

Mr. SILVERMAN. During the annual outage period, the percentage 

of workers at the NGS, both SRP employees and contractors, increases to around 90 percent. 

Dr. GOSAR. And can you give me for those couple of months in 

doing that what kind of pay do those jobs provide? 

Mr. SILVERMAN. On average, $25,000 for the two months. 

Dr. GOSAR. Really? Wow. And the other side keeps talking about 

jobs. Interesting. Now, there is another problem as I understand 

about renewables, is that not only are they not available, but there 

are also the same impediments that you are facing with the NEPA 

processes, because I know that the Navajo community has been 

trying to put up some wind generators that have been held back 

by the Environmental Protection Agency with regard to actually 

being put on-line. Are you aware of some of those same implications to you? 

Mr. SILVERMAN. We are aware. 

Dr. GOSAR. And there is no way—I mean, I would like an all of 

the above type of a policy, and so there is no way that we could 

actually put renewables at this stage in your judgment to facilitate 

that power, right? 

Mr. SILVERMAN. No, sir. 

Dr. GOSAR. From Mr. Modeer, how do you feel about that? 

82 

Mr. MODEER. Well, the Central Arizona Project has to have baseload power. We operate 24 hours a day, 7 days a week, and most 

of our pumping is done during the nighttime hours to reflect economies of electrical use. 

The replacement of that kind of power with renewables simply 

does not work. I could be employed as we are studying internally 

to use for peaking powers at some point in time in the future, but 

it simply does not provide baseload power, and it would not be 

something that would be sufficient for the pumping of electrical 

needs of the Central Arizona Project. 

Dr. GOSAR. Mr. Thelander, I know that Arizona has this history 

of ranchers and farmers giving up their water in heroic aspects. I 

mean, the Teddy Roosevelt Dam was one of those, in which everybody benefitted for the whole area. 

And CAP water and Lake Powell are the same way. Isn’t there 

an implied or actually an explicit contract with those farmers and 

ranchers, particularly in the Pinal area in regard to this water? 

Mr. THELANDER. Yes, we heard earlier about the large water settlement that was done to settle Indian water rights, and the farmers in my area gave up our long-term right to buy CAP water in 

return for affordable CAP water. 

And so we are supposed to have affordable water until the year 

2030, but if the CAP raises the cost of water $16 a foot, it will not 

be affordable, and in my opinion that is breaking the promise that 

was given to us when we went into this big water settlement. 

Dr. GOSAR. Mr. Thelander, if we were to put the businesses in 

the southern part of Arizona out of business, particularly the farmers, are we able to feed ourselves in this country? 

Mr. THELANDER. Well, I guess the answer would be that we can 

put the farmers in Pinal County out of business, and the country 

is not going to go hungry, but overall these things are accumulative 

around the country, and if we put the farmers out of business in 

Pinal County, there goes the alfalfa production, the corn production, that goes to dairies that provide milk products for the Phoenix 

area, the Arizona area. 

And so, yes, it is going to make an impact, and these types of 

things around the country that have an impact, they all add up. 

Dr. GOSAR. All right. Thank you very much. 

Mr. MCCLINTOCK. Mr. Grijalva. 

Mr. GRIJALVA. Thank you, Mr. Chairman, and I want to thank 

the community members from the Hopi and The Navajo Nation for 

providing the Committee and the Members with the very important 

and necessary historic perspective on this discussion. 

I fully realize and appreciate the economic realities that The 

Navajo Nation and the Hopi Nation face with regard to the generating station, and I say that because I think that we have a water 

settlement, an Indian water settlement, in Arizona because of past 

abuses and exploitation of a very valuable and necessary resource, 

which is water. 

I would suggest to my good friends on the Committee that the 

exploitation and abuse of resources with regard to Indian country 

in Arizona was not limited to water, and it was extended to all extractions, including the one that we are talking about today. 

83 

Nevertheless, we are in this time now, and we have to deal with 

the immediate, and I was going to ask Mr. Modeer that part of the 

discussion today had to do partially with increasing the portfolio of 

energy sources. 

Can you talk about that a bit, and then for both yourself and I 

think Mr. Silverman, to the next question, which would have to do 

with the alternatives to whatever rulemaking or decision making 

recommendation that comes out from the EPA. 

We are assuming that this is going to be something that will 

break the bank and cause this economic collapse that we have been 

talking about most of the day. I don’t think that is going to happen, 

but that is why we are here. 

Discussions of alternatives that begin to reach that reasonable 

accommodation that we spoke of earlier, have those gone on and 

are all the stakeholders willing to work, and working on alternatives? So if we could begin with you, Mr. Modeer. 

Mr. MODEER. For the Central Arizona Project, we have been internally doing a considerable amount of study and research on the 

manner in which renewables might fit into our energy portfolio for 

the future. 

As I said earlier, I think right now we are looking at them in 

terms of a source for peaking power, but certainly we recognize 

that at some point in the future that the Navajo Generating Station may very well run out of its useful life. 

So looking at the various types of energy, whether it is renewable 

types of energy, or whether it is modular or nuclear, or participating in other energy projects that may be constructed in the future, and something that is prudent for us to study at this point 

in time because it takes a significant period of time to develop 

those energy alternatives. 

Mr. GRIJALVA. OK. There is a finite to the extraction, the coal. 

There is a finite point, and as you talk about a transition to the 

more environmentally clean technology, and we are debating which 

is better, and does it suffice, and you have mentioned that in your 

testimony, we are also talking about a transition potentially to alternative energy sources given the finite situation with the coal. Is 

that what you have mentioned? 

Mr. MODEER. We are. I think that we have been engaged with 

a number of stakeholders since January of 2011 to look at what is 

an acceptable pathway to resolve the issues that we are in conflict 

with over here. 

Part of that discussion involves the potential of a study by the 

Department of the Interior and the Department of Energy, and the 

National Renewable Lab is to look at how different forms of energy 

generation can be developed in both the Navajo and the Hopi 

lands, and in other parts of Arizona, to resolve some of these issues 

and the transition—— 

Mr. GRIJALVA. Do you see parallel lines that we are talking 

about, the potential conversation to other sources, and the potential 

transition to different technology? Are they parallel or are they in 

conflict? 

