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SRP, Navajo square off over hiring practices

PAGE — Utility companies are battling the Navajo Nation in federal court over the tribe’s power to push for preferential hiring of Navajos at a key power plant in the Southwest.

The legal wrangling involves the Navajo Generating Station, which sits on native-owned lands near Page, Ariz. The plant burns coal mined nearby to produce 2,250 megawatts of electricity for customers in Arizona, Nevada and Los Angeles. It also powers the pumps that bring water to Phoenix through the Central Arizona Project canals.

In the 1960s, utility companies approached the Navajo Nation about building a regional power plant in the area. In 1969, a group of utility companies led by Tempe-based Salt River Project signed a lease that opened the $1.1 billion facility for business.

The lease specifically states that the tribe “will no directly or indirectly regulate or attempt to regulate [the utility companies] in the construction, maintenance or operation of the Navajo Generating Station,” according to the 16-page complaint SRP filed recently.

In 1985, tribal leaders passed a new law that required all employers doing business on or near their lands to give certain hiring preferences to Navajo employees and the spouses, plus prevailing wages. It also allowed the tribe’s own labor office to investigate labor disputes at the plant.

Then in September 2004, a plant employee who was Navajo filed a wrongful termination claim against SRP. In March 2005, another employee filed a claim over the same issue.

In both cases, the Navajo Nation’s labor office backed the employees, the tribe’s lower courts backed SRP, and the tribe’s supreme court backed the employees on appeal.

SRP sought help from the U.S. Department of the Interior, the liaison agency for Native American affairs, and asked Navajo judges to wait for its testimony. But judges refused, according to the complaint, and hearings for both cases are now set for the first week of April in Tucson.

SRP claims a Navajo victory could undermine the operation of the power plant. The company is seeking help from U.S. judges, and has hired lawyers from two of the Valley’s most prominent law firms to argue the case.

Phoenix lawyers John Egbert, Paul Johnson and Lisa Coulter are representing SRP.