A coal-generating station in New Mexico slated for closure in 2031 may get a seven-year extension thanks to an agreement between Arizona's largest electricity provider and a tribal-owned energy company.
Arizona Public Service and the Navajo Transitional Energy Co. this month signed an agreement that could allow the Four Corners Power Plant in northwestern New Mexico to continue operations until 2038. The permit for the plant expires in 2041. It will take three years to shut down.
APS has been phasing out coal generation. But the utility is expecting increased energy demand amid extreme summer temperatures, economic growth and an influx of large energy users.
"Arizona's energy needs are growing faster than at any time in our history, making access to reliable generation resources more important than ever," wrote spokesperson Casey Taggatz in an email to The Arizona Republic.
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Taggatz wrote that the agreement is just one part of the process to extend operations.
The utility will hold a public meeting Oct. 14 on its 2026 Integrated Resource Plan. The plan maps out estimated energy needs over the next 15 years and the infrastructure APS plans to meet them with.
Coal mine equipment at work at Navajo Mine.
The utility announced the agreement at a Sept. 30 meeting of APS' Resource Planning Advisory Council, a stakeholder group formed in 2021. According to slides presented at the meeting, extending Four Corners' operations "provides diversity without development risk."
Slides presented at the meeting show that APS is expecting higher emissions and water use if the lifetime of the plant is extended beyond the 2031 retirement date.
Taggatz wrote that the decision doesn't mean APS is abandoning its "aspirational goal" to achieve carbon neutrality by 2050 and the extended operations of Four Corners would be coupled with renewable energy growth.
But Taggatz wrote: "The rapid increase in energy demand and frequency of extreme weather events means we must maintain flexible options to operate a 24/7 grid while avoiding reliability risks."
The announcement comes after a contentious fight over the Navajo Mine, which is located in the northwest corner of New Mexico and supplies the Four Corners Power Plant. An expansion plan was approved by the federal government earlier this year.
Both the mine and the power plant are major employers on the Navajo Nation. In 2018, Navajo Transitional Energy Co. bought a 7% share of the plant, which APS owns the largest portion of. The company indicated in a 2024 report that it had a "vision to save the Four Corners Power Plant and the Navajo Mine."
