“The Navajo Nation government doesn’t stop and think about what they’re doing. All they’re looking at is dollar signs. All they want is dollars to go back into the revenue. They’re spending, and they want to replace their spending,” said White, who was in Santa Fe last week lobbying against the taxcredit bill. Desert Rock is a joint venture between the Navajo tribe’s Diné Power Authority and Sithe Global Power, a worldwide power-development company owned primarily by Blackstone Capital Partners in New York City.
Tribal officials and Sithe representatives say the tax credits are needed to keep the Desert Rock electricity competitively priced. By law, Sithe could be taxed by both the state and the Navajo Nation.
In late January, the Navajo Tax Commission approved reducing tribal taxes by up to two-thirds for Sithe Global during construction of the $2.2 billion power plant and its expected 40-year operation. In return, the plant is expected to pump $50 million a year into tribal coffers from taxes, royalties on coal and a water lease, according to Tom Johns, Sithe Global’s vice president for development.
The revenue equals almost a third of the tribe’s current budget, according to tribal officials.
If the Senate approves the House version of the tax credit, the state foregoes about $3.1 million a year in potential tax revenue over the next 40 years. But the state stands to gain more then $10 million a year, Johns said.
“It’s going to benefit the Navajo communities,” said Norman John, a Navajo tribal councilman who sits on the Diné Power Authority board. “The (power plant) will be economically healthy for the Navajo Nation.”
Sen. Leonard Tsosie, DCrownpoint , and a Navajo tribal member, calls himself the bill’s “harshest critic.”
“There’s no sense in having a fancy power plant in Indian country around homes that have no power,” Tsosie said. “We already have that on our land, homes near power plants that don’t have any power. I’m here to stop that.”
Both the Burnham and Sanostee chapter houses, communities near the proposed plant site, passed resolutions last year opposing the Desert Rock Power facility. Other nearby chapter houses approved it.
Tsosie said he attended chapter meetings with Sithe officials last summer and thought afterward the communities were getting “ripped off.”
Johns said the site has two big advantages for energy production: Coal for the plant can be mined near the site at the former Navajo Mine, and a permanent electricity-transmission line is nearby.
Desert Rock is touted as a state-of-the-art facility, using one-fourth of the water used by similar generating facilities, Johns said. Desert Rock would use 4,500 acre-feet of water a year drawn from a deep underground aquifer that wouldn’t affect nearby community wells, he said. The facility also is designed to reduce sulfur dioxide and mercury emissions by 50 to 90 percent, Johns said.
Opponents say they’re worried Desert Rock would impact already scarce water resources at a time when the Navajo Nation has declared severe drought conditions. In addition, no matter how low the emissions, they say Desert Rock would add to the pollution produced by the San Juan Generating Plant and Four Corners Power Plant for decades.