1 M EMORANDUM

T O : Docket for Navajo Generating Station: EPA

‐ R09

‐ OAR

‐ 2013

‐ 0009

F ROM : Anita Lee, EPA Region 9

D ATE : September 24, 2013

R E : Conference call with Vernon Masayesva, Black Mesa Trust

Participants:

Black Mesa Trust (by teleconference)

 Vernon Masayesva

 Joe Browder (advisor to BMT)

 Al Quyawma (advisor to BMT)

EPA Region 9

 Jared Blumenfeld, Regional Administrator

 Anita Lee, Air Planning Office

 Ann Lyons, Office of Regional Counsel

 Zoe Heller, Office of the Regional Administrator

Location:

 EPA Region 9 Office in San Francisco, CA

Summary:

 Mr. Masayesva presented a document he developed on behalf of Black Mesa Trust called “Crossroad: A

framework to transition Navajo Generating Station towards a cleaner energy generating station by

2025”.

Presentation Materials Received (attached):

 Document titled “Crossroads”

# CROSSROAD

A FRAMEWORK TO TRANSITION NAVAJO

GENERATING STATION TOWARDS A CLEANER

ENERGY GENERATING STATION BY 2025

PREPARED IN BEHALF OF BLACK MESA TRUST

WITH CONTRIBUTIONS FROM INDIVIDUALS AND

DINE GRASSROOTS ORGANIZATIONS



# b y Vernon Masayesva

Founder and Director, Black Mesa Trust

Former Chairman, The Hopi Tribe

July 30, 2013NAVAJO GENERATING STATION

Position Paper

BLACK MESA TRUST:

For more than a decade, Black Mesa Trust (BMT) has worked to empower Hopi

and Diné peoples to safeguard, preserve and honor the land and waters on Black

Mesa, upon which the security of generations depend, i.e., to create a permanent

safe homeland.

BMT helped play a key role in ending coal slurry operations in 2005, and the

attempt to bring ground water from Coconino Aquifer under Navajo land to

continue the coal slurry operation.

NAVAJO GENERATING STATION (NGS):

NGS is a three

‐ unit, 2,250 MW

‐ rated, coal

‐ fired thermal electric generating

station located on the Navajo Reservation in northern Arizona, near Page, on the

edge of Lake Powell. NGS is one of the nation’s dirtiest power operating station.

It spews 16 million tons of green house gases and particulates throughout the

Colorado Plateau, causing environmental and health damages and clouding

visibility at Grand Canyon National Park and other neighboring parks.

NGS is operated and managed by Salt River Project Agricultural Improvement and

Power District (SRP), a non

‐ profit public utility company under the State of

Arizona. It is the second largest owner, next to U.S. Department of the Interior

(DOI).

Designed in conjunction with the original federal and states plans to populate

post

‐ war southwestern areas of the U.S., it provides reliable low cost electricity to

meet the growing demand of residents, businesses and industries in

Central/Southern Arizona, Southern California, Nevada, and to Central Arizona

Project (CAP). Central Arizona Water Conservation District (CAWCD), another

entity under the state of Arizona, relies on U.S. Bureau of Reclamation’s (BOR)

24.3% ownership of NGS to provide power to operate CAP. CAP is owned solelyby the federal government. BOR uses CAP to guarantee water delivery to Arizona

Indian Tribes who agreed to be a party to the 2004 Arizona Water Settlement Act

in return for waiving their aboriginal Winters Doctrine rights to waters. Navajo

Nation is a party to the settlement.

For 40 years NGS owners and Peabody Western Coal Company (Peabody) have

exploited coal and water on Hopi and Navajo lands to insure profit

‐ rich

corporations low cost base

‐ load power.

Water supply from the Navajo Aquifer was approved by DOI Secretary Stewart

Udall at a rate of $1.67 per acre foot (AFY) for ground water and $7.00 AFY for

Lake Powell water: a 50

‐ year promise from Navajo not to pursue its claim to

50,000 AFY of water from Upper Colorado River; and a grossly unfair site

infrastructure leases. NGS site lease with Navajo, and Peabody’s leases with both

Navajo and Hopi Tribe (Hopi) were quickly approved by Udall, who abandoned his

trust responsibility in order to expedite the leases and construction of NGS before

National Environmental Protection Act (NEPA) became law in 1970.

Records from a hearing conducted by Senator Wayne Aspinall (Colorado) put a

spotlight on Udall’s motive to open up tribal lands to utility and mining

companies, using Congressional appropriation.

