Utility regulators in Arizona rejected proposals from an Arizona utility to provide assistance to coal-impacted communities, including in Navajo communities in northwest New Mexico.

The rejection of the assistance from Arizona Public Service Company, the majority owner and operator of the Four Corners Power Plant, comes as the Arizona Corporation Commission approved significant rate hikes that will result in the average customer spending an additional $10.48 per month for electricity.

According to groups like the Sierra Club, this rate increase is substantially caused by the continued use of coal-fired generation, including the Four Corners Power Plant.

“Unfortunately, what we’re witnessing is just how out-of-touch the ACC is with utility ratepayers, the public, and our communities,” Sandy Bahr, director of the Sierra Club’s Grand Canyon Chapter, said in a press release. “To enable APS to raise its rates to prolong the livelihood of obsolete expensive and dirty power plants, impose charges on solar customers, and deny Coal Community Transition funding for coal-impacted communities goes directly against the best interests of ratepayers, our air, our water, and our communities, and ignores affordable transition planning that is urgently needed.”

APS had proposed a substantial package to help communities, especially Native American communities, in the areas where the utility owns coal-fired generation.

That included $100 million in direct financial support to the Navajo Nation as well as $2.5 million per year in transmission revenue sharing with Navajo Nation and extending electrical service to Navajo households within 4,000 feet of APS distribution lines free of charge. The utility also proposed $250,000 annually for five years to help the Navajo Nation with economic development in the areas around the Four Corners Power Plant. Additionally, the proposed package included $20 million to help expand electrification to houses and buildings on the Navajo Nation and committed the utility to buying 600 megawatts of electricity from renewable energy projects that will be built on the Navajo Nation.

The utility and Navajo Nation have entered into an agreement in terms of coal community transition funding, which was also included in the 2019 rate case. The ACC approved part of that funding in the 2019 case and the remainder was included in the application for a rate increase that the ACC ruled on this week.

But, in a 4-1 vote, the Arizona Corporation Commission rejected the proposed aid on Thursday.

Commissioner Anna Tovar proposed increasing the assistance to coal-impacted communities even more than APS had suggested, but the commission also voted against her amendment on a 4-1 vote.

Tovar, in a filed proposed amendment, wrote that the Navajo Nation as well as the Hopi tribe were underpaid for coal resources while shareholders and ratepayers have “greatly benefitted from relatively low-cost power provided by coal-fired power plants.”

Coal-impacted communities, she argued, have faced the “heavy burden of air pollution, water contamination, and public health impacts caused by the plants, as well as depletion of precious groundwater supplies.”

“While communities benefited from revenues associated with mining royalties, they also became economically dependent on coal to the exclusion of growth of more diverse industries. Such economic dependence is common across coal communities nationwide and has led to (Coal Community Transition) funding in many diverse jurisdictions,” she wrote. 

This decision contrasts similar cases that New Mexico utility regulators have faced. In New Mexico, the Energy Transition Act guaranteed assistance to coal-impacted communities, though the state experienced challenges in distributing the money.

Proponents of assistance to coal-impacted communities say that ratepayers have benefited from reliable, affordable electricity while the communities where the power plants are located bear the environmental consequences and, in the case of the Navajo Nation, may not even have access to electricity.

“It’s extremely disappointing that we finally have a utility stepping up to support communities where it is closing down coal plants, and now politicians are getting in the way and forcing these communities to endure even more economic hardship,” Nicole Horseherder, executive director the Navajo grassroots community group Tó Nizhóní Ání, said in a press release. “We have given the Commission everything they need to determine what transition aid looks like. But in the end, they have shown they firmly believe they have no obligation to communities that bore the cost of producing Arizona’s power.”

The Four Corners Power Plant is the sole remaining coal-fired generating station in New Mexico and operates only part of the year. While it is located in New Mexico, the majority of its power is shipped out of state. 

The plant is currently scheduled to close in 2031, however some of the owners are considering earlier retirement options.

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