An unprecedented energy transition is transforming the U.S. Our electric grid is rapidly shifting away from fossil fuels toward sustainable power sources. The reason is simple: renewable energy is now one of the cheapest sources of electricity in most markets worldwide. In contrast, coal is now among the most expensive sources of electricity.
Consequently, coal-fired powerplants and coal mines are in precipitous decline. According to Reuters News, more coal plants will have shut down during the Trump administration—approximately 46,600 Megawatts—than during Obama’s second term—around 43,100 MW.
In contrast, renewable energy is booming. According to Bloomberg New Energy Finance, $2.7 trillion has been invested in renewables globally over the past 10 years, doubling its share of global energy generation from 5.9% in 2009 to 13.4% in 2019. More solar power generation capacity was added in these 10 years than any other source of power.
Historic transitions like this can be exciting as well as disruptive. They bring winners and losers. The question is whether we watch passively from the sidelines or try to direct this once-in-a-lifetime transition in ways that are efficient for energy producers, affordable for energy consumers, fair for workers, and sustainable in our use of earth’s resources. But as we head into this clean energy future, we must honor and assist those communities dependent on legacy industries like coal that are now in decline.
The gigantic coal-fired Navajo Generating Station in northern Arizona is a case in point. Constructed in the 1970s, NGS was the largest coal-fired powerplant in the Western U.S. It sits on Navajo land and the coal mine that feeds it straddles both the Navajo and Hopi reservations. NGS provided low-cost power to the Southwest and hundreds of good-paying jobs, with Native Americans making up to 90% of the workers at the powerplant and mine.
While the powerplant provided distant city residents with a half century of cheap electricity, residents of the Navajo and Hopi nations suffered from aquifer depletion, air pollution, and the harmful health effects of coal mining. They got good-paying jobs, and their tribal governments benefited from lease and royalty payments, but it was a Devil’s Bargain.
In 2017 the owners of NGS decided to close the plant as it was no longer economically viable. It ceased operations in November 2019. As a result, the Kayenta mine also shut down.
Amid the disbelief and resistance to NGS’s closure, foresighted leaders began planning and preparing for the inevitable transition. In particular, Salt River Project, which managed the powerplant, provided unprecedented support for transition, serving as a model for other utilities to emulate.
Rather than close the plant immediately, SRP and the other owners of NGS agreed to keep the plant open two additional years to provide time for transition, absorbing tens of millions of dollars in higher electricity costs.
SRP promised job placement to the more than 400 workers at NGS. More than 300 employees took advantage of this offer. Most of these jobs required re-training and relocating away from the reservation, so it was not easy. Nonetheless, it was an extraordinary gesture of care for a valuable workforce.
SRP partnered with the Greater Phoenix Chamber of Commerce to provide an IT apprenticeship program for NGS workers that qualified its graduates for jobs and careers beyond SRP.
In decommissioning the powerplant, SRP is obligated to remove structures and reclaim the land to a safe and usable condition. Some of the powerplant facilities could be re-purposed, so at the request of the Navajo government SRP donated several office and warehouse buildings and transferred to the Navajo government the funds it would have spent to remove those buildings.
To help jumpstart renewable energy development on the Navajo Nation, SRP entered into two long-term contracts to purchase 30-Megawatts each of solar energy from the Navajo Tribal Utility Authority (Kayenta I and II). These projects were so successful that SRP is now seeking to purchase an additional 400 MW of solar energy with preference given to projects sited on the Navajo Nation.
If it wishes, the Navajo Nation can remain a major provider of energy to the region—clean energy—with more opportunity to control and benefit from that energy development than NGS offered. But getting solar energy to market requires access to transmission lines. The US Bureau of Reclamation donated its 500 Megawatts of NGS transmission capacity to the Navajo Nation, while SRP and the other owners will pay the operation and maintenance charges for 10 years.
SRP is unique among large electric utilities nationwide in providing this level of transition assistance. It is time for other utility companies to recognize and embrace their social responsibilities to the communities they serve during times of rapid economic transformation.
If not offered voluntarily, the state’s legislature and Corporation Commission should mandate it—as New Mexico and Colorado recently did.
A just and sustainable energy transition requires cooperation. Federal, state, and local governments must partner with the utility companies that manage our electric grid and the business community that helps drive investment and innovation. A coordinated effort motivated by a genuine desire to care for workers, strengthen community resilience, and preserve a healthy environment will ensure a better future for generations to come.
Paul Hirt is Senior Sustainability Scholar, Global Institute of Sustainability & Innovation at Arizona State University. He served as a member of the Board of Directors for Salt River Project from 2016-2020.
Clara Pratte is CEO of Strongbow Strategies, a consulting firm that primarily serves federal agencies and tribal customers. She previously served in various capacities with Navajo Nation, US Small Business Administration’s Office of Native American Affairs and US Department of Commerce International Trade Administration. Clara is the Founder and Partner at Navajo Power.