Mr. MODEER. I think that is the intent that the majority of the 

stakeholders would like to see this process moving in parallel to 

84 

provide us the information needed to make a very thoughtful decision about where to go for the future. 

Mr. GRIJALVA. We appreciate that. 

Mr. SILVERMAN. I don’t know that I can add to what General 

Manager Modeer has said. The negotiations amongst stakeholders 

are not concluded, and it is not clear what the outcome will be. 

Mr. GRIJALVA. OK. But the process is ongoing? 

Mr. SILVERMAN. The process is underway, and it is being done 

in good faith by all parties. 

Mr. GRIJALVA. All right. Thank you, Mr. Chairman. 

Mr. MCCLINTOCK. Mr. Schweikert. 

Mr. SCHWEIKERT. Thank you, Mr. Chairman, and thank you for 

letting a financial services person come and visit your Committee. 

Being someone who also spends a lot of time up in Indian lands, 

and this is a really big deal to our state, and has a real impact, 

and to Mr. Modeer, help educate me a bit. The baseload for the 

CAP is what? 

Mr. MODEER. Baseload power refers to the fact that the power 

is constant, and it is always available to us. It is not intermittent 

due to weather or nighttime, which is for solar and for when the 

wind doesn’t blow, you don’t have wind energy. 

So baseload power means a constant source of power that is 

there 24 hours a day. 

Mr. SCHWEIKERT. How big is the baseload that you all use now? 

Mr. MODEER. We use almost 500 megawatts of power on an annual basis, the largest user in Arizona. 

Mr. SCHWEIKERT. And you mentioned before, Mr. Modeer, that it 

was in the evenings that you did much of your pumping? 

Mr. MODEER. That is correct. We do a majority of our pumping 

in the nighttime hours because it is more efficient energy wise to 

move water during that period of time, and certainly toward the 

end of the year lessens our need to go to the open market for power 

when we have run through our amount of the Navajo Generating 

Station. 

Mr. SCHWEIKERT. So what do you peak at in total usage? 

Mr. MODEER. We deliver a maximum of about 3,700 feet per second out of the Mark Wilmer Pumping Plant 

Mr. SCHWEIKERT. But you were just addressing that you were at 

500? 

Mr. MODEER. 500 megawatts of power, the total for the CAP on 

an annual basis. 

Mr. SCHWEIKERT. And do you ever use more than that? 

Mr. MODEER. And our peak pumping comes out of the Mark Wilmer Station and off the Colorado River, where we have six 60,000 

horsepower pumps. It consumes a tremendous amount of energy. 

Mr. SCHWEIKERT. And this is for anyone in the room. If you have 

never gone and see the siphons and the lifts, it is stunning, the 

scale of it. OK. Let us say right now that, let us say, tomorrow, 

that we are going to move to an environment where tomorrow you 

have to move to alternative energies, and you need 500 megawatts. 

What would it take to get there? I mean, is that even practically 

possible even in the near term, let alone in the long term? 

Mr. MODEER. My personal opinion is that I don’t believe it is 

practical that you could replace that much. It would take a tremenVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00090 Fmt 6633 Sfmt 6602 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
85 

dous amount of a renewable energy footprint to replace that type 

of power. 

And again it would be intermittent power. It would not provide 

the needed power for the continuation of the operation of the Central Arizona Project. I think that probably the Salt River Project 

could address what the footprint would be, but it is multiple times 

renewable energy times baseload energy, out of such as Navajo 

that would be needed to be produced to generate the same energy, 

and not necessary at the appropriate periods of time. 

Mr. SCHWEIKERT. And this may be even a flip side question that 

maybe Mr. Silverman would know. If suddenly our CAP water 

costs went up dramatically, and this is for whoever can answer it, 

what does that do to a number of our water agreements and our 

water compacts if now all of a sudden the cost structure changes? 

Mr. MODEER. Congressman, the increase in power costs for the 

installation of SCRs is about 17 percent, or about $8.33 on the existing price of $49 per acre-foot, a substantial increase. 

If bag houses are required, then it is a 33 percent increase, about 

$16.30, added on to the current price, and so for agriculture use, 

it is a significant expense, and it probably drives them off the CAP 

water. 

If we lose the plant entirely, then you are looking at somewhere 

between a 50 and 300 percent increase, depending on the price of 

natural gas, for us to go to the open market and buy power, not 

counting the fact that we would lose the opportunity to sell excess 

power, which generates about $55 million in revenue. 

Mr. SCHWEIKERT. But Mr. Chairman and Mr. Modeer, if you then 

were now buying in the open market, now you are completely subject to the whims of the market. So, today these contract prices can 

be dramatically different than in a couple of years from now, and 

vice versa? 

Mr. MODEER. Congressman, that is correct. If you look at the history of power costs based upon natural gas prices, they go up and 

down. 

Mr. SCHWEIKERT. And I am down to my last 30 seconds. The 

Navajo Generating Station, does anyone have a guess on what the 

economic life is? How much time does it have left? 

Mr. SILVERMAN. Our goal is to extend the life to 2044. 

Mr. SCHWEIKERT. OK. And the process for that extension? 

Mr. SILVERMAN. The negotiation of several agreements, plant site 

lease with the Navajo Tribe, and the issuance of what are called 

323 grants for the plant site, transmission that supports the plant, 

and the railroad, to be issued by the Department of the Interior, 

and a water service contract extension from the Bureau of Reclamation, and of the Department of the Interior, and negotiations 

with Peabody Coal Company, or the Peabody Energy Company, for 

coal fuel to produce electricity. 

Mr. SCHWEIKERT. OK. Mr. Chairman, I have no other questions 

and I am over my time, and I appreciate it, but even that renegotiation as you heard is going to have a lot of eyes looking at this facility, and making sure that they are in compliance and doing good 

things. Thank you, Mr. Chairman. 

86 

Mr. MCCLINTOCK. Thank you. In consultation with the Ranking 

Member of the Subcommittee, we have determined that we won’t 

need a third round. Ms. Napolitano, you have a motion? 

