Our community first wrote to Marc Lasry and other principals of Avenue Capital Group two months ago, expressing our concern with his firm’s proposed purchase of Navajo Generating Station and the huge obstacle it would raise for the Navajo Nation’s progress in transitioning toward a sustainable clean energy economy. We invited him and others to visit the Navajo Nation and meet with the families who would be most impacted should Avenue buy the generating station and keep it operating past its scheduled December 2019 closure date. We wrote to him again a month ago, renewing the invitation to sit down personally with those whom his plan would affect most deeply.
The response: complete silence. And the longer our invitations have gone unanswered, the more our worries have grown as unsettling new information about Avenue’s business model comes to light.
We have a lot of questions about the company’s intentions, which according to recent reports, confirms that Avenue has no real intention of making any long-term commitment to the Navajo Nation. In fact, Avenue’s business model appears to be built on swooping in and feeding on financially weak assets like the generating station, squeezing as much value out of them in the short term, before cutting them loose. There is no prospect for a sustainable economic future for the Navajo Nation in such a plan.
Avenue’s interest in continuing to burn coal stands to benefit only its investors – and marginally at that – and the likes of Peabody Coal, which not surprisingly is pushing this deal. It would continue the exploitation of Navajo resources for outsiders’ gain and with little to no benefit for Navajos. For decades, the wealth and benefits created by coal mining and burning have bypassed the vast majority of Navajo people, reflecting yet another chapter of exploitation that we fear Avenue Capital’s purchase of the plant will perpetuate.
Lasry may not know this, but 50 years after the generating station first fired up its boilers, there are still 18,000 homes on the Navajo Nation without electricity. Natural springs and streams that once provided water for our people have been sucked dry by operations at the power plant and coal mine. Coal is a dead end for the Navajo, and Avenue Capital’s interest in keeping the Navajo Generating Station operating threatens to derail tribal efforts to transition to a durable new clean energy economy – one that will actually bring power to thousands of Navajos currently living in the dark.
The grim economic issues facing Peabody Energy and utilities that burn coal, as many analysts have noted, are not going anywhere. Wind and solar power already are more economical than coal – even with storage – and it’s not even close. Power from Navajo Generating Station currently costs upward of $50 per megawatt-hour. One of the plant’s owners, Tucson Electric Power, recently completed a cost of energy comparison showing recent bids for solar coming in 47 percent lower than the cost of current Navajo Generating Station power. For wind, they were 43 percent lower. And Central Arizona Project is considering contracts for solar at less than half the cost of power from Navajo Generating Station.
Coal is not going to bounce back. And that means the sooner the Navajo Nation can switch to a clean energy economy, the better. That’s why it’s hard to accept why, for example, the Trump Administration is trying to keep the Navajo Generating Station open, fighting market forces for no other reason than to make good on a empty campaign promise to bring back coal, even if that means harming the future of our people. It’s also hard to grasp how someone like Lasry, who on the surface opposes everything the current president stands for, would also align himself with Trump’s misguided push to keep the plant on life support.
Lasry has supported for the most part Democratic candidates for Congress. And his disdain for Donald Trump is no secret, he even openly refuses to let his NBA team stay at Trump-branded hotels when on the road. Lasry was a major and trusted fundraiser for both Barack Obama and Hillary Clinton during their presidential campaigns. And the employees of Avenue Capital themselves have contributed more than $50,000 in the past three presidential cycles, almost exclusively to Democratic candidates.
That’s why we invited Lasry to come talk to us, to clarify his intentions for the Navajo Generating Station and to give us an explanation for the troubling inconsistency between his pursuit of the plant as a business matter and his public pronouncements. Enough with the double speak – we want straight talk. Avenue Capital’s leadership should really consider a trip to the Navajo Nation to visit with us and others that are working to create a more prosperous future for our people. We would welcome a discussion on how his company could truly help support our local economy – but only if it invests in solar and wind projects, not coal or other dead-end, polluting sources of energy.