FARMINGTON — A plan to expand Farmington's energy capacity left the city council divided after Tuesday morning's work session.
Councilors Jason Sandel and Mary Fischer say a proposal to take ownership of 60 to 65 megawatts of coal-fired production at San Juan Generating Station is dangerously shortsighted.
Councilors Dan Darnell and Gayla McCulloch voted to allow the city's electric utility to begin negotiations to take over the shares at the plant, which are being vacated by California utilities required to divest themselves of coal. Mayor Tommy Roberts broke the tie with a vote for the proposal.
"I've heard so many times from staff on deals that were too good to be true," Fischer said. "I think this will be one of them. ... What is facing us is a tsunami of problems."
But the deal could add electric generation capacity to the city for no up-front cost.
"Right now, our position is that we'll get power for almost no cost," Darnell said. "The terms are still a great deal. There was nothing in that presentation that gave me pause. If (the terms) don't change, this is a good deal."
San Juan Generating Station, located about 15 miles west of Farmington in Waterflow, produces 1,800 megawatts of power. The plant is owned by nine utilities.
The negotiations are the first part of the Farmington utility's long-term plan to expand and diversify its energy production portfolio, said Mike Sims, electric utility director.
"It gives us a tremendous amount of flexibility," Sims said. "We won't have to commit municipal bonds (to build a new plant)."
Plans include investing in a new gas-fired power plant for an estimated cost of $100 million, and developing renewable energy options, such as solar power, he said.
Roberts said the plan adequately addresses any risks.
"Ultimately, I think this is the most prudent first step in implementing our integrated resource plan," he said.
The final deal, if approved by the council, could raise the city's energy production from 160 megawatts to 221 to 226 megawatts.
The city's peak electric load demand is about 200 megawatts, according to Tuesday morning's presentation.
But Fischer says the city should have been diversifying its portfolio years ago.
"I think we have not been adequately progressive enough in building more power generation," she said. "We should have done that 10 years ago. We have virtually no renewables. Only six months ago, our consultant was saying, 'You don't want to get into coal.'"
The city's future lies in natural gas and related electric generation, Sandel said.
"Today's study showed natural gas is a key component in our portfolio," he said. "All we're doing is delaying the inevitable. Ultimately, I think that the power utility and the majority of council got what they wanted, which was to continue to put our head in the sand."