The Phoenix-based utility will continue to operate units 4 and 5, which produce the majority of the plant’s power.
Closing the three oldest units could soon result in cleaner air throughout the region. Four Corners is a major producer of carbon dioxide, nitrogen oxides, particulate matter and mercury.
The changes also are likely to result in fewer jobs, as the shrunken plant will not need as many employees. APS has promised to achieve any necessary job reductions through retirements and normal attrition.
“We have committed to no layoffs at the plant, and that is true today,” APS spokesman Damon Gross said. “That’s still our plan.”
Some APS employees have transferred to the utility’s sites in Arizona, Gross said. Many others are at or approaching retirement eligibility.
Separately on Tuesday, the New Mexico Environment Department revealed a settlement that would close down two units at San Juan Generating Station by December 2017, The Associated Press reported.
Farmington leaders have been fretting for years over what the future holds for San Juan County’s two coal-burning power plants. All at once, the regulatory and economic pressures seemed to reach a breaking point.
The area will have to brace for job losses at both plants, said Mayor Tommy Roberts.
“We recognize that these developments will result in job losses either through attrition or layoffs,” Roberts said. “I still think our local economy is very vulnerable. We’re still in a state of economic uncertainty in San Juan County. The loss of jobs is not good news.”
Farmington’s unemployment rate was 6.5 percent in August, according to the New Mexico Department of Workforce Solutions. That was in line with the state average, and better than the national unemployment rate of 8.1 percent.
However, Farmington’s labor force has been shrinking. The area lost 1,800 jobs in the 12 months ending in August, according to Workforce Solutions.
The planned closure of Four Corners’ units 1, 2 and 3 is contingent on APS completing an agreement to purchase coal from neighboring Navajo Mine, operated by BHP Billiton. The existing agreement expires in 2014.
“Securing the coal contract is a prerequisite,” Gross said. “We need to make sure we have a reliable source of fuel for the plant before we take the next step.”
If the coal contract is extended, APS would then complete the planned purchase of Southern California Edison’s interest in units 4 and 5 for $294 million. That purchase is envisioned to be completed in December.
Once the purchase is complete, APS will begin decommissioning units 1, 2 and 3, Gross said. “We’re looking at the end of the year,” he said.
It is not clear how many jobs Four Corners Power Plant would support after units 1, 2 and 3 are decommissioned.
“Once the purchase is complete for units 4 and 5, we’ll have a better sense of what that organizational structure will look like,” Gross said. Four Corners has about 450 employees.
The plant will continue to need workers through the decommissioning process, he said. “The decommissioning work is going to require personnel as well.”
Four Corners’ power production capacity will decline to 1,540 megawatts, down from 2,100 megawatts, after the units are decommissioned.
That means less electricity for the Western energy grid as a whole. But due to the purchase, APS will own a larger share of the plant’s production.
“We’ll actually have more capacity for our customers,” Gross said.
The skyline west of Farmington may never be the same. The three decommissioned stacks will be removed, as will other structures no longer needed, Gross said.
The partial closure of Four Corners comes as natural gas has undercut coal as an inexpensive fuel, and coal power has come under increasing scrutiny from the U.S. Environmental Protection Agency.
“It’s a trend that’s replicating itself in many places,” said Mike Eisenfeld, New Mexico energy coordinator for the San Juan Citizens Alliance, an environmental group based in Durango, Colo. “Forty- and 50-year-old coal plants are problematic.”