Mrs. NAPOLITANO. Yes, Mr. Chairman. I have a letter, or actually 

it is a report by Public Opinion Strategies by Fairbank, Maslin, 

Maullin, Metz and Associates. It has key findings from a survey of 

Arizona voters regarding the increased use of renewable sources for 

electricity production, dated March 23, indicating that out of 600 

Arizonans surveyed, 87 percent believe that energy is affordable, 

and is important, but 63 percent agree that having more affordable 

electricity is not worth the pollution from coal burning power. 

Mr. MCCLINTOCK. All right. Without objection, so ordered. 

[NOTE: The report has been retained in the Committee’s 

official files.] 

Mr. MCCLINTOCK. And with that, I would like to thank this panel 

of witnesses for their valuable testimony. Members of the Subcommittees may have additional questions for witnesses. We would 

ask that you respond to these in writing. The hearing record will 

be open for 10 business days to receive these responses. 

And the Chair would also like to thank Dr. Gosar again for his 

persistence in directing the Subcommittees to this matter, and if 

there is no further business, and without objection, the Subcommittees stand adjourned. 

[Whereupon, at 4:59 p.m., the Subcommittees were adjourned.] 

[Additional material submitted for the record follows:] 

[A list of documents retained in the Committee’s official files 

follows:] 

• Hopi Tribe, Comments on EPA’s Advanced Notice of Proposed 

Rulemaking for Nitrogen Oxide Emissions at the Navajo Generating Station dated March 1, 2010 

• Public Opinion Strategies, Memorandum to Interested Parties 

dated March 23, 2011, regarding ‘‘Key Findings from a Survey 

of Arizona Voters Regarding Increasing the Use of Renewable 

Sources for Electricity Production’’ submitted by the Honorable 

Grace Napolitano 

87 

[A letter submitted for the record by the Arizna Westside 

Irrigation & Electrical Districts Association follows:] 


66648.008.eps
88 


66648.009.eps 66648.010.eps
89 

1SEC filings and Peabody analysis (values on a short-ton basis). 

2Peabody Form 10–K for the Fiscal Year Ended Dec. 31, 2010. 

3SEC filings and Peabody analysis (values on a short-ton basis). 

[A statement submitted for the record by G. Brad Brown, Senior 

Vice President for Southwest Operations, on behalf of Peabody 

Energy, follows:] 

Statement submitted for the record by G. Brad Brown, Senior Vice 

President for Southwest Operations, on Behalf of Peabody Energy 

Mr. Chairman and distinguished members of the Committee, my name is Brad 

Brown, and I am Senior Vice President for Peabody’s Southwest operations. 

I want to thank the Committee for providing Peabody this opportunity to offer 

written testimony to address the crucial subject of protecting long-term tribal energy 

jobs and the role of the Navajo Generating Station. 

By way of brief introduction, I am responsible for safety, engineering, environmental and financial activities associated with the Kayenta Mine in Arizona in addition to our Lee Ranch and El Segundo operations in New Mexico. I have been engaged in a variety of Southwest operations assignments throughout my 35-year tenure with Peabody. 

I grew up on the reservation, and have been honored to live and work with the 

Navajo and Hopi people. This gives me unique perspective into the importance of 

balancing stakeholder needs to maintain the vital value chain of assets—the 

Kayenta Mine, Navajo Generating Station and Central Arizona Project—that together deliver life-giving energy and water as part of an enormous Southwest economic growth engine. 

Peabody is the world’s largest private-sector coal company 1 and a global leader 

in clean coal solutions. Our operations fuel 10 percent of U.S. electricity and 2 percent of global power. We ship nearly a quarter billion tons of coal to customers in 

more than 25 countries on six continents each year 2—nearly 75 pounds of coal for 

every man, woman and child in the world.3

Our reach extends to nations representing more than half the world’s population, 

and we have access to some of the most rapidly growing markets for electricity, steel 

and coal conversion projects. We employ 7,200 workers, and our operations contributed more than $16 billion in direct and implied economic benefits this past year, 

which includes nearly $370 million in Arizona alone. 

Around the world, Peabody continues to demonstrate financial and industry leadership: We are a member of the Standard and Poor’s 500 Index, a Fortune 500 company, and ranked 21 on the Forbes 2010 listing of America’s Best Big Companies. 

Peabody is named on the BusinessWeek 50 list of best large U.S. companies and 

in 2010 achieved Coaltrans honors as the world’s leading coal company for the past 

30 years. 

This past year was the safest in Peabody’s history, and our credentials in the area 

of corporate and social responsibility continue to be recognized. Peabody was honored by the U.S. Foreign Policy Association for international corporate and social 

responsibility, and earned Communitas honors for ethical and environmental responsibility in 2011. Dual honors also were earned for directing the first land restoration project in Mongolia’s history, capping more than 30 major awards for safety, financial, environmental excellence and corporate responsibility in 2010. 

There are four areas that I will address in this testimony: • The role Kayenta Mine plays in delivering electricity and water to the Southwest while creating jobs and enormous economic growth; • Kayenta Mine’s record of excellence in operations, compliance, and environmental and community stewardship; • Energy alternatives for the Navajo Generating Station; and • Balanced regulation that puts people and technology first. 

I’ll address each of these one at a time. 

Kayenta Mine: Delivering Electricity and Water to the Southwest 

More than a half century ago, leaders from the Navajo Nation, the Hopi Tribe, 

Peabody Energy, Salt River Project and the federal government came together with 

a bold and unprecedented plan to deliver electricity and water to the Southwest. 

The vision included development of a large coal mine to fuel a major 2,250 megawatt power plant that would deliver electricity to Arizona, California and Nevada. 

Importantly, the plant also would provide power to move 1.5 million acre-feet of 

water each year from the Colorado River to cities, tribal communities, and agricultural districts in the central and southern region of Arizona through a complex sysVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00095 Fmt 6633 Sfmt 6621 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
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4 ‘Peabody Energy Celebrating 125 Years,’ copyright Peabody Energy. 

5 U.S. Department of the Interior, MMS, Reports of the Division of Minerals Revenue Management: American Indian Coal Royalties Calendar Years 1928–2000; http://www.onrr.gov/stats/ 

pdfdocs/comm_inc.pdf; Mineral Revenues 1995, Table 46 (General Federal and Indian Mineral 

Lease Terms). 

tem of aqueducts. These projects were contemplated when the need for electricity 

was doubling each decade and sparsely populated Sunbelt states were experiencing 

large population increases.4

In the Spring of 1961, Peabody acquired its first prospecting permit from the 

Navajo Nation, which paved the way for drilling and evaluation of the coal resources 

on Black Mesa in Northeast Arizona. 

As was the practice at that time for Indian coal leases, the permits included a 

form of lease agreement with financial terms pre-established by the U.S. Department of the Interior’s Bureau of Indian Affairs in consultation with the Tribe. The 

permit and lease provisions were prescribed by the Bureau of Indian Affairs and 

terms were largely non-negotiable. 

A second drilling and exploration permit was signed with both the Navajo and 

Hopi in the summer of 1964 for coal that was jointly owned by the tribes. Here, 

too, the form of lease to be executed with the tribes was predetermined by the Bureau of Indian Affairs with the input of tribal officials and was largely non-negotiable. 

At the time, the royalty provisions included in these leases were more lucrative 

for the tribes than the prevailing royalty rates for federal and Indian coal leases 

in the Western United States, including the federal coal leases that the U.S. Department of the Interior was issuing at the same time in the vast Powder River Basin.5

The Colorado River Basin Project Act of 1968 authorized the United States to participate as an owner in the Navajo Generating Station to provide power for the 

water delivery through what is called the Central Arizona Project. The project provides renewable water to 80 percent of the state’s population, and was negotiated 

and approved by then U.S. Secretary of the Interior Stewart Udall. The Central Arizona Project is Arizona’s largest electricity user, and transports water from the Colorado River to Phoenix and Tucson through a 336-mile system of canals. 

Peabody signed a letter of intent with Salt River Project in 1968 and executed a 

coal supply agreement in the summer of 1970. Kayenta Mine was the sister operation to the Black Mesa Mine, which also is located in Peabody’s lease area on the 

Navajo and Hopi reservations. The Black Mesa Mine was developed three years before Kayenta Mine to fuel the Mohave Generating Station in Laughlin, Nev., operated by Southern California Edison. Together these projects were among the most 

complex greenfield energy developments in the history of the Southwest. 

In those early days, the Black Mesa was extremely remote. There were few roads 

and little infrastructure. Tribal families cooked over wood fires, heated their hogans 

with wood or coal and hauled water from local springs. Many young fathers were 

forced to leave the reservation in search of work in larger cities far away, and children were frequently sent to Bureau of Indian Affairs boarding schools, a combination that eroded the important family structure. 

Development of the Black Mesa Complex required creating 150 miles of roads, 

bringing power to the top of the mesa and building water wells for mining and domestic needs. A massive, sustained training program was implemented for hundreds 

of workers that literally trained shepherds to operate multi-million dollar draglines 

and other high-tech mining equipment. Tens of thousands of hours were tracked annually in those early days of training. 

The Black Mesa Mine operated from 1970 to 2005, shipping approximately 5 million tons of coal annually to the Mohave Station. Mine operations were suspended 

after the power plant owners elected to close the facility. Discussions continue with 

both tribes to resume Black Mesa Mine’s operations to fuel electricity generation or 

other coal-related projects. 

The Kayenta Mine began operating in 1970 as the sole supplier of coal to the 

Navajo Generating Station near Page, Ariz. Today the mine produces approximately 

8 million tons of low-sulfur coal each year that is transported to the plant via an 

83-mile closed loop rail. Coal reserves are available within the existing Peabody 

lease area to fuel the Navajo Station for another 30 years. Peabody’s lease agreements with the Navajo and Hopi remain in effect as long as the mine operates. 

Kayenta Mine employs more than 400 workers and about 90 percent of the workforce is Native American. Employees are well compensated, and jobs at the Kayenta 

Mine are highly sought after: Wages and benefits average $80,000 annually for repVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00096 Fmt 6633 Sfmt 6621 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
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6Dine’ Development Corporation, Window Rock, Ariz. 

7Peabody historical analysis of employee wages and benefits, tribal payments, NTUA revenue, 

water fees and scholarships. 8 U.S. Mine Safety and Health Administration data, 2011. 

resented workers, which is four times the median household income on the Navajo 

reservation.6

Since many employees support their extended families, the benefits of employment are far-reaching. Excellent career opportunities provide personal and professional satisfaction, and importantly, keep families together living and working on 

their traditional homeland and preserving longstanding cultural ways. 

Mining is a powerful economic force in the region, annually generating nearly 

$370 million in direct and indirect economic benefits.7 This includes $92 million in 

direct economic impacts each year through wages and benefits, tribal royalty and 

business payments, water fees, Navajo Transmission Utility Authority revenues and 

scholarships. The operations also generate nearly $24 million annually in property 

taxes and state sales tax. All told, mining on Black Mesa has delivered more than 

$3.1 billion in direct economic benefits to tribal and regional communities since the 

operations began. 

Excellence in Operations, Compliance, and Environmental and Community 

Stewardship 

There is a well known Navajo saying that, ‘‘We do not inherit the land from our 

ancestors, we borrow it from our children.’’ 

Similarly, Peabody recognizes that it operates as a guest on reservation lands, 

temporarily using the land for social and economic benefit prescribed by the tribes. 

Mined lands are restored for productive, sustainable use. 

Kayenta Mine is perennially recognized among the safest large surface operations 

in the nation. For example, workers achieved more than 1 million operating hours 

without a lost-time incident during 2009, and the mine’s 2010 safety rate was 0.42 

incidents per 200,000 hours worked, which is 89 percent lower than the U.S. industry average.8 Best practices are used for engineering and mine planning, reclamation planning and environmental monitoring, and all of these activities are carried 

out with respect for traditional ways. 

Even before the U.S. Surface Mine Control and Reclamation Act was put in place 

in 1977, Peabody pledged to restore mined lands to a condition that would be equal 

to or better than before mining occurred. Through careful consultation with the 

tribes, traditional healers, herbalists and range experts, Peabody created an awardwinning restoration program that is globally recognized. 

Based on the wishes of the tribes, lands are restored for livestock grazing, cultural 

plant use and wildlife habitat. A first-of-its-kind cultural plant program restores 

herbs, shrubs and trees used for medicinal and ceremonial purposes, and the program has earned numerous awards, including several honors from the U.S. Department of the Interior. 

