THE NAVAJO NATION 

VIA EMAIL 

September 18, 2014 

Janet McCabe 

Environmental Protection Agency 

Acting Assistant Administrator 

Air and Radiation Docket 

Mailcode: 2822T 

1200 Pennsylvania Avenue NW 

Washington, DC 20460 

BEN SHELLY PRJSIDEN r 

REX LEE JIM VlCF PRE<;IDFNT 

Re: Navajo Nation's Position on a Clean Power Plan Supplemental Rule for Tribes 

Dear Ms. McCabe: 

Thank you again for meeting with the Navajo Nation in the September 15th Government-to 

Government consultation to discuss USEPA's Supplemental Rule for the Tribes under the Clean 

Power Plan. 1 The purpose of this letter is to summarize the information that was presented by the 

Navajo Nation at that meeting and to provide you with our position on the supplemental rule for 

the Navajo Nation and aspects of the Proposed Rule, including renewable energy projects. 

Specifically, the Navajo Nation requests the following : 

1. The Navajo Nation requests that USEPA develop a supplemental rule for the Navajo 

Nation as a whole, not just a rule for the two power plants located on the Navajo Nation. 

In doing so, we recommend that the Navajo Nation be allowed, as are the States, to 

devek>p its own plan to meet any C02 emission reduction requirements under the 

supplemental rule. Specifically, such supplemental rule should address the following: 

a. The Navajo Nation should be authorized to initiate a plan that provides for a 

mass-based emission standard, utilizing the highest C02 emissions at NGS and 

FCPP since 1997, which would result in a cap being set at no less than 3 7,941 ,342 

C02 tons; 

b. None of the additional building block conditions under Clean Energy Proposed 

Rule are applicable for the Navajo Nation; 

1 The four power plants located in Indian country that are subject to a supplemental rule are Navajo Generating 

Station (NGS) and Four Corners Power Plant (FCPP), both located on the Navajo Nation, the Bonanza Generating 

Station on Ute lands, and the South Point Energy Center located on Mohave lands. 
c. The Navajo Nation should be authorized to consider the useful life of the EGUs 

and their impact on the Navajo Nation economy in developing its plan under any 

supplemental rule; 

d. The Navajo Nation would be allowed to control and disposal of any carbon 

credits associated with its Plan as it sees fit; and 

e. The unique situation of the Navajo Nation should be recognized and considered in 

the development of a supplemental rule. 

2. USEP A should clarify as an addendum to the Proposed Rule, and as part of the 

supplemental rule, that for renewable energy resources located within Indian country, 

which may benefit a state or a utility therein, that benefitting state can and should 

recognize such renewable energy resources for credit toward its EGUs compliance 

requirements under the Proposed Rule. 

USEPA's commitment to the Navajo Nation 

The federal government, including USEP A, has recognized the unique legal relationship that 

exists between the federal government and the Native American tribes.

2 USEPA acknowledged 

this unique relationship and did the correct thing when it excluded Electricity Generating Units 

(EGUs) located in Indian country from its Clean Power Plan for Existing Power Plants (Proposed 

Rule) and provided instead that a supplemental rule would be prepared, if necessary or 

appropriate. 

3 USEP A also stated that they would consult with the affected tribes (including the 

Navajo Nation) prior to setting any C02 emissions goals for Indian country.4 

On July 15, 2015, the Navajo Nation requested Government-to-Government consultation with 

USEP A regarding the Proposed Rule and anticipated supplemental rulemaking for tribes. 

However, the Navajo Nation became concerned that USEPA was already far along in the process 

of drafting the supplemental rule, which it was going to release fairly soon. This promoted a 

joint letter from Stephen B. Etsitty, Executive Director of the Navajo Nation Environmental 

Protection Agency, and Harrison Tsosie, the Navajo Nation Attorney General, on August 15, 

2 As recognized in E.O. 13 175, " the United States has a unique legal relationship with Indian tribal governments as 

set forth in the Constitution of the United States, treaties, statutes, Executive Orders, and court decisions." E.O. 

