The possible new operator of the largest coal-fired power plant in the western U.S. told Arizona regulators this week the company would run the Navajo Generating Station (NGS) at less than half its installed generation capacity in order to maintain profitability. An official for Illinois-based Middle River Power (MRP) also said the plant would operate with fewer workers and would pursue a new lease and coal supply agreement.

The current owners of the 2,250-MW Navajo station in Page, Arizona, which include Arizona Public Service (APS), have said they plan to close the plant in 2019 unless it can be sold. Negotiations are continuing with New York-based Avenue Capital Group, a global investment firm that invests in distressed companies and the distressed debt market, as the potential new owner, with MRP—headquartered in the Chicago suburb of Deerfield—as the potential new operator. Russell Begaye, president of the Navajo Nation on whose land the plant sits, recently said a lease agreement with Avenue Capital and MRP could be discussed by tribal lawmakers at a meeting in October.…

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