Reclaimed lands are carefully monitored for a minimum period of 10 years before 

being permanently released back to the tribes. Restored lands are as much as 20 

times more productive for grazing than native range. The quality of the land is crucial for traditional people residing on Black Mesa, who make their livelihood 

through sheep and cattle ranching. 

Peabody has reclaimed nearly 330 acres of cultural plant sites through the complex and restored more than 10,000 acres of hardy rangeland at Kayenta Mine to 

date. The company also has created an award-winning managed grazing program 

that offers range management education for lease area residents and access to restored lands under Peabody’s control. The program was developed through broad 

consultation with Black Mesa residents, the Navajo Nation, the Hopi Tribe, the U.S. 

Office of Surface Mining and the Bureau of Indian Affairs. 

Archaeological Study 

As Peabody has advanced best practices in land restoration, it also has advanced 

a much deeper understanding of the Anasazi people. Over a period of three decades, 

the company conducted what became known as the largest continuous archaeological investigation in North America. 

The project, known as the Black Mesa Archaeology Project, was led by Southern 

Illinois University’s Center for Archaeological Investigations. It began in 1967 and 

involved researchers from a dozen universities. 

The entire lease area of 65,000 acres was surveyed by 700 scholars and scientists, 

and researchers identified approximately 2,500 sites of interest. These included 

small pottery sites with surface features and larger sites with multiple family dwellVerDate Nov 24 2008 12:42 Feb 01, 2012 Jkt 000000 PO 00000 Frm 00097 Fmt 6633 Sfmt 6621 L:\DOCS\66648.TXT Hresour1 PsN: KATHY
92 

ings. Ultimately 220 sites were excavated, and 1 million artifacts were identified 

and remain the property of the Navajo and Hopi. These activities carefully followed 

federal and tribal regulatory requirements to protect historic sites. The archaeological project is recognized as an industry model by the U.S. Department of the 

Interior and is the subject of more than 300 publications. 

According to Dr. George J. Gumerman, Southern Illinois University’s past Director for the Center for Archaeological Investigations who led the investigation: 

‘‘The unusual aspect of the Black Mesa Archaeological Project is that Peabody 

went beyond the letter of the law in exploring and collecting the artifacts of the extinct people of Black Mesa. Peabody helped us discover how people really lived, and 

it changed the way we look at the people of pre-historic Southwest. . .This project 

gave us a social history of how the average people lived back then and helped to 

understand their day-to-day lives.’’ 

Elsewhere in the lease area, the company also has developed a number of programs to improve the quality of life for some 200 Navajo families residing within 

the lease area. Basic services such as potable water, road grading and maintenance 

and free coal for home heating are offered. The company also assists residents during inclement weather with snow plowing and delivery of water and hay for livestock. 

Peabody has further assisted the Navajo Tribal Utility Authority with an electricity project that brought electricity access to residents on and adjacent to the east 

side of the lease area by providing a right of way, route clearing and road building. 

Additional water delivery programs for lease area residents are being discussed with 

the Navajo Nation. 

Peabody’s collection of socially responsible practices on Black Mesa, including 

training and employment practices, land restoration, archaeological and cultural 

preservation and range management, is recognized globally. Peabody was the only 

mining company in the world recognized for sustainable practices at the Energy 

Globe Awards in Brussels among nearly 100 nations. 

Environmental Compliance 

Demonstrating corporate responsibility means achieving good stewardship. Strong 

environmental compliance is well documented at the Kayenta Mine through multiple examinations involving a broad group of federal and tribal regulatory authorities. The most recent example can be found in the U.S. Department of the Interior’s 

stakeholder process that resulted in development of an Environmental Impact Statement (EIS) on renewal of the Kayenta Mine operations permit that was published 

in December 2008. 

The EIS represented an extensive four-year public stakeholder process with the 

U.S. Department of the Interior, the U.S. Environmental Protection Agency, the 

Navajo and Hopi, numerous other consulting agencies, and the public. 

Many other multi-year, multi-media examinations have reviewed Peabody’s environmental compliance on Black Mesa in conjunction with rigorous monthly, quarterly and annual environmental monitoring and reporting. A multi-media monitoring system on site continues to provide air, water, vegetation, soils, overburden 

and cultural resources data for constant benchmarking. 

Water Use 

A minimal amount of water is used at the Kayenta Mine for dust suppression and 

potable uses. Based on its lease agreements, Peabody pays the tribes more than $1.1 

million annually to use approximately 1,200 acre-feet of water each year. This represents a 70 percent reduction in annual water use following the suspension of activities at the Black Mesa Mine at the end of 2005. 

Water is sourced from the Navajo Aquifer, an enormous resource spanning 7,500 

square miles in the Four Corners region that is naturally replenished through the 

hydrologic cycle. The Navajo Aquifer holds 400 million acre-feet of water, which is 

some 17 times the size of Lake Powell at full pool. Studies demonstrate that mining 

will use less than one-tenth of one percent of the volume of water stored in the aquifer over the life of the operations and that the aquifer will recharge rapidly. 

Since the suspension of mining activities at Black Mesa Mine, the Navajo Aquifer 

has recovered nearly 200 feet beneath the Kayenta Mine permit area in the confined 

area of the aquifer demonstrating rapid recovery of the resource. Studies show that 

any drawdown by Peabody has not adversely impacted community water sources, 

including those at the nearby Forest Lake Chapter. 

93 

9Macy, J.P., Groundwater, Surface-Water, and Water-Chemistry Data, Black Mesa Area, 

Northeastern Arizona—2008–2009: U.S. Geological Survey Open File Report 2010–1038, 43 p., 

published in 2010. U.S. Office of Surface Mining ‘‘Report on Its Review and Analysis of Peabody 

Western Coal Company’s 2009 Annual Hydrological Data Report and The U.S. Geological Survey’s Ground Water, Surface Water, and Water-Chemistry Data, Black Mesa Area, Northeastern 

Arizona—2008–2009,’’ published August, 2010. 10Photovoltaic Solar Resources, Billy Roberts, October 2008; National Renewable Energy Laboratory, U.S. Department of Energy. 11 Based on calculations using Solaripedia data; http://www.solaripedia.com/13/303/3431/ 

sarnia_solar_farm_photovoltaics.html. 12 U.S. Energy Information Administration; Electricity in the United States, 2009. 13 U.S. Energy Information Administration, March 2011. 14 Ventyx, Monthly Plant Fuel Purchase Price. 