13175, 65 Fed. Reg. at 67249. Accordingly, every federal agency " shall have an accountable process to ensure 

meaningful and timely input by tribal officials in the development of regulatory policies that have tribal 

implications." !d. at 67250. As USEPA also recognizes, US EPA shares " the federal government's trust 

responsibility, which derives from the historical relationship between the federal government and Indian tribes ... " 

USEPA Policy on Consultation and Coordination with Indian Tribes (May 4, 2011). USEPA's own Indian Policy 

states that USEPA will "give special consideration to Tribal interests in making Agency policy, and [to] insure the 

close involvement of Tribal Governments in making decisions and managing environmental programs affecting 

reservation I ands," 1984 Indian Policy at I; and "will assure that tribal concerns and interests are considered 

whenever EPA's actions and/or decisions may affect reservation environments," id. at 3. 3 79 Fed. Reg. at 34844; see CAA § 301 (a), (d)(4); 40 C.F.R. § 49. 11. 4 79 Fed. Reg. at 39893 ("The EPA does plan to establish C02 emission goals for both Indian Country and territories 

in the future. The EPA plans to conduct additional outreach before setting these goals."); EPA Fact Sheet, "National 

Framework for states," http://www2 .epa.gov/sites/production/files/20 14-05/documents/20 140602fs-settinggoals.pdf. 
2014 to Ms. Regina McCarthy, USEPA Administrator ("August 15, 2014letter"). They 

requested that USEPA not release a supplemental rule until the Navajo Nation had a chance to 

participate in the Government-to-Government consultation and until USEPA meaningfully 

reflected upon input received from the Navajo Nation from that consultation. In a letter dated 

September 11 , 2014, you reiterated that a supplemental rule will not be published until after 

USEPA's consultation with the Navajo Nation, but that USEPA also has tight deadlines. 

While the Navajo Nation is sensitive to the fact that USEPA has deadlines, I would also like to 

stress the importance of the supplemental rule to the Navajo Nation and clarification regarding 

renewable energy resources to the Proposed Rule. For example, the immediate impact of the 

ambiguity created by the Proposed Rule has been the delay in completion initiating construction 

on several renewable energy projects on the Navajo Nation. The Navajo Nation is at a severe 

economic disadvantage compared to the states and an appropriate Navajo Nation Clean Power 

Plan not only would take that disparity into account but also could create a great economic 

opportunity for the Navajo Nation. 

Again, we respectfully request that USEP A consider the importance of this decision to the 

Navajo people and that USEPA will take the time to reflect upon our comments and concerns in 

a meaningful way prior to the release of a supplemental rule, which is expected in mid-October. 

The Navajo Nation appreciates USEPA's assurances at the September 151

h consultation that our 

discussions on the supplemental rule will continue, that Monday's consultation will not have 

been our only chance to provide input to USEP A on a supplemental rule, and that, to use your 

words from the consultation, "the draft [of the rule] is not locked in." We trust that USEPA will 

truly abide by these statements. 

The Navajo Nation's Unique Situation 

Any rule developed for the Navajo Nation should consider key characteristics that distinguish the 

Navajo Nation from the states. These characteristics include the following: 

• The Navajo reservation was set aside as a cultural homeland for the Navajo people. 

Under the supervision of our trustee, the United States government, the Navajo Nation's 

economy developed into a coal-based economy. It was the federal government who 

established this coal-based economy, which the Navajo Nation has grown to rely upon. 

Previous environmental regulatory decisions by USEP A have already impacted our 

economy in a negative way, and will reduce the output of the power plants by about a 

third of what they were. More restrictions by USEP A directed toward the power plants 

and associated mines have the potential to weaken the Navajo Nation economy even 

further. There are no other industries on the Navajo Nation that can compensate for this 

economic loss. 

• The Navajo people as a whole live in extreme poverty, which includes a staggering 

unemployment rate of 52%. The per capita income of the Navajo Nation is around 

$10,000, while the per capita income of the poorest state (Mississippi) was $34,478 in 

2013.5 This extreme poverty leads to higher rates of alcoholism, domestic violence, other 

crimes and suicides. 

5 U.S. Bureau of Economic Analysis. 
• 

• 

• 

• 

• 

A lack of jobs severely strains the Navajo Nation economy and forces the Navajo people 

to leave their homeland in search of work, sometimes leaving behind their spouse and 

children and weakening family bonds. 

32% of the Navajo people do not have electricity, which is worse than Nepal and 

Indonesia, and only slightly better than Bangladesh. 6 The per capita use of electricity on 

the Navajo Nation is 10% of that used by neighboring states and about 15% ofthat ofthe 

most efficient state (California). 7 Electricity consumption on the Navajo Nation needs to 

increase in the future to promote economic development. 

Almost all of the electricity generated on the Navajo Nation is exported to the states; it is 

not used by the Navajo people. 

The Navajo Nation has an extremely low carbon footprint compared to our neighboring 

states. Notably, the Navajo people receive almost all their power from carbon-free 

sources (primarily hydroelectric). 

Unlike the states, any reductions at the existing EGUs on the Navajo Nation cannot be 

offset or shifted to other facilities. 

Key Components of a Clean Power Plan for the Navajo Nation 

The Navajo Nation advocates for a Clean Power Plan that considers the unique situation of the 

Navajo Nation and also incorporates the key components described below. 8 

1. The Navajo Nation recommends a mass-based C02 emission standard based on 

historical C02 emissions. 

The Navajo Nation supports a plan that provides for a mass-based emission limit because it 

would better allow for an option of trading carbon allowances than a rate-based approach. The 

Navajo Nation is interested in preserving an option for trading, for the reasons given below. The 

Navajo Nation also believes that the emission rate on which the mass-based standard is based 

should be based on the highest C02 emissions at N GS and FCPP since 1997. 1997 was the year 

just prior to implementation of various pollution-control technologies and other processes 

(including unit shutdowns) that have already resulted in significant carbon reductions at the two 

power plants. This approach would result in a cap being set at 3 7, 941 ,34 2 C02 tons. 

The cap that the Navajo Nation is proposing is based on NGS's 2002 emissions of20,458,265 

C02 tons and FCPP's 1999 emissions of 17,483,077 C02 tons. An acceptable alternative 

emissions rate, although not ideal, would result in a cap of37,077,435 tons, which are the 2000 

total C02 emissions from the two power plants. Moreover, any carbon mass emissions cap 

6 Navajo Tribal Utility Authority, International data from World Bank and International Energy Agency. 7 NTUA and California Energy Commission. 8 As mentioned in the August 15, 2014 letter from the Navajo Nation to US EPA, the Navajo Nation has embarked 

on a historic an.rt unprecedented undertaking concerning the Proposed Rule and the Supplemental Rule. The Navajo 

Nation, including its Environmental Protection Agency and Division of Natural Resources, along with Navaj o tribal 

enterprises (NTUA, Navajo Transitional Energy Corporation and Navajo Nation Oil and Gas Company) have come 

together to plan a course of action that will be in the best interest of the Navajo Nation to determine its economic 

and cultural future. 
developed from historical emissions should not be adjusted downward to account for retirement 

of units at the plants since this was not performed by USEP A when developing state emissions 

rates under the Proposed Rule. It is unreasonable to use the year 2012 as the basis of a mass 

emissions rate because 2012 was a low-emitting year for both plants as a result of unusually low 

generation. 

