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.
As the northwest corner of New Mexico prepares for the closure of the San Juan Generating Station, at least one proposed project to help displaced workers could lead to increased natural gas extraction. Last year, the Energy Transition Act committee sent out a request for information on projects that could be funded through the portions of bonds that could be set aside for economic diversification, workforce training and assisting the Navajo Nation. This resulted in more than two dozen proposals, however the funding is not yet available due to a lawsuit that has postponed the sale of low-interest bonds.
The lawsuit in the New Mexico Supreme Court argues that shareholders should bear more of the costs of closing the power plant instead of ratepayers, who currently will pay for the bonds through a non-bypassable charge on their bills. The bonds will be sold by Public Service Company of New Mexico, the primary owner of the San Juan Generating Station, and will use $360 million of bonds to refinance past investments into the power plant and about $20 million of that money will be used to assist the communities impacted by the closure.
Jason Sandel, a convener for the ETA committee, said there will be a meeting this summer to discuss the proposed projects. A full list of projects submitted for funding consideration and details about each of the projects can be found at dws.nm.state.us/ETA.
Government entities, utilities and watchdog groups say a merger between Public Service Company of New Mexico and Avangrid could harm both ratepayers and the environment unless protections are included. These entities filed testimony in a New Mexico Public Regulation Commission case evaluating the merger. This merger is subject to the PRC approval as well as approval from the Federal Energy Regulatory Commission. PNM’s parent company, PNM Resources, is seeking to merge with Avangrid, a U.S. subsidiary of renewable energy giant Iberdrola, which is based in Spain. The PRC hearings related to the merger are scheduled to start on May 3 and testimony has been filed expressing a variety of concerns.
With a unanimous vote Wednesday morning, the New Mexico Public Regulation Commission (PRC) ended one piece of a year-long debate on the future of coal in the Four Corners region. The utility PNM, which is slated to exit the San Juan Generating Station in 2022, will now need to rely on 100 percent renewable energy and battery storage to replace the power generated at the coal-fired plant.
Commissioners were faced with the tough decision of weighing the economic future of the Four Corners area with the climate goals of the landmark Energy Transition Act (ETA), a 2019 law which mandates the state move to 100 percent carbon-free electricity generation by 2050.
“With all the facts put on the table, and all the facts that our hearing examiners worked on, we’re moving New Mexico forward,” said PRC chairperson Theresa Becenti-Aguilar during the meeting. “And the changing energy economy in the communities of the San Juan station—it’s happening, it’s moving today.”
The decision was lauded by a multitude of clean energy advocacy, environmental and grassroots community groups that called on the commission to approve the replacement power scenario proposed by the Coalition for Clean Affordable Energy. The proposal includes 650 MW of solar resources and 300 MW of battery storage resources, with 430 MW of solar and $447 million worth of capital investments located within the Central Consolidated School District in San Juan County. Another 520 MW of renewable energy and roughly $500 million of capital investment would be located in McKinley County and the Jicarilla Apache reservation in Rio Arriba County.
The Public Regulation Commission voted unanimously Wednesday to approve PNM’s application for abandoning the San Juan Generating Station and using securitization bonds to recover some of the investment PNM will lose in the process. The decision, which was widely expected, came after the state Supreme Court ordered the PRC to apply law changes made by the Energy Transition Act towards PNM’s exit of the coal-fired plant. The ETA, which requires all the state’s utilities to transition to “net zero” electricity generation by 2050, enabled PNM to use securitization as a mechanism to help pay for its transition away from coal. But PRC commissioners were previously hesitant to apply the new law to PNM’s plans for exiting the San Juan Generating Station. PNM announced its plan to close the plant in 2017, but didn’t submit the application to do so until after the ETA was in effect.
RELATED: Natural gas will play a big role in state’s energy transition
The PRC’s decision was widely lauded by a coalition of clean energy and environmental justice advocates who say the securitization will reduce customers’ utility bills, provide financial support to the coal-dependent communities in San Juan County, and help create new clean energy jobs.
When Gov. Michelle Lujan Grisham signed the Energy Transition Act into law in March, she called the law “transformational” and “a really big deal.”
“The Energy Transition Act fundamentally changes the dynamic in New Mexico. This legislation is a promise to future generations of New Mexicans, who will benefit from both a cleaner environment and a more robust energy economy with exciting career and job opportunities,” she said at the time in a statement. But the first attempt to implement the new law hasn’t been smooth. The investor-owned utility PNM announced in 2017 that it planned to close the San Juan Generating Station, a coal-fired plant located outside Farmington. But PNM didn’t formally submit to the Public Regulation Commission (PRC) its consolidated application for abandonment, securitization and replacement power for the power plant until July 2019, weeks after the Energy Transition Act had been signed into law.
Energy engineer and consultant David Schlissel questioned some of the claims presented by Enchant Energy and consulting firm Sargent & Lundy on the feasibility of retrofitting the San Juan Generating Station with carbon capture system technology. PNM, the majority stakeholder in the plant, plans to shutter the facility by 2022 as part of the utility’s wider goal of ending all coal-fired power generation in its portfolio by 2031. That strategy aligns with Gov. Michelle Lujan Grisham’s Energy Transition Act (ETA) law, which would require 50 percent of the state’s electricity generation to come from renewable energy sources by 2030.
Enchant Energy has proposed acquiring 95 percent of the coal-fired San Juan Generating Station to install a carbon capture system that it says would offer a cost-effective, low-emission solution to keep the coal-fired plant open beyond 2022. Schlissel testified his concerns about the proposal before the Public Regulation Commission in response to the recent testimony of PRC staff witness Dhiraj Solomon, acting engineering bureau chief of PRC’s utility division. Solomon argued that a carbon capture system would enable the plant to operate within the emission requirements of the ETA.
Sierra Club filed Schlissel’s testimony with the PRC late last week.