It was July 1, 1969. Representatives of Public Service Company of New Mexico and Tucson Gas and Electric signed an agreement to partner on the San Juan Generating Station. The first unit would be 330 megawatts and the two entities would evenly share the ownership and power generated. More than half a century later, the power plant they agreed to build is shutting down this week and for many of the activists who have fought against the coal-fired facility the moment feels a bit bittersweet. While they are excited to see the power plant that has emitted pollutants close, they say their work is not yet over.
With less than a month left before the scheduled closure of the coal-fired San Juan Generating Station, the New Mexico Environment Department is working on a rule that would ensure any future coal-fired generation emits less than 1,100 pounds of carbon dioxide per megawatt hour. The new emission requirements will go into effect on Jan. 1 and will impact both existing and future power plants. “The only affected facility that there is right now, even though it is closing down, is the San Juan Generating Station,” Robert Spillers, an environmental analyst with NMED’s Air Quality Bureau, said during a stakeholder engagement meeting at San Juan College on Thursday. The meeting on Thursday included discussions about the rulemaking process for coal plants as well as the new ozone precursor rule that applies to oil and gas facilities.
After telling the Public Service Company of New Mexico to issue rate credits so that customers are not paying for a coal plant that is being retired, state regulators are now requesting proof that the utility has done so. The New Mexico Public Regulation Commission unanimously approved an order asking PNM to show that it has complied with its order.
The rate credits should have started this month and will appear on customers’ electricity bills. They should be retroactive to July 1. For now, the average residential customer should see a $1.76 rate credit to reflect that unit one of the San Juan Generating Station is no longer in use. Starting in October, the rate credit will increase to $8.19 for residential customers after unit four, the last operating unit at the power plant, is retired.
While accusing the state’s largest electric utility of purposefully misleading regulators, the New Mexico Public Regulation Commission ordered the Public Service Company of New Mexico (PNM) to issue rate credits to customers upon the closure of each remaining unit of the San Juan Generating Station. In its order, approved by a unanimous vote Wednesday, the PRC adopted the hearing examiners’ recommended decision that was made public earlier this month. PNM will also be required to include a prudency evaluation of its decision to delay issuing bonds in its next rate case. If it is found that the delay led to increased interest rates, the shareholders could be asked to absorb the costs of the increased interest rates. Unit One of the San Juan Generating Station will close this week and Unit Four will close this fall.
Public Service Company of New Mexico (PNM) plans to continue operations of unit four of the San Juan Generating Station through Sept. 30 to avoid power shortages this summer. The state’s largest utility announced its plans on Thursday and is seeking approval from the New Mexico Public Regulation Commission. In an interview with NM Political Report, Vice President of Generation Tom Fallgren said PNM needs the PRC’s approval by March 25 to provide adequate notice to Westmoreland Coal Company, the owner of the San Juan Mine, which provides the power plant with coal. If the extension is not approved, mining at the San Juan Mine will end March 26.
While the cause of the collapse of a cooling tower at unit one of the San Juan Generating Station has not yet been identified, Public Service Company of New Mexico has provided the New Mexico Public Regulation Commission with some more information regarding the event. Following the collapse, the PRC issued a notice of inquiry into the incident, which occurred in late June, and opened a docket. PNM filed a response to questions raised in the notice of inquiry on Aug. 16 and the commission discussed the response during the weekly meeting on Wednesday. In its response, PNM stated that the cause of the collapse has not yet been identified.
Beyond coal plants, carbon capture and sequestration may help with cement manufacturing and create new industry in New Mexico, according to a presentation at the Legislative Finance Committee on Thursday. Others, however, remain skeptical of the industry’s viability. Wiley Rhodes, co-founder of Escalante H2 Power, said a retrofit of the shuttered Escalante Power Plant could do more than just generate electricity. Escalante Power Plant is currently owned by Tri-State Generation and Transmission Association, Inc., Escalante H2 Power is planning on purchasing the plant. Rhodes’ company is working to make Escalante Power Plant the first coal-fired power plant to be transformed into a hydrogen facility.
The New Mexico Public Regulation Commission plans to open an investigation into a cooling tower collapse that happened in late June at the San Juan Generating Station. “We had a major baseload component of our power system go down and we were in the dark about it,” said Commission Chairman Stephen Fischmann, who added that an investigation will create a formal record. This unanimous decision came after Public Service Company of New Mexico, the majority owner and operator of the plant, presented information to the commission during a Wednesday meeting. It was the first time that PNM officials spoke publicly about the incident. Mark Fenton, the executive director of regulatory policy for PNM, said the company was concerned that market prices could increase if it became widely known that the power plant’s unit was not supplying electricity to customers.
Unit one of the San Juan Generating Station was taken off line last week after a cooling tower collapsed, sources familiar with the incident told NM Political Report. The cooling tower is necessary to operate the unit and, unless it is repaired, the unit will not be able to produce power for Public Service Company of New Mexico and Tucson Electric Power. The two utilities share ownership of the unit and each receives 170 megawatts of power. No one was injured during the June 30 collapse, which came almost exactly one year before the state’s largest utility plans to end operations of the power plant. The plant was idle on the morning of July 6 and neither unit one nor unit four were producing power.
A group of nine environmental organizations sent a letter to the Department of Energy secretary requesting the initiation of a multi-agency environmental impact statement looking at Enchant Energy’s proposal to retrofit the San Juan Generating Station with carbon capture technology. If an EIS is required, it would delay the project substantially, but the environmental advocates point out that similar projects have gone through the process. The carbon capture retrofit will prevent the loss of tax revenue in San Juan County and preserve jobs at the coal mine and power plant. However, critics say it is an expensive project and it is unclear who will buy the electricity if it is successful.
Related: Critics: San Juan Generating Station carbon capture proposal ‘overly optimistic’
“Enchant Energy is actively working on securing the environmental and other permits needed for the project to add carbon capture at San Juan Generating Station with the appropriate federal, state, and local agencies,” said company CEO Cindy Crane in a statement emailed to NM Political Report. “This project directly addresses the need for sustainable, reliable, low-carbon power generation necessary to meet climate change emissions goals.