The Navajo Nation believes that using historical C02 emission rates for the baseline is a fair and 

reasonable recommendation. The Navajo Nation has already suffered adverse economic impacts 

due to unit retirements at the power plants. Navajo workers lost high-wage jobs, both at the 

plants themselves and at the associated coal mines, and equivalent job opportunities are not 

available elsewhere on the Navajo Nation. 

The power plant unit retirements also decreased revenue to the Navajo Nation government in the 

form of taxes and royalties. This decrease has strained the government's budget and lowers the 

ability to provide essential services to our people, many of whom live in extreme poverty. Using 

a mass-based emissions standard based on historical emissions will help assure longer-term 

operation of the two power plants, enabling more time for development of and transition to other 

industries on the Navajo Nation. The resulting excess carbon credits also could be used in a 

carbon credit trading program that may help generate funds and provide other opportunities for 

the Navajo Nation, as discussed further in item 2 below. 

In the alternative, if USEP A were to require a rate-based approach either as the preferred 

approach or as the first step in developing a mass-based standard, the power plants should not 

have to improve their heat rates as set forth under Building Block 1 of the Proposed Rule. 

USEP A's Proposed Rule for the states relies on the assumption that power plants did not 

improve their heat rates prior to 2012. This is an incorrect assumption for NGS and FCPP. As 

demonstrated by USEPA's data, both power plants have reduced their C02 emissions, C02 

emission rates and heat rates significantly since 1997 and prior to 2012. Therefore, it would be 

unreasonable and infeasible to require any further reductions of heat rates. 

2. The Navajo Nation requests carbon credits and ownership and control of such 

credits.9 

We strongly request that USEPA grant the Navajo Nation carbon credits and that the Navajo 

Nation have ownership and control of those credits. This will allow the Navajo Nation to 

participate in a current or future multi-jurisdiction trading program(s). 10 The Navajo Nation's 

intention would be to use such a program as a means to finance clean energy development on the 

Navajo Nation and provide transitional employment opportunities for the Navajo people. 

Granting carbon credits to the Navajo Nation also may prove to be a significant mechanism for 

mitigating the effects of extreme poverty on the reservation. We also ask that you clarify that 

any carbon credits resulting under the Clean Power Plan are separate and distinct from those 

9 "Carbon credits" and "allowances" are used interchangeably. 10 The Navajo Nation understands that US EPA cannot give us the authority to participate in a multi-jurisdictional 

plan. However, we request that US EPA not structure the final rule for the states and/or the supplemental rule for the 

tribes in a way that poses obstacles to participating in a multi-jurisdictional approach . 
under any other federal programs, such as the Department of Interior's Carbon Reduction Credit 

program. 

We understand that USEPA has the option of determining that no plan is necessary for the 

Navajo Nation.

11 Such a determination would acknowledge the efforts made by NGS and FCPP 

in response to USEP A's other environmental regulations that resulted in lower carbon emissions 

(e.g. the BART rules).

12 However, this determination would not acknowledge the sacrifices 

made by the Navajo Nation. Navajo employees lost their jobs at NGS, FCPP and the associated 

mines due to these environmental regulations and these high-paying jobs cannot be replaced 

elsewhere on the Navajo Nation. The Navajo Nation government has also seen reduced tax and 

royalty payments as a result of the changes mandated at NGS and FCPP by USEP A. This option 

also would not recognize the fact that the Navajo Nation historically has had extremely low 

electricity demand (currently only 10% of its neighboring states) and is not a significant 

contributor to carbon pollution. Therefore, we are requesting that USEP A acknowledge both the 

sacrifices made by the Navajo Nation and the Navajo Nation's historically negligible 

contribution to the current carbon problem by allowing us to receive carbon credits and to retain 

ownership and control of such credits. Determining that no plan is necessary for the Navajo 

Nation would be USEPA taking the easy way out. We request that USEPA not take this course 

of action and work with us to determine another course of action that results in significant carbon 

credits for the Navajo Nation. 13 

3. The Other Building Blocks Outlined in the Proposed Carbon Rule for the States are 

Not Applicable to the Navajo Nation. 

a. Switching from coal-fired to Natural Gas Combined Cycle (NGCC) power plants 

should not be a component of a supplemental rule for the Navajo Nation. 

