Economic uncertainty will drive local government decisions in 2019
Future of mine, power plant up in air as new year approaches
FARMINGTON — The upcoming year will see local governments fighting to save and create jobs while facing the restrictions of limited budgets.
One of the uncertainties northwest New Mexico will face early in 2019 is the Westmoreland Coal Company bankruptcy. Westmoreland, the owner of the San Juan Mine, filed bankruptcy this fall. The bankruptcy case could mean a new owner for the San Juan Mine, which is the sole source of coal for the San Juan Generating Station.
Meanwhile, the future of the San Juan Generating Station is also uncertain. The Public Service Company of New Mexico will likely file an application with the New Mexico Public Regulation Commission in 2019 to abandon — or close — the San Juan Generating Station.
In 2017, PNM released an integrated resource plan that stated keeping the generating station open past 2022 would be more expensive than closing it when its coal purchase contract expires in 2022. The PRC accepted that plan, which county officials say will pave the way for closing the generating station.
The closure of the generating station could have severe economic impacts on San Juan County, and local government officials are working to diversify the economy as the 2022 closure looms. Local leaders plan to work during the upcoming state legislative session to secure funding or delay the closure for a few years.
The closure was cited as a reason for the city of Farmington to raise its gross receipts tax to pay for community transformation and economic diversification efforts. The higher gross receipts tax rates will go into effect in January.
Farmington will continue efforts to diversify its economy in 2019, including making investments into infrastructure intended to increase outdoor recreation opportunities in the area. That includes expanding the trails system.
The economy will continue to be a major driver of decisions for local government officials throughout 2019. San Juan County is making adjustments due to a budget deficit, and Aztec’s higher gross receipts tax rate, which was approved shortly after Farmington’s, will go into effect in January. Bloomfield will continue to look for ways to save money while paying for major expenses like a wastewater treatment plant.
In other news, the Hilcorp Energy Co. and the Oil Conservation Commission likely will face scrutiny in 2019 as a backlash to the OCC approving an application to increase well density in the Blanco-Mesaverde oil and gas pool in the San Juan Basin. But the fight is far from over. Proponents for increased well density argue that it will lead to economic growth in San Juan and Rio Arriba counties. Opponents say it will have devastating environmental impacts. State Land Commissioner Aubrey Dunn has asked New Mexico Attorney General Hector Balderas to look into conflicts of interest in the OCC related to the well-density application.
Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at email@example.com.