coal navajo mine the company mines steam coal by strip mining methods near farm ington new mexico on the navajo indian reservation deliveries of coal to supply fuel for generation of electricity com menced in 1963 under a 35 year agree ment with extension options entered into with arizona public service company aps coal deliveries to the aps mine mouth generating units under this agree ment approximate 2.5 million tons annu ally in addition in 1966 a group of utilities including aps entered into a second fuel supply agreement of 35 years duration with options for extension this second contract called for the construction of two additional generating units adjacent to the mine site to increase the total generating capacity in two stages from the then exist ing 575,000 kw to 2,085,000 kw the first of the new generating units went into op eration in august 1969 but has not as yet reached rated capacity the second unit is scheduled for operation in mid 1970 the two new generating units will require estimated annual coal deliveries of about 6.0 million tons which will bring total coal production when all units are operating at full capacity to a rate of 8.5 million tons per year the increase in coal deliveries to 3.1 million tons this year from the 2.3 million tons in 1968 produced an improvement in profits from this operation however start-up problems of the new generating unit resulted in lower coal sales than had been anticipated commitments for coal deliveries under present fuel agreements approximate 326 million tons of the total strippable reserves of 1.1 billion tons the remaining 774 million tons of uncommitted reserves are available for sale as markets are devel oped to utilize these reserves as fuel for power generation an adequate supply of water is necessary the company pres ently holds a water permit from the state of new mexico consisting of 51,600 acre feet annually this water right is in excess of the needed requirements of cooling water for the generators that produce electric power under existing fuel con tracts in april 1968 the company reached an agreement with the united states department of interior giving it the right to purchase 44,000 acre-feet of water annually the combination of uncom mitted coal reserves coupled with avail able water would allow the company to more than double the size and output of facilities existing or under construction al the navajo min conveyor bells si s 48 inch slacking and five-unit power plant a photo sample is shown of the coal that is crushed and blended io rigid specifications delivery as fuel for the generation of electrii which is consumed in the southwestern united states