Rep. Mark Finchem’s legislation that will have a devastating effect on rural communities by repealing the Transaction Privilege Tax on coal passed out of committee on Wednesday.
HB2003 will exempt the sale, storage, use and consumption of coal from Transaction Privilege Tax (TPT) and use tax.
Finchem has argued on behalf of Peabody Energy/Arizona Western Coal Company that the repeal could save the Navajo Generating Station. However there is little support for keeping the plant open due to a drop in natural gas prices and the high cost of maintenance.
Mike Hummel, deputy general manager of SRP, the plant’s operator, said in a press release that because natural gas has become a viable long-term and economical alternative to coal power, and SRP has an “obligation to provide low-cost service” to more than 1 million customers, it would be irresponsible to pass the “higher cost of operating NGS” onto customers.
Representative Bob Thorpe stated, “The closing of Navajo Generating Station (NGS) will be a great loss to Northern Arizona in terms of jobs and needed tax revenue. Unfortunately, ending the TPT on coal will not save NGS or the coal mining jobs, and will instead accelerate by two or more years the economic hardships for the residents of my district’s rural Navajo County. As I testified in the Ways and Means committee on Wednesday in opposition to the bill, the negative impact to state and local revenue will be about a $35 million, including over $2 million, to Navajo County, which cannot easily be made up.”