There are no NGCC plants located on the Navajo Nation, nor are there plans to build any. The 

Navajo Nation is a coal-based economy and does not rely on natural gas in any significant 

capacity. Therefore, the requirements of the Proposed Rule 's Building Block 2 are inappropriate 

for the Navajo Nation and should not be a component of a Navajo Nation rule. 

b. A Navajo Nation rule should not require increased use of no or low carbon 

electric-generating sources. 

Although there are two power plants located on the Navajo Nation, the Navajo people receive 

virtually all their electricity from carbon-free sources (mostly hydroelectric power). Almost all 

of the electricity generated at the two power plants leaves the Navajo Nation and is consumed in 

neighboring states. Additionally, the Navajo people's use of electricity is negligible compared to 

the electricity generation at the power plants. The Navajo people have a much lower carbon 

footprint than the states, including the most energy-efficient states. Therefore, the Proposed 

11 See e.g. 79 Fed. Reg. at 34852 (" If it determ ines that such a plan is necessary or approp riate, the EPA has the 

responsibility to establish a CAA section Ill (d) plan for areas of Indian country ... ") 12 The Navajo Nation certainly acknowledges and appreciates the efforts made by NGS and FCPP. 13 US EPA has provided extra allowances in the past to states that historically were not significant contributors to an 

environmental problem, specifically to "clean states" in the acid rain program . 
Rule's Building Block 3 is not appropriate for the Navajo Nation and should not be a component 

of a Navajo Nation rule. 

c. A demand-side approach to energy efficiency is inappropriate for the Navajo 

Nation. 

The Navajo Nation should not be subjected to any rule that requires a reduction in energy 

consumption. As noted above, per capita electricity use in the Navajo Nation is about 10% of 

that of neighboring states and about 15% of the most energy efficient state, and 32% of the 

Navajo people do not even have electricity. The Navajo Nation's energy consumption needs to 

increase, not decrease. 

It would be a social injustice to require the Navajo people to reduce their energy consumption 

when they use negligible amounts of electricity and when a significant percentage of the people 

do not even have electricity. The issue facing the Navajo Nation is not energy efficiency; it is 

inadequate access to electricity. As was brought up by USEPA during the consultation, Building 

Block 4 of the Proposed Rule applies to future electricity consumption in order to make sure that 

energy consumption grows in an efficient manner. The Navajo Nation maintains that any 

demand-site approach to energy efficiency, whether based on current or future consumption, is 

inappropriate for the Navajo Nation. It is completely unreasonable to put such restrictions on a 

group of people such as the Navajo, who live in poverty and one third of whom do not even have 

electricity. Therefore, Building Block 4 of the Proposed Rule is not appropriate for the Navajo 

Nation and should not be a component of a Navajo Nation rule. Any rule applied to the Navajo 

Nation should allow for the increase of energy consumption on the Navajo Nation. Any 

emission rate should be determined accordingly to provide for increased electricity consumption 

rather than decreased consumption. 

4. The proposed rule should consider the useful life of the power plants located on the 

Navajo Nation. 

A Navajo Nation rule should examine and incorporate the useful life ofNGS and FCPP. 

Because of their huge significance to the Navajo Nation, these plants should be allowed to 

continue operating into the future. The Navajo Nation is a coal-based economy in large part due 

to the actions of our trustee, the United States government. The Navajo people depend on the 

power plants and associated mines to earn a living and support their families. NGS, FCPP and 

the associated mines (Navajo Mine and Kayenta Mine) provide approximately 1,584 Navajos 

with employment. USEP A has already rendered decisions impacting these power plants and 

mines which have adversely affected Navajo families. We respectfully ask that you consider the 

harmful effects to these Navajo workers and their families that may occur from additional 

1 . 14 

regu atory reqmrements. 

