FARMINGTON — Aging infrastructure and tightening environmental regulations could make it harder to keep the lights on in Farmington.
Information provided at an electric utility department budget presentation on Wednesday showed that the region's challenges run far deeper than power plant unit closures and increased regulation of coal-fired energy production.
Department director Mike Sims started off with some good news.
"This utility is up there with the best of them," he said.
The Farmington Electric Utility System, however, should be the best, Sims said.
Other utilities have to deal with extreme weather, tornadoes, ice storms and high winds, he said. They provide a similar level of service and reliability as Farmington, even with those added maintenance costs.
Old infrastructure is putting Farmington's ability to provide affordable and reliable power in jeopardy, Sims said.
Over the years, the city's utility has made a number of good investments in electric generation capacity, including shares at San Juan Generating Station, construction of Bluffview Power Plant, Animas Power Plant and hydroelectric generation at Navajo Dam, he said.
The time for renewed investment is fast approaching, Sims said.
Equipment at Animas Power Plant was installed about 60 years ago, and some at San Juan Generating Station was installed in the 1980s, he said.
"You can't operate forever," Sims said. "There comes a time when you can't just add generation, you have to replace some. That time is coming up."
Operation and fuel costs at the Animas Power Plant are about $70 per megawatt-hour, the most expensive out of the utility's six main electricity assets, according to Wednesday's presentation. A megawatt-hour is roughly the amount of electricity used by 330 homes in one hour.
In addition, the electric utility is operating with the same manpower as during the 1960s, Sims said.
About 10 years ago, utilities across the country began using engineering consultants for construction projects, Sims said. Using consultants speeds up project completion times.
The Farmington's electric utility still uses its engineers and construction staff to complete much of its projects, he said.
"We're behind the times in that respect," he said. "We can't keep up with (our) workload with the manpower we have. We can't expect to put Band-Aids on this utility and expect it to run forever."
The utility's aging infrastructure was a top concern for Mayor Tommy Roberts.
"Staff has spent some time restructuring," he said. "That change in the internal process will lead to the completion of projects (at a faster rate)."
Roberts asked whether investing in extra generation capacity and selling the excess electricity on the open market would be an option for the utility.
"Professionally, I think it's a very risky move to get into the wholesale market," Sims said.
Any additional generation built in the area would likely be a combined-cycle natural gas plant, he said.
Combined-cycle power plants use a system of heat engines working in tandem to drive electrical generators. The exhaust from one engine serves as a heat source for another engine, increasing efficiency.
"With (those) plants, they're built very close to where the (power demand) is," Sims said. "Just because the gas field is here doesn't necessarily mean the gas is that much cheaper."
The utility occasionally sells excess power during off-peak periods, he said.
Those sales do not generate much revenue for the utility.
"Even the power that we sell is at such a reduced cost that we're just breaking even on it," Sims said.
Greg Yee can be reached at email@example.com; 505-564-4606. Follow him on Twitter @GYeeDT.