Udall testified that the intent of the legislation was to “move (Hopi and Navajo)

down the road toward the right kind of ultimate independence...”

Aspinall asked: “By ultimate independence do you mean doing away with

reservations as such?” To which, Udall responded: “I think this is undoubtedly

the end result.”

The financial and resource benefits created at the expense of Hopi and Navajo

through questionable federal manipulations is today very much in question

regarding the future of NGS and Peabody. Both are facing multiple complex

problems, among them are:

1. The Environmental Protection Agency (EPA) requiring NGS owners to

reduce nitrogen oxide required under Clean Air Act. According to SRP,EPA’s preferred decision to retrofit the three units with Selective Catalytic

Reduction (SCR) as the best technology could cost $1 billion dollars or

more. SRP officials are threatening to shut down NGS if EPA selects SCR;

2. EPA rule

‐ making is underway to reduce mercury emissions, thereafter

Carbon Dioxide;

3. Los Angeles Department of Power and Water is bound by California law to

divest itself from NGS. Nevada Energy (NV) is planning to follow suit;

4. Potential conflict of interest issues continue to be a major problem for BOR.

This is certain to be the subject of close scrutiny. BOR has trust duty to

protect tribal natural resources, yet it enjoys a majority share of NGS, 100%

ownership of CAP. As owners of NGS, BOR is buyer of Black Mesa coal. It is

a member of NGS Engineering and Operation Committee and enjoys

voting powers. BOR is not in a position to carry out its mission and trust

responsibility to protect tribal natural resources;

5. Peabody coal leases with Hopi and Navajo ends in 2025. New leases are

needed to extend mining up to 2044. Without the extension Peabody

cannot guarantee coal to NGS for 25 years;

Unlike Navajo, the Hopi government operates under a Hopi Constitution.

Under the law control over natural resources rests with 12 independent

villages, not the Hopi council and Chairman. Only 5 villages are represented

on Council. This situation makes mining extension problematic.

Currently mining is on Kayenta Mine West located exclusively on Navajo

Reservation, and Kayenta Mine South on Former Joint

‐ Use area set up by

Congress to settle the land dispute. FJUA was eventually divided into Hopi

Partitioned Land (HPL) and Navajo Partitioned Land NPL. However all

minerals including water was not divided. As a result everything under HPL

and NPL belongs to Hopi and Navajo jointly and equally. This means both

tribes have to approve the lease extension.

6. A growing Hopi and Diné opposition to the world’s largest strip

‐ mining

operation;A Citizens Complaint and possible lawsuit against Secretary of Interior for

failing to order U.S. Office of Surface Mining Reclamation and Enforcement

(OSMRE) to strictly enforce NEPA and U.S. Surface Mining Control

Reclamation Act (SMCRA). To this day, OSM has declined to require

Peabody to post groundwater reclamation plan and bond;

7. BMT and other non

‐ governmental organizations (NGOs) filed a challenge to

OSMRE’S decision to grant Peabody permission to continue mining on

Kayenta Mine for another 5 years beginning 2010. The Petition is under

consideration by federal administrative law judge. The 5

‐ year permit ends

2015;

8. Before the Secretary approves the lease extension the Environmental

Impact Study has to be completed. Given the multiple problems facing NGS

and Peabody the EIS process will be highly politicized and publicized.

Whatever the decision it is likely to be challenged in federal court;

The stakes could not be higher for the millions of families, businesses and regional

economies which depend upon energy from NGS and water from CAP.

Stakeholders are unsure about what course to pursue except to ask Congress to

intervene to save NGS, regardless of what Hopi and Navajo people say. If this

happens it will undermine tribal sovereignty for all tribes in the United States.

Royalties and other payments received from NGS and Peabody operations are

important revenue sources for tribal operations and services. Mine and NGS

workers (nearly 1,000, mostly Navajo) depend upon the wages they earn to

support their families. Towns and county governments are very concerned about

the loss of tax and business revenues derived from NGS, Peabody and their

employees.

What is certain is the eleventh hour for decision

‐ making. The eleventh hour for

critical actions has arrived. We are standing at a crossroad.TRANSITION TO CLEAN AND CLEANER ENERGY OR NOT:

The first path would continue coal

‐ fired generation by extending leases and

service contracts to 2044. It would increase tribal revenues significantly and save

jobs. This is the path proposed by NGS and Peabody and is under consideration

by Hopi and Navajo legislators, but is vehemently opposed by the grassroots

peoples, and non

‐ governmental organizations (NGOs), as it would continue strip

‐

mining.