14 San Juan Generating Station (SJGS) is located just outside the Navajo Nation in Farmington, NM. This power 

plant also employs many Navajos. Any impact to SJGS under New Mexico's Clean Power Plan has the potential to 

negatively affect Navajo workers and further strain the Navajo economy. The Navajo Nation has an interest in 

assuring that jobs at all three plants are protected. 
5. Renewable energy projects on the Navajo Nation that provide electricity outside the 

Navajo Nation should be counted toward the relevant state's emission rate. 

States, and utilities therein, should not be hindered from receiving credit for engaging in 

renewable energy projects on the Navajo Nation in order to meet carbon emission rates, reduce 

reliance on carbon sources, and satisfy renewable energy goals. USEP A should clarify as an 

addendum to the Proposed Rule, and as part of the supplemental rule, that for renewable energy 

resources located within Indian country, which may benefit a state or a utility therein, that 

benefitting state can and should recognize such renewable energy resources for credit toward its 

EGUs compliance requirements under the Proposed Rule. Language to this effect will benefit 

both the states and the Navajo Nation. Furthermore, this clarification should state that the 

Proposed Rule in no way modifies the federal government's intent to promote the development 

of renewable energy projects on Indian Land as described in EPAct 2005. 

The Proposed Rule has already created an obstacle to the development of renewable energy 

resources within the Navajo Nation. At least one Navajo Nation enterprise is directly engaged in 

the development of renewable energy resources for sale of energy and Renewable Energy 

Credits to utilities not located within or regulated by the Navajo Nation. The enterprise has been 

informed by such a utility that it is re-evaluating the purchase due to the ambiguity of whether 

the renewable energy resource with the Navajo Nation could be used as credit against the 

utility 's EGUs not located within the boundaries of the Navajo Nation. This ambiguity of the 

Proposed Rule is delaying job creation and much needed investment into the development of 

renewable energy projects on the Navajo Nation. Without clarification of the Proposed Rule, 

states will not have the incentive to develop these types of projects on the Navajo Nation. As a 

result, the Navajo Nation's economy will be severely hindered and we will lose an opportunity to 

develop a green economy. 

Other Considerations 

The Navajo Nation is aware ofthe threats posed by climate change and supports USEPA's 

decision to take action. It is also possible that environmental groups will seek to minimize any 

C02 allowances that may be proposed for the Navajo Nation, and most likely will seek further 

reductions in emissions at the power plants. However, the situation at Navajo is one where 

social justice and environmental goals should go hand-in-hand. The Navajo Nation has already 

made, and continues to make, substantial sacrifices as a result of efforts to reduce the 

environmental impact of the two power plants even without an additional C02 emissions 

requirement. It is possible to create a Navajo Nation rule that reflects our unique situation, helps 

the Navajo people out of poverty and also assists the United States in the fight against climate 

change. USEPAjust needs to be willing to do the hard work to create such a rule. The Navajo 

Nation will do whatever we can to assist USEPA with the complexities that are involved in 

developing such a rule. With our extremely low carbon footprint, the Navajo Nation is not a 

large contributor to the climate change problem, but we are ready and willing to be a part of the 

solution. 
Thank you again for meeting with the Navajo Nation and for allowing us to provide our input on 

a supplemental rule for the Navajo Nation. The Navajo Nation looks forward to an ongoing 

discussion with USEPA on this matter. Please direct any follow-up communications concerning 

this matter to Stephen B. Etsitty, Executive Director, Navajo Nation Environmental Protection 

Agency, at 928-871-7692, stephenbetsitty@navajo-nsn.gov. 

Sincerely, 

Cc: Jared Blumenfeld, Regional Administrator, USEPA Region 9 

Stephen B. Etsitty, Executive Director, Navajo Nation EPA