Coal Communities’ Transition in Arizona Getting More Attention

Snell & Wilmer

Snell & Wilmer

The local economies of many communities in the southwest are tied to the operations of large coal-fired power plants.  As those plants start closing, the communities can face significant disruption in their local economies through loss of jobs, tax revenues and other impacts.  How to address those impacts involves both federal and states issues, multiple states, many different governmental entities and a variety of non-governmental stakeholders.

Some activity to address the transition away from coal generation has already taken place, such as New Mexico’s Energy Transition Act, which was adopted in 2019.  (Governor Grisham’s press release regarding the legislation can be found here).

Arizona Congressman Tom O’Halleran recently introduced federal legislation to address many of the issues related to coal communities transition: The National Energy Workforce and Providing Recovery Opportunities to Manage the Industry’s Shifting Economics (“New Promise”) Act.  This bill is focused primarily on impacts of the 2019 closure of the Navajo Generating Station outside Page, Arizona.  (The bill’s language and overview can be found here and here).

The Arizona Corporation Commission also has started a proceeding to address coal communities’ transition.  Docket No. E00000A-21-0010 has been opened “for the purpose of addressing the impact of the closures of fossil-based generation plant on impacted communities.”  As part of this docket, the Commission will be soliciting comments from impacted communities, the Arizona Governor’s Office, the Arizona state legislature, regulated and unregulated entities, state and federal agencies and public utility commissions in neighboring states.

The complexities of how to effectively address the coal communities’ transition in a fair and equitable manner will test a variety of the stakeholders.  Moreover, given the challenges, it may take some period of time to work through the process on multiple fronts.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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