The second path, one favored by some NGOs, calls for the closure of NGS and all

related mine operations and the development of a 8,445 MW solar farm on 13.2

square miles of tribal land.

The proposal envisions a 6

‐ year construction schedule, equity stakes for Hopi and

Navajo, and the creation of 16,900 construction jobs, 5,380 manufacturing jobs,

and 1,600 operational jobs expanding to 8,000 jobs by 2020.

Others support development of a solar generating station as a stand

‐ alone project

to be constructed on “brown fields” or reclaimed land on Peabody lease area.

Peabody currently has right to 67,000 acres of tribal lands. Most of the area is

mined out.

BMT OPTION

‐ A MITIGATIVE APPROACH:

BMT is convinced that an integrated phased plan to continue NGS as a base

‐ load

or near power station using a mixture of solar, hydro power and natural or

methane gas is the best approach, and is in the stakeholder’s best interest. A

win

‐ win resolution.

To mitigate or minimize damages to the environment, cultural resources, health,

and reduce global warming, Black Mesa Trust supports a path that calls for:

1. Immediate decommissioning of one coal

‐ fired generator unit by 2019.

This will reduce greenhouse gas emission, coal mining and water use from

Lake Powell by one

‐ third (1/3);2. Replacing the decommissioned unit with a combined

‐ cycle solar and

natural gas unit sufficient to guarantee CAP operations at affordable

costs;

3. Gas could be imported from the Southern Ute Indian Tribe. The Tribe

already has a natural gas production company. It is piped to a gas

powered generating station in Kingman, Arizona. Use of Natural gas will

serve as a bridge to the day when NGS could be powered solely by

renewable energy. The gas pipeline passes through Hopi and Navajo, not

far from NGS;

4. Once the combined cycle unit becomes operational decommission the

second unit and replace with a combined

‐ cycled gas

‐ solar energy or

hydro

‐ power by 2024;

5. Congressional action to dedicate 500 Megawatts of hydro

‐ power from

federal water storage reservoirs on Upper Colorado River Basin states,

thereby carrying out the intent of Congress when $80 million was

appropriated to build NGS to power CAP;

ECONOMIC AND JOB OPPORTUNTIES:

1. Develop 1000 MW commercial solar farms on Hopi and Navajo lands

between Tuba City and Hopi Villages. The project will create 2,500

construction jobs;



### 2. Construct a new 500 KV transmission line, alongside the existing Arizona

Public Service 500 KV El Dorado Transmission Line that connects Four

Corners Generating Station and Moencopi Substation near Cameron,

Arizona. The new line will be dedicated to bring solar energy from the

proposed solar fields to markets in Arizona, California, and Nevada. This will

create more jobs; and

3. Convert the 100

‐ acre Hopi Winslow Industrial facility into a solar equipment

manufacturing and /or storage facility. The building has been vacant for over

20 years and is owned by the Hopi Tribe. This will create significant

economic boost for the tiny community of Winslow, and create jobs;4. BMT propose that a Colorado Plateau Clean Energy Initiative (CPCEI) be set

up to serve as a research/development arm of Hopi and Navajo;

We envision it as a collaborative effort with state universities whose mission

will be to investigate various ways energy can be developed using tribal

natural resources.

It will also serve as a valuable training program for youth to prepare them to

take over management of our resources.

TRANSITION AND BUSINESS PLAN:

A transition and comprehensive business plan are key elements in accomplishing

our objective. Both require a team of technical, legal, finance, and marketing

experts supported with multiple year funding. BMT is convinced that if both Hopi

and Navajo legislators grant conditional support to move forward we can get seed

money from Navajo and Coconino County Board of Supervisors, and Southern

California Edison (SCE). SCE has set aside money from the sale of sulfur dioxide

credit for Hopi and Navajo to develop renewable energy projects on tribal lands.

With conditional support from Hopi and Navajo legislators, it is possible to secure

long

‐ range funding from DOI, DOE, EPA, state of Arizona, owners of NGS, Central

Arizona Water Conservation District (CAWCD), and non

‐ profit foundations.

A MODEL OF TRANSPARENCY AND PARTNERSHIP:

If the plan proposed herein is successful, it will be a model of partnership

between energy resource tribes and energy producers and distributors.

It can be used as a model to continue operation of Four Corners Generating

Station far into the future without using coal.

It will be a showcase of how Indian Tribes are participating in reducing global

warming and conducting energy development in a responsible way. In their way.