The latest reports from the U.S. Office of Surface Mining and the U.S. Geological 

Survey also continue to conclude that the Navajo Aquifer is healthy and robust and 

water quality is excellent.9

There are no significant trends indicating adverse impacts to domestic water supplies, spring flow or stream flow. These findings cap 50 years of well documented 

government, tribal and private study of the Navajo Aquifer to assess its relationship 

to shallow wells and surface water flows and to ensure tribal water resources are 

protected. 

Importantly, the lease agreements specify that if at any time the U.S. Department 

of the Interior determines the aquifer has been damaged due to water use from mining, Peabody must fund development of a replacement water source for the tribes. 

Energy Alternatives for the Navajo Station 

The Navajo Generating Station delivers 2,250 megawatts of power to customers 

in Arizona, California and Nevada. A plant of this size can create electricity for 

more than 2 million families. 

The Navajo Station owners are considering a variety of options to update the 

plant to achieve Best Available Retrofit Technology (BART) requirements under the 

Clean Air Act. Among them: integrating solar power into the coal plant, using stand 

alone renewable generation or distributed generation including solar or wind that 

could help service the electric load for the existing water pumps within the Central 

Arizona Project. 

Peabody believes that all forms of energy are needed to meet long-term energy 

needs of the Southwest, and that society does not face a choice between coal, wind 

or solar power. We must, however, recognize both the advantages and limitations 

of each. 

Renewables do not offer baseload power of the scale needed to replace the Navajo 

Station. Because renewable power cannot be stored, it requires baseload backup 

when the sun is clouded over or winds are calm. 

Even if solar were used to replace a portion of Navajo Station’s capacity, the 

state’s best solar profile is near Phoenix, which is hundreds of miles south of the 

reservation.10

The sheer scale of the Navajo Station far exceeds the capacity of proven renewable sources, making it unrealistic to suggest that renewables could take the place 

of the plant’s baseload power. Replacing the three 750-megawatt coal units for the 

plant with solar panels, for instance, would require some 1.3 million solar panels 

covering nearly 25,000 acres or nearly 40 square miles, which is more than 83 times 

the footprint of the Navajo Station.11 Each solar panel is estimated at approximately 8 square feet in size. 

Prematurely ending power plant operations also would result in enormous loss of 

jobs, revenues, and economic benefits to the Navajo and Hopi and the Southwest 

region. The vast majority of jobs created for solar energy would be for laborers who 

would be needed to wash solar panels versus the skilled positions needed for the 

mine and power plant operations. 

Solar power fuels less than one percent of U.S. electricity 12 whereas coal fuels 

nearly half of U.S. electricity and is by far, the affordable energy alternative at 

scale, fueling the lowest cost electricity in the United States: The 10 states that use 

the highest percentage of coal have electricity rates that average less than half of 

the cost of other states that rely on more expensive fuels like natural gas.13 And 

this past decade, the cost of natural gas averaged nearly four times the delivered 

cost of coal.14

Only 39 percent of Arizona’s electricity is fueled by coal, and the state pays on 

average 9.7 cents per kilowatt hour. This compares to other western states like Wyoming, where 89 percent of the state’s electricity is fueled by coal and consumers 

94 

15 U.S. Energy Information Administration, March 2011. 16 U.S. Energy Information Administration, Annual Energy Review, June 2009; Peabody 

analysis of U.S. Environmental Protection Agency Air Emissions Trend Data for sulfur dioxide, 

nitrogen oxides and particulates. 

enjoy costs that are 36 percent lower.15 In California, where just 1 percent of electricity is fueled by coal, energy costs are even more punishing, with consumers facing the second-highest electricity prices in the nation. Their costs average 13.8 cents 

per kilowatt hour. 

Balanced Regulation that Puts People and Technology First 

Peabody believes that technology is the solution for continuous environmental improvement to address both regulated emissions and carbon dioxide (CO2). Technology has enabled U.S. coal-fueled generation to achieve a strong and improving 

environmental track record driven by tens of billions of dollars invested in clean coal 

technologies by the nation’s utilities. 

U.S. coal use and gross domestic product have tripled since 1970, as emissions 

of sulfur dioxide, nitrogen oxides and particulates per megawatt hour have been reduced more than 80 percent.16 The next generation of supercritical, gasification and 

carbon capture and storage technologies will continue to build on this progress. 

The BART process for Navajo Station means that the technology must be available, affordable and deployable. Salt River Project has just completed a $45 million 

retrofit of low-nitrogen oxide (NOX) burners on each of its 750 megawatt units that 

reduce NOX emissions by at least 40 percent. For the station owners to invest another $1.1 billion in retrofit technologies, they must be given the time needed to extend their plant site lease and renew rights of way to ensure long-term operating 

certainty. 

The U.S. Environmental Protection Agency (EPA) must move carefully and within 

a reasonable timeframe to balance the human and societal costs with meaningful 

environmental improvement mandated by additional emission controls. Premature 

shutdown of Navajo Station would in turn, cause closure of the Kayenta Mine, 

which has no access to any other coal customer. It is unclear what replacement 

source could power the Central Arizona Project. 

Moving regulations forward too fast, and without proper consideration of people 

and economies is the reason why a bipartisan group of 22 attorneys general across 

the country have sent a letter to EPA Administrator Lisa Jackson, calling on EPA 

to defer rapid implementation of carbon regulations to avoid the so-called ‘regulatory train wreck.’ The attorneys general want to ensure Congress has the opportunity to evaluate the need and timing for these rules. EPA also has come under 

pressure from 23 state legislative chambers in 15 states adopting formal resolutions 

to block a regulatory disaster. 

We cannot allow a similar train wreck in the Southwest. Forcing the Navajo Station to close prematurely will shut out hundreds of reservation jobs and billions of 

dollars in revenues in coming decades. These assets and benefits will never be replaced at this scale because there are no viable energy alternatives on reservation 

lands that come close to the value of coal. Coal is the sustainable resource providing 

vital power and water that enables Southwest families to live in the arid desert. 

