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Coal’s decline in power production hits Navajo Nation hard

Copyright © 2018 Albuquerque Journal

King Coal has ruled for decades as the Navajo Nation’s economic mainstay, but with the industry in frank decline, the Navajos are facing potentially devastating impacts on tribal well-being.

Thousands of Navajo workers and others in the Four Corners could lose their jobs in coming years as the region’s three coal-fired power plants scale back operations and consider shutting down all together. That presents a looming economic predicament for all of New Mexico’s northwestern communities, but particularly for the Navajo Nation, which relies on those plants and the three coal mines that supply them for about one-third of the tribal government’s annual revenue.

PNM scholarship recipients attend a graduation ceremony at San Juan College in May. (Courtesy of PNM)

Collaborative efforts are emerging to diversify the economy and create more employment opportunities for displaced coal workers and next-generation job seekers. That includes a workforce training program funded by Public Service Company of New Mexico to help Navajo students train for jobs in other existing and emerging industries.

That program offers recurring scholarships for recipients studying at Navajo Technical University in Crownpoint and San Juan College in Farmington. It has assisted nearly 600 Navajo students.

But given the tribe’s huge dependence on coal, a lot more assistance may be needed in coming years, said Lucinda Bennalley, vice president of the Navajos’ Nenahnezad Chapter, located near PNM’s San Juan Generating Station and the San Juan Mine that supplies it.

“We’re one of the most impacted chapters on the Navajo Nation,” Bennalley said. “The coal mine and the power plant have allowed our community to be self-sufficient for many years. If they close, it will have a devastating impact on us and the surrounding communities.”

The entrance portals for the San Juan Mine in Waterflow, which supplies PNM’s San Juan Generating Station. PNM shut two of San Juan’s four generating units in December and plans to completely close the plant in 2022. The combined plant and mine workforce already has shrunk from about 650 employees to 550. (Farmington Daily Times)

PNM shut two of San Juan’s four generating units in December to comply with federal environmental regulations, and it plans to completely close the plant in 2022. The combined plant and mine workforce already have shrunk from about 650 employees to 550, about half of whom are Navajo. About 950 indirect jobs are also connected to those facilities, putting about 1,500 total jobs at risk.

Nearly 800 people work at the nearby Four Corners Power Plant and Navajo Mine, about 80 percent of them Navajo. Utility owners shut three of that plant’s five operating units in 2013.

And in Arizona, another 700 people work at the Navajo Generating Station and Kayenta Mine, 83 percent of them Navajo. Another 1,600 indirect jobs are connected to those operations. The Salt River Project, which runs the power plant, plans to shut it down in 2019, although the Navajo Nation is negotiating with two other companies to potentially continue running it after SRP pulls out.

The power plants and coal mines together contribute about $70 million of the tribal government’s $220 million annual gross budget, said Navajo Nation Council Speaker Lorenzo Bates.

“That’s a lot of money for the Navajo Nation,” Bates said. “We’re involved in every facet of the industry today. We receive substantial royalties, and we have hundreds of people working at these operations.”

With unemployment above 45 percent, the impact on Navajo families is huge. Power plant and mining jobs offer some of the best wages on the Navajo Nation at $15 to $25 an hour.

The Navajo government is working to keep the plants and mines open as long as possible. It bought the Navajo Mine from BHP Billiton last year, and in July, it acquired a 7 percent stake in Four Corners.

Apart from negotiating to prolong Navajo Generating Station operations, the tribe is also seeking to keep San Juan open past 2022.

“Could there be an opportunity there (at San Juan) for another group to come in?” Bates asked. “Probably. It’s something being considered as we speak.”

The tribe is also working with public and private partners to diversify the regional economy. The Four Corners Economic Development organization, for example, is coordinating a collaborative effort to promote other industries, including tourism, agriculture, food processing and alternative energy businesses, and to retrain workers for those sectors.

From left, PNM scholarship recipients Andrew Wauneka and Jarvis Draper, Navajo Nation Council Speaker Lorenzo Bates, and Ron Darnell, PNM senior vice president for public affairs, attend a graduation ceremony at Navajo Technical University in May. (Courtesy of PNM)

PNM is actively supporting those efforts. It launched its workforce training program in 2013, when it first began planning to close two of San Juan’s generating units, said Ron Darnell, senior vice president for public policy. It has provided $200,000 a year for scholarships, or $1 million to date.

“We have real concern for the area, particularly the six chapters that surround the San Juan mine and plant,” Darnell said. “We feel an obligation to do what we can to mitigate the impact on employment.”

All Navajo students are eligible, but the program especially targets at-risk students, such as those who have depleted government financial aid, or who reside in the Navajo chapters that surround the San Juan and Four Corners operations, said Cathy Newby, PNM director of tribal government and customer relations.

PNM scholarship recipient Corwin Largo, who is studying industrial engineering at Navajo Technical University, stands by a computer numerical control machine at one of NTU’s labs. (Courtesy of Corwin Largo)

The program offers up to $1,500 per semester to pursue bachelor’s degrees, $1,000 for associate’s programs and $500 for trade certifications.

“It’s a recurring scholarship to see students through to graduation,” Newby said.

As of May, 260 scholarship recipients had earned certificates and degrees, among them Kelso Peterson, 26, who earned an associate’s degree in industrial process engineering from San Juan College.

“The scholarship helped out a lot with books and tuition,” Peterson said. “It pretty much paid for everything.”

Corwin Largo, 27, gets $1,500 per semester to earn an industrial engineering degree. He interned at the Army Research Lab in Maryland this summer and expects to graduate next May.

“All my federal Pell Grant funding ran out, so the scholarship helped pay my tuition, food and books,” Largo said. “It’s helped a lot.”

PNM scholarship recipient Adriane Tenequer, left, and fellow Navajo Technical University student Lisa Williams interned at The Boeing Co. this summer. (Courtesy of NTU)

The colleges have set up internships for scholarship students at public and private entities, including a first-ever internship this summer for one scholarship recipient, Adriane Tenequer, with The Boeing Co., said Navajo Tech President Elmer Guy.

“This is a unique program that specifically helps communities affected by the decline in the coal industry,” Guy said. “It’s making many opportunities available for Navajo students, but there’s still tremendous need out there.”

PNM hopes its efforts will encourage more public and private entities to assist the Navajo Nation and Four Corners communities as coal continues to decline.

“That part of the state has contributed a lot of money from extractive industries into the state economy,” Darnell said. “We owe that region something in return.”

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