FARMINGTON — A New Mexico state senator is blasting a proposed 25-year lease extension for Four Corners Power Plant as a poor deal for the Navajo Nation.

The Navajo Tribal Council already has approved the lease, and it awaits President Ben Shelly's signature or veto.

Arizona Public Service Co. has threatened to begin closing the aging coal-fired power plant if the Nation does not quickly approve a lease extension.

"The lease extension will guarantee a meager annual payment of $7 million for 25 years," Sen. Lynda Lovejoy, D-Crownpoint, said in a letter to Shelly dated Saturday.

"Before you put your signature to the Council-approved APS lease, I urge you to seriously evaluate the impression that this is a fair agreement for the Navajo people. Are you willing to veto this measure and return it to the Council to ask, Is this the best you can do? Please bring forward a better deal,'" she said.

The lease represents a major decision for Shelly only six weeks after he was sworn in. Millions of dollars and hundreds of jobs hang in the balance.

"As the president reviews the legislation, he will review the lease from several different perspectives," said Sherrick Roanhorse, chief of staff for the Navajo Nation Office of the President and Vice President. "He will weigh job development, the environment, public health and revenue creation."

Roanhorse declined to comment specifically on Lovejoy's letter. Lovejoy and Shelly are political rivals — she finished second to Shelly in the presidential race.


Lovejoy said Thursday the lease payments should be tied to inflation or increased incrementally over time. She also criticized a waiver that she said could limit the tribe's ability to sue APS.

"To many of us, it's another giveaway," she said.

Secrecy surrounding the negotiations has left Navajo voters unsure of why the lease extension is structured as it is, she said.

"We are all unaware of how they arrived at $7 million," Lovejoy said. "That just doesn't sound like a good business deal."

The president's staff is evaluating the lease, Roanhorse said. Meanwhile, the Nation is working to develop a comprehensive energy policy.

The tribe has rich coal resources, and potential for solar and wind electricity production.

Four Corners Power Plant, which went online in 1963, generates 2,040 megawatts of electricity from five units. APS plans to shut down the three oldest units and purchase larger shares in the remaining two. The $294 million plan awaits the approval of state and federal regulators.

The plant, located 25 miles west of Farmington, faces increased scrutiny over its emissions of carbon dioxide, nitrogen oxide, mercury and other harmful substances.

Four Corners and the adjacent Navajo Mine, which feeds the plant, together employ more than 900 workers. The majority of employees at both locations are Navajo.

The current lease ends in 2016. The proposed extension would keep the plant running until 2041.

Damon Gross, spokesman for APS, the plant's operator, said approving the lease would benefit the Nation.

"The Nation's approval of the Four Corners plant site lease was the culmination of a two-year collaborative process," he said in an e-mail message. "Passage of the lease is a win-win for the people of the Navajo Nation and the long-term future of the plant."

In another sign of the Nation's ambitions, Shelly and other tribal officials traveled to New York City last week to brief Standard & Poors representatives. The tribe hopes to establish a credit rating to issue bonds.

Bond funds would go primarily to develop small businesses on the reservation, Roanhorse said.

"Our hope is this bond would help our people have a higher quality of life on the Navajo Nation," he said. "We want our people to come back."

Chuck Slothower: