Proposed Tax Subsidy For Desert Rock Power Plant Dies In The Legislature

Kate Trainor
3 min read
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A bill that would have granted an $85 million tax break for the construction of a coal-fired power plant on a Navajo reservation in northern New Mexico died in the Legislature late last month. The Navajo Nation and Sithe Global Power, a New York-based energy company, lobbied for the subsidy [Re: News Feature, “Absolute Power,” March 8-14], but were unable to convince legislators that the plant would be a worthy investment of New Mexico tax dollars.

Lobbyists were unable to push Senate Bill 431, the Navajo Nation Electric Plant Tax Credit Bill, out of committee before the close of the Legislative Session. This was the second time a measure for an $85 million tax subsidy for the Desert Rock power plant failed to pass.

Opponents of the plant, including conservationists and grassroots Navajo groups, applauded lawmakers for stalling the bill but cautioned that Sithe may still proceed with construction of the plant, even without the subsidy.

“Now that legislators have taken the wise step of prohibiting Sithe and its parent company, private New York investment firm The Blackstone Group, from exploiting taxpayers to build their power plant, it’s time to focus on keeping the polluting plant from being built,” says Denise Fort, a University of New Mexico environmental law professor. 

The coal-fired plant, says Fort, would also be incongruous to the state’s movement toward sustainable sources of energy, like solar and wind. “At a time when New Mexico is taking a leadership role on clean energy and decreasing global warming pollution, it doesn’t make any sense to build a facility that essentially would erase that progress,” says Fort.  

If realized, Desert Rock would produce an estimated 10.5 million metric tons of global warming pollution every year, a 34 percent increase over the state’s entire 2003 emissions. Coal-fired power plants are the primary source of global warming pollution.

“Lawmakers sent a powerful message,” says Carol Oldham of the Sierra Club. “They saw this measure for what it was: a thinly veiled scheme to line the pockets of wealthy and influential out-of-state interests at the expense of New Mexico’s clean air and water and its residents’ health.” 

Although the Navajo Nation’s government, led by President Joe Shirley, supports construction of the plant on the Burnham, N.M., reservation, numerous Navajo legislators, including Rep. Ray Begaye (D-Shiprock), openly oppose Desert Rock, citing environmental and ethical concerns.

In a letter to the
Navajo Times , Rep. Begaye wrote, “What troubles me about the proposed Desert Rock power plant is the fact that there is no environmental safety net at a time when New Mexico and neighboring states are imposing strict emission requirements on coal-fired power generation facilities.” Begaye is further troubled that proponents of the plant used bullying tactics in an attempt to sway legislators. “Their participation in the legislative process has included threats, intimidation and misinformation,” Begaye says.

“We applaud the New Mexico Legislature, and especially the legislators from the Navajo Nation, who stood up against subsidizing a new polluting coal plant,” says Sandy Buffett, executive director of Conservation Voters New Mexico. “We will continue to work closely with our Navajo colleagues to pursue clean energy economic development, such as concentrating solar and wind, for the Four Corners.” 
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