Dive Brief:

• The 2.25 GW Navajo Generating Station (NGS) is expected to close this week after a two-year search for a buyer proved unsuccessful.

• NGS' last unit is expected to shut down "sometime in the next several days" depending on how quickly the remaining on-site coal is burned through, majority utility owner Salt River Project (SRP) spokesperson Scott Harelson told Utility Dive in an email. Poor economics led the owners to decide in 2017 to close the plant at the end of the unit's lease with the Navajo Nation, which ends this year.

• Currently, the plant has one 750 MW unit fully shut down, one operating fully and one operating at about a third of capacity, totaling around 1 GW. The plant's future remained largely uncertain from the owners' initial decision to close the plant to the rejection in April 2019 of a last-ditch effort to save the plant by forcing an Arizona water agency to buy power from the facility.

Dive Insight:

Mounting closures have led some communities, including the Navajo Nation, to fight hard for alternate avenues to keep ailing plants open. But faltering economics mean most investors are not willing to put capital toward coal.

Natural gas and renewables prices began to undercut the coal plant, and SRP now plans to replace the majority of its generation from NGS with natural gas from its Mesquite and Gila River units in Arizona, along with "some new solar." The Department of Interior, Los Angeles Department of Water and Power, Arizona Public Service, NV Energy and Tucson Electric Power all own a portion of the plant as well.

Over 90% of the 500 NGS employees are part of the Navajo Nation and the tribe first began seeking respite for the plant in April 2017, two months after its announced closure, applying for federal subsidies that would have matched the unit's electricity prices with the prices of the natural gas units undercutting it.

A little over a week later, Peabody Energy, the plant's coal supplier, began offering the plant coal at a lower fixed price to stabilize its finances and prepare it for a potential sale. Peabody had just emerged from bankruptcy after initially filing in 2016 and hired Lazard to try and find a buyer for NGS power.

Lazard coordinated an effort with Middle River Power to potentially buy the plant, but the private equity firm dropped its purchase bid in September of last year. 

One of the plant's last avenues for survival was through legally forcing one of its main power purchasers, the Central Arizona Project, to continue buying electricity from the plant. A federal judge dismissed the suit in April.

The plant's demolition will begin in 2020 and last through 2021, according to SRP. Coal ash pond and landfill closures and clean ups will last through 2022 and post-closure monitoring will last another 30 years beyond that.

Of the 500 workers employed at the plant in 2017, 433 have been offered a new position with other SRP facilities and almost 300 have accepted, according to Harelson.