At a time when unemployment in reservation communities is hovering at 50 percent, and Arizona’s fragile economy is still recovering from the economic recession, 

it is crucial to maintain the value chain of assets associated with the Navajo Generating Station. 

Thank you for the opportunity to testify on one of the most crucial energy issues 

faced in the Southwest. 

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[A letter submitted for the record by Leisa B. Brug, Director, 

Energy Policy Advisor to Governor Janice K. Brewer, State of 

Arizona, follows:] 


66648.005.eps
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66648.006.eps 66648.007.eps
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[A letter submitted for the record by Anna Frazier, Coordinator, 

Dine’ Citizens Against Ruining Our Environment, follows:] 

Statement submitted for the record by Anna Frazier, Coordinator, Dine’ 

Citizens Against Ruining our Environment (Dine’ CARE), Winslow, Arizona 

WATER IS LIFE 

According to our earliest teachings, water is the blood of the land, carrying life 

and nourishment to the rest of natural creation. Flowing in beauty, there are female 

and male waters. Where they touch is a sacred place for reproduction and generation of new life. Their merger symbolizes fertility and the renewal of life in Fourth 

World. 

Deriving our original authority from the rainbow of sovereignty, the Navajo Nation possesses aboriginal water rights that antedate and predate the United States 

of America and the State of Arizona. Based on the federal recognition of our inherent tribal sovereign status, we as a tribal nation maintain a special and unique 

treaty and trust responsibility relationship with the federal government that is 

based and rooted in the mutually ratified treaties of 1849 and 1868. We further 

have prior and paramount First Nation water rights through the applicable 1908 

Winters Doctrine and the 1963 U.S. Supreme Court case of Arizona v. California. 

Yet our tribal reserved water rights and historic uses are threatened to be severely limited and unjustifiably quantified by the Northeastern Arizona Indian 

Water Rights Settlement Agreement of 2010 and its horrific Navajo Generating Station water provisions which if fully approved, will continue and extend into perpetuity the illegal Navajo water rights waivers of 1968 and 1969 for the sole use 

and benefit of NGS and the racist company town of Page. Although the 50-year 

Navajo water rights waivers appertaining to the industrial and municipal operations of the Navajo Generating Station and the City of Page are due to expire in 

2019 and 2020 (if the aforementioned agreement and its NGS water provisions are 

not approved by Congress and other entities), these waivers are still unconscionable 

and represent fundamental violations of basic human rights. Such gross human 

rights violations are strictly prohibited under the United Nations Declaration on the 

Rights of Indigenous Peoples as ratified by the U.N. General Assembly in 2007. 

Health impacts resulting from the pollution and toxic waste (coal combustion waste) 

generated by the Navajo Generating Station needs to be included in this discussion. 

The health impacts are disproportionately borne by the Navajo and Hopi communities with little or no access to health care. On April 13, 2005, U.S. Senate Committee on Indian Affairs oversight hearing on Indian health care issues, Anslem 

Roanhorse, Jr., the Navajo Nation Division of Health and Human Service Director 

testified the Navajo Indian Health Service is 55% funded and there is a 17—20% 

vacancy rate for doctors and nurses on Navajo. Furthermore, the legislation reauthorizing Indian Health care Improvement Act, last reauthorized in 1999, was finally reauthorized in 2010. 

The Navajo Nation has tried to protect its communities from the toxic stew that 

makes up coal combustion waste. Unfortunately, the responsible federal agencies 

are ignoring a human health crisis in the making with no oversight. Incidentally, 

none of the electric power generated by the massive power plant on our land go to 

our people. The Navajo Nation is an energy export zone where all the power goes 

off our reservation and we are left with Superfund sites. This is an environmental 

justice issue where Native Americans are burden with disproportionate pollutants. 

In due consideration of the foregoing, we request a full congressional investigation 

of and hearings into why the Navajo Nation has not been able to fully assert its 

inherent national sovereign rights to at least 10 million acre-feet of water per year 

to the Colorado River main stem and tributaries that are located between and within the Four Sacred Mountains of Dine Bi Keyah. We further request immediate congressional authorization of an expedited official order directing that fair and just 

compensation and subsequent damages be assessed and paid in full for the loss and 

wastage of valuable tribal water resources due to the aggregate effect of the abovementioned waivers. 

Lastly, we respectfully request that the subject waivers be reevaluated and investigated forthwith by Congress’ General Accounting Office. 

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[A statement submitted for the record by Niger Innis, CoChairman, Affordable Power Alliance, follows:] 

Statement submitted for the record by Niger Innis, Co-Chairman, 

Affordable Power Alliance, Las Vegas, Nevada 

Chairman McClintock, Chairman Young, Members of the Subcommittees, my 

name is Niger Innis. I am the Co-Chairman of the Affordable Power Alliance, a coalition of civil rights, social justice, and senior advocacy organizations formed to address the problem of rising energy costs. Among the member organizations of the 

Affordable Power Alliance are the 60 Plus Association, the National Black Chamber 

of Commerce, the National Hispanic Christian Leadership Conference, the Congress 

of Racial Equality, and the High Impact Leadership Coalition. These varied organizations within the Alliance represent millions of Americans from the African American, Latino, senior citizen, and small business communities. 

Chairman McClintock and Chairman Young, I thank you for holding this timely 

hearing and request that this testimony be entered into the record of this joint hearing. The Affordable Power Alliance has a vital interest in the outcome of the decision from the U.S. Environmental Protection Agency (EPA) on emissions controls 

upgrades that may be mandated for the Navajo Generating Station (NGS), not only 

because thousands of our supporters live and work in the affected areas of Arizona 

and New Mexico, but also because we recognize that higher energy prices anywhere 

in America hurt people everywhere in America. 

We know that EPA is currently evaluating controls on NOx emissions from NGS 

under EPA’s Regional Haze rules to protect visibility in nearby areas like Grand 

Canyon National Park. We have examined EPA’s ‘‘Advanced Notice of Proposed 

Rulemaking Regarding Best Available Retrofit Technology for Nitrogen Oxide Emissions at the Navajo Generating Station Docket Number EPA–R09–0AR–2009–0598.’’ 

