FOR IMMEDIATE RELEASE

Scott Harelson, SRP, (602) 236-2500
@ScottHarelson
September 20, 2018

Middle River Power Ends Pursuit of NGS Ownership

New York investment company Avenue Capital Group and Illinois-based Middle River Power (MRP), announced today that they are no longer seeking to purchase the Navajo Generating Station (NGS) near Page, Ariz., and operate the plant after the current owners stop their operation the coal-fired plant on Dec. 22, 2019.

In February 2017, the current utility owners of the nearly 50-year old plant made the difficult decision to end their participation in NGS when the current term of their lease with the Navajo Nation ends in 2019 after it became clear that current and forecasted natural gas prices had made coal-fired generation at NGS uneconomical.

Shortly after this decision, the U.S. Department of the Interior, along with other stakeholders, launched an effort to keep the plant open while Peabody Coal retained a consultant, Lazard, to identify potential new owners.

Salt River Project (SRP), as operator of NGS, worked closely with all interested parties and immediately created a virtual data room that provided all information about the plant from operation budgets and maintenance activities to personnel and administrative costs. Initially, 16 entities expressed interest and signed non-disclosure agreements.

To help provide visibility and information about NGS, SRP hosted numerous tours of the plant over the past 18 months for prospective buyers, elected officials, regulators and representatives of the Navajo Nation and Hopi Tribe as well as federal government officials.

Tours were conducted for MRP representatives in March and April and they were invited to attend a meeting of the Navajo Project Coordinating Committee where they were provided information about the owners’ understanding of federal environmental requirements, the Navajo Nation approval process and other major tasks that would need to be accomplished for a successful transition.

Additional meetings with MRP, the Navajo Nation and others were subsequently held in Flagstaff in an effort to move the process along, identify needed agreements and set milestones.

"We appreciate the time and effort made by MRP officials as they considered the possibility of purchasing NGS," said SRP General Manager and CEO Mike Hummel. "We understand their decision to end our discussions and will continue to focus on our dedicated employees and their efforts to finish strong in our final year of operations of the plant. We will continue to work with and communicate with the Navajo Nation and the Hopi Tribe related to NGS operations."

Regular employees of NGS are now being redeployed to other facilities as SRP carries out its commitment to offer employment within SRP to those who desire. SRP anticipates that by December 2019, only a small number of permanent employees will remain at NGS, and that it will be operating NGS primarily with temporary contract employees at that time.

SRP continues to conduct activities in a safe manner for its employees and make capital investments necessary to complete decommissioning of the plant within the current agreed upon timelines with the Navajo Nation.

The utility owners of NGS include SRP, Arizona Public Service Co., Tucson Electric Power Co., NV Energy and the United States.

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