Funding to assist with economic development following the closure of the San Juan Generating Station will be distributed to four projects in San Juan, Rio Arriba and Cibola counties.

The New Mexico Economic Development Department announced the awards on Friday. 

The department administers one of three funds created by the Energy Transition Act. 

The Energy Transition Act passed in 2019, two years after the majority owner of the coal-fired power plant announced plans to shutter it in 2022. The state legislature attempted to address the potentially devastating economic impacts on northwest New Mexico, particularly in San Juan County and the Navajo Nation.

The law created the ability for the Public Service Company of New Mexico to refinance its past investments into the power plant with securitized bonds, but a portion of those bonds had to go to three state agencies to assist with workforce and economic development as well as community projects on the Navajo Nation.

Once PNM distributed that money to the state, the legislature then had to allocate it. That appropriation occurred in 2023 and the Economic Development Department was tasked with distributing the $5.9 million in the Energy Transition Economic Development Assistance Fund.

The announcement this week also follows what has been a confusing and convoluted process that resulted in the state Indian Affairs Department retracting awards it granted through the fund it administers after the department learned that funding must be awarded through a request for proposals process.

That confusion stemmed in part from the request for information that the Energy Transition Act Committee sent out in September 2020. Following that, the committee heard presentations about each of those proposed projects.

Many of the entities who submitted proposals during the Energy Transition Act Committee’s request for information thought that they were following the process needed to secure grant funding from the Energy Transition Act.

In March of this year, the Economic Development Department sent out a request for proposals, which garnered 15 submissions. The submissions were then scored and the four that scored the highest received the grant awards.

The four that received funding were not among the more than two dozen that responded to the 2020 request for information. 

While the majority of the funding will go to San Juan County, more than $1 million of it will go to projects in other nearby counties. 

The San Juan County projects include a $3.6 million grant to Northern New Mexico Indigenous Farmers Inc. in Shiprock and a $1 million grant to the City of Farmington.

The Northern New Mexico Indigenous Farmers Inc. plans to use the majority of the grant funding to replace the Hogback Water Pumping Station, which provides irrigation water to farmlands in the Tse Dáá K’áán, or Hogback, Chapter of the Navajo Nation. The group plans on replacing it with a solar-powered pumping station that has both microgrid and energy storage capabilities. The antiquated facility cannot provide consistently adequate water throughout the agricultural season and the lateral irrigation lines were last updated in the 1960s. Because of that, about 2,000 acres of farmland have laid fallow for years.

The group is also using funding from the Gold King Mine spill settlement as well as severance tax bonds from the state.

Meanwhile, Farmington—which was a partial owner of the San Juan Generating Station—will use the $1 million grant to support a solar generation and battery storage project. This will help the city-owned electric utility replace some of the generation capacity it lost when the power plant shuttered.

The Energy Transition Act required that funding be spent in impacted communities, defined as within 100 miles as a crow flies of the power plant. NM Political Report requested the Economic Development Department provide a map demonstrating that these projects are qualified under the ETA to receive funding.

The map shows the Escalante Power Plant—which closed in 2020—and the San Juan Generating Station. The map further shows areas within the 100 mile radius of each of those power plants.

Bruce Krasnow, a spokesperson for the Economic Development Department, said that the projects had to be in a county that is within 100 miles of one of those two power plants.

Those projects outside of San Juan County include nearly $1 million for C&E Concrete in Grants and about $200,000 for Purple Adobe Lavender Farm in Abiquiú.

C&E Concrete will use the funding to develop three photovoltaic systems at its facilities that will have a total capacity of 245 kilowatts. One of the grid-tied photovoltaic systems will replace a diesel generator. The project also includes installing a storage system which will increase the electrical resiliency of the company’s headquarters and can also provide a community disaster relief shelter. 

The company previously provided high-grade calcium carbonate limestone to both the San Juan and Escalante generating stations. It employs 146 people and is now working to transition toward a clean energy future, according to the Economic Development Department. 

The Economic Development Department highlighted that C&E Concrete is located in a low-income, rural region that was significantly impacted by the closure of the Escalante Generating Station.

Meanwhile, the lavender farm in Abiquiú will also use the funding to install solar arrays. The farm plans on installing three separate arrays, which will help reduce its carbon footprint.