From studying that document, we know that if the NGS must make retrofits outlined in that proposed rule, it would raise NGS energy prices to its customers, which 

will mean higher costs of water for the Central Arizona Project, which will mean 

higher costs for the wheat farmer in Maricopa County, which will mean higher costs 

for the pasta company near Phoenix, which will mean higher food bills from Los Angeles to Bangor, and from Fairbanks to Miami. We know that this hypothetical example of one microcosm will be multiplied many times by reality if the EPA imposes 

the most stringent of its proposed rules. Unaffordable energy affects everything everywhere. When it comes to energy, there is no local impact. Energy is the basic 

resource. What hurts one hurts all. 

The Affordable Power Alliance also realizes that there is a more ominous potential 

outcome of EPA action: the cost of meeting a draconian retrofit rule could mean 

shutting down the Navajo Generating Station, which would mean destroying the incomes of hundreds of Navajo and Hopi people it now employs, and the loss of revenue due to the consequent termination of the current long-term coal mining contract with Peabody Western Coal Company’s Kayenta operation to mine coal owned 

by the Navajo Nation and the Hopi Tribal Council to fuel the NGS. 

A more widespread catastrophic outcome could be the shutdown of the waterflow 

to the Central Arizona Project, or at least a desperate scramble to find affordable 

power to keep the pumps going. The CAP was authorized by President Lyndon B. 

Johnson, who signed a bill in 1968 approving its construction, providing for the Bureau of Reclamation of the Department of the Interior to fund and construct CAP 

and an operating entity to later repay some of the construction cost. Various water 

authorities, known as the participants, now manage the CAP. It’s now the largest 

irrigation system in America, watering a million acres of agricultural lands, and 

providing municipal water to Phoenix and Tucson. 

Here’s the catch: the power that drives the pumps within CAP to move water from 

the Colorado River into the interior of the state comes from the Navajo Generating 

Station (NGS), a 2,250 megawatt coal-fired steam plant operated by the Salt River 

Project (SRP) on Reservation land under a lease from the Navajo Nation. 

We note that an article in the September 2010 Family Farm Alliance Water Review stated, ‘‘The NGS participants have installed state of the art controls for sulfur 

dioxide emissions and are achieving high levels of particulate emissions control’’— 

that’s voluntarily, and at a cost of $46 million. But then the article observes that 

‘‘NGS is the only plant to have had such controls installed exclusively for visibility 

purposes.’’ Such responsible management should be rewarded, but it looks like the 

old saying ‘‘No good deed shall go unpunished,’’ is the operative principle of the federal government in dealing with the NGS. 

Although this hearing does not specifically cover it, there are two coal-fired power 

plants located on Navajo Reservation land, the Navajo Generating Station and the 

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Four Corners Power Plant (‘‘FCPP’’). It is worth listening to the Navajo view of 

EPA’s proposal. In a March, 2010 report to the EPA, the Navajo Nation explained 

their situation. 

‘‘No entity has a greater interest in NGS and FCPP than the Navajo Nation. Accordingly, the Nation believes it is important to lay out in broad 

strokes the interests of the Nation implicated by this rulemaking. NGS and 

FCPP are located on Navajo lands pursuant to lease agreements with the 

Navajo Nation. The Plants provide hundreds of skilled jobs on the Navajo 

Reservation, where unemployment approaches fifty percent. The Nation’s 

most valuable saleable natural resource is its coal reserves, and the Plants 

were located to take advantage of and provide a market for Navajo coal. 

The income these two Plants provide to the Nation, both directly and indirectly, contributes substantially to the Nation’s economic viability and thus, 

ultimately, to its sustainability as an independent sovereign. 

—Response to Dr. Anita Lee (Air-3), U.S. Environmental Protection Agency Region 

IX, dated March 1, 2010 by Dr. Joe Shirley, Jr., President of the Navajo Nation, and 

Ben Shelly, Vice President. 

Likewise, the Hopi Tribal Council responded to the EPA with deep concern for its 

survival: 

The fundamental problem with attempting to achieve greater visibility improvements in the subject Class I areas through an SCR [very expensive 

equipment] requirement at NGS is the simple fact that visibility impairment is primarily caused, not by NGS and other power plants, but instead 

originates from other haze and particulate sources such as automobile emissions that occur in Los Angeles and migrate to class I Areas, and more localized sources such as dust and smoke from forest fires and controlled 

burns. According to the Salt River Project [one of the participants] analysis, 

power plants contribute only a small fraction of the haze problem in the 

Grand Canyon and other Class I Areas. If this finding is accurate, the huge 

costs of EPA’s NGS SCR proposal are not justified by the small incremental 

benefits achieved. This is especially true given the potential catastrophic 

economic outcome for the Hopi and Navajo Tribes and in light of the Trust 

responsibility of the United States to protect the Hopi Tribe and its assets 

from outright destruction or other harm. Even larger visibility improvements would not justify the economic devastation that would be imposed on 

the Hopi people and their homeland by an EPA SCR requirement at NGS. 

—Response to Jarod Blumenfeld, Administrator, USEPA, Region IX, dated March 1, 

2010, by LeRoy N. Shingoitewa, Chairman of the Hopi Tribe, and Herman G. 

Honanie, Vice-Chairman. 

We, the people of the Affordable Power Alliance, would like to see the United 

States Congress take swift and decisive action to put an end to the abuse of political 

power that looms behind the EPA’s anti-energy NGS rulemaking proposal. We ask 

that Congress restore our peoples’ ability to create an economy based on access to 

the natural resources, particularly energy resources, which are an integral part of 

our custom, culture, tradition, and right to the pursuit of happiness. 

Our commitment in response, as we clearly see in the Navajo Nation and the Hopi 

Tribal Council, is to be good and responsible stewards who will make sure that our 

energy activities are sustainable environmentally, economically, culturally and in 

concert with the tenet of protecting our heritage for future generations with abundant, affordable energy. 

Thank you again, Chairman McClintock and Chairman Young, for holding this 

hearing and giving the Affordable Power Alliance the privilege and honor of presenting written testimony on behalf of our members, our fellow minorities in the 

Navajo Nation and the Hopi Tribe, and all our fellow citizens who need and deserve 

an energy policy that is affordable by all Americans. 

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