Navajo Resources Reject Sempra Offer To Create 500 Megawatt Wind Farm
By Kathy Helms
WINDOW ROCK – Like unwanted suitors, Sempra Generation and International Piping Products Inc. keep coming back to the Navajo Nation with a proposal for a wind farm on Gray Mountain, and the Resources Committee keeps spurning their advances while continuing to look for a sweetheart deal.
During a meeting Thursday, Western Navajo Agency Council Delegates Bobby Robbins, Raymond Maxx and Jack Colorado presented Resources with 10 resolutions – largely supporting documents pertaining to the project – from Cameron Chapter dating from April 2007 through March 2009, and two from the agency council from June 2007 and March 2009.
Yet despite local support and warnings on the magnitude of “the sky is falling,” Resources has found little affection for Sempra/IPP's initial purchase option. Under the terms and conditions proposed, the companies would erect up to 350 wind turbines on up to 45,000 acres at Gray Mountain in Cameron to create a 500 megawatt wind farm.
IPP received a conditional use permit from the Division of Economic Development in June 2007 but that has now expired and the companies are seeking a site lease so they can respond to requests for proposals coming out in October and November for renewable energy power-purchase agreements. The Navajo Nation is being offered the option to purchase 20 percent equity interest in the Gray Mountain project with Sempra/IPP retaining 80 percent.
Resources Chairman George Arthur and committee member Norman John II have said repeatedly that they believe the Nation can do better than 80/20, but as Maxx pointed out in June when Council voted 27-37 against approving the lease negotiations, “People are saying we can get a better deal. We keep asking, 'Where's the better deal?' There's nothing on paper.”
The proposed resolution also calls on Navajo to cease negotiations with other energy companies and to form a five-member negotiating team for the sole purpose of negotiating a lease with Sempra/IPP. The team would be comprised of one member selected by the president, one by the speaker, two from Cameron Chapter, and the attorney general or his designee.
Robbins said they want to take the resolution to the Navajo Nation Council for consideration during fall session.
Delegate Colorado, who represents Cameron Chapter, said that because they don't have an electrical service line they received a grant from Sacred Power in Albuquerque for 110 solar panels. Someone from Eastern Agency read about it and tried to get registered at Cameron Chapter so they, too, could get a solar panel. “Throughout the reservation our people are in need.”
IPP President Bruce McAlvain said the community held a workshop and chapter meeting since Council's last action. “They asked us to come back and see if we can work through the lease structure.” In his presentation to the committee, McAlvain talked about the uncertainty in the California renewables market and the impact it will have in the Southwest, such as a decline in the marketplace and projects going forward.
“In the next couple years, there is over 3 gigawatts of planned infrastructure going into place that we're directly competing with here in Arizona,” he said.
California has 70,000 to 80,000 megawatts of proposed renewable energy projects. Currently in infrastructure, they've got 19,000 megawatts, he said, adding that for the state to meet a proposed 33 percent renewable energy standard, they will only need 25,000 megawatts.
“We've run out of time. If this construction window of opportunity that we have for projects is going to stay open, we need to have something in the ground or started by 2012 or the first quarter of 2013.” After that, renewable energy will hit a plateau and stay there until 2019 or 2020, stalling projects in Arizona going to California, which pays the highest purchase rate for renewable energy, he said.
Steve Atkins, a research engineer at Northern Arizona University which put up the first meteorological tower on Gray Mountain to measure the wind, said Gray Mountain has possibly the best wind in the entire state, second only to Navajo 's Big Boquillas Ranch.
“Gray Mountain has the capacity to produce a 500 megawatt wind farm,” Atkins said. “This amount of power is going to have to go to some larger state that can accept it, and that state is essentially California.” However, Atkins warned that the only transmission line to export the electricity is the El Dorado 500 kilovolt line, and that line is becoming saturated.
“There are a lot of projects that people are trying to push through, so time is of the essence. If this project doesn't go rapidly, what will happen is the El Dorado will get filled up to its capacity and will not be able to accept any more electricity and it won't matter what you do with Gray Mountain. There will be no way to get the power out of Gray Mountain,” he said.
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