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FARMINGTON — A nearly two-week long hearing in front of the New Mexico Public Regulation Commission's hearing examiners earlier this month focused on the future of the San Juan Generating Station.

The first day of the hearings allowed the public to comment on the future of the San Juan Generating Station. Miners from San Juan County expressed concerns about their jobs while ratepayers said they want clean electricity and activists highlighted the role fossil fuels play in climate change.

Many of the people who spoke referenced Enchant Energy’s proposal to keep the power plant open by installing carbon capture technology.

Following the public comment period, the evidentiary hearing began.

Here's a look at a few of the topics discussed during that hearing. The transcripts are available on the PRC's case lookup.

The structure may remain standing for decades

If the power plant closes in 2022, PNM’s preferred option is to retire it in place, meaning the steel structure would remain standing for 25 years. PNM officials say the decommissioning cost of retiring the plant in place would be $58.533 million for all the owners and PNM would be responsible for 48% of the decommissioning costs.

 The Energy Transition Act allows PNM to use securitization to fund up to $30 million of decommissioning and reclamation costs. Decommissioning will occur at the power plant site, PNM officials explained. Meanwhile, reclamation occurs at the mine site. 

PNM, Tucson Electric own the land the power plant sits on

PNM Vice President of Generation Thomas Fallgren said PNM and Tucson Electric Power jointly own the majority of the property where the San Juan Generating Station is located. PNM is the sole owner of 13 acres as well as the Shumway project. While Farmington has the right to acquire the power plant, Fallgren said it does not have the right to inherit the real estate where the power plant is located.

PNM working to decrease emissions

PNM plans to start phasing out natural gas starting in 2028 as it works to decrease emissions. Fallgren said there are three technologies it could implement to reduce emissions. These include capturing methane from the environment to use as a fuel source for a combustion turbine, installing carbon capture on a natural gas plant or using an emission-free fuel like hydrogen.

Further reading: PNM releases new carbon capture evaluation

Carbon capture often took center stage

The possibility of installing carbon capture technology was brought up during questioning several times throughout the hearing, including when questioning PRC staff member Dhiraj Solomon.

The PRC staff is the sole party recommending denying PNM’s application. Farmington does not oppose PNM’s application and instead hopes to take ownership of the plant and transfer the majority ownership to Enchant Energy.

“I want to make one thing very clear: I have not recommended denial of abandonment,” Solomon said. “I have not opined on abandonment one way or another. I have said the application is incomplete and deficient, and PNM has not done the complete analysis, including a front-end engineering design study. For those reasons, the application should be denied. Once it’s denied, PNM can amend it or PNM can amend it before the denial.”

Solomon said the plant cannot remain open after 2023 without reducing its emissions to less than 1,100 pounds of carbon dioxide per megawatt hour. He said that could be achieved through carbon capture or through a retrofit with pre-combustion integrated gasification and combined cycle technology.

Solomon said he has not yet reviewed PNM’s filing that it made in November stating carbon capture technology would cost customers more than its proposed replacement power scenario. However, the analysis PNM filed was not a front-end engineering and design study.

PNM proposed pre-funding some economic assistance

One of the key aspects of the application is securitization, or low-interest bonds refinancing past investments into the power plant and funding economic assistance for impacted communities.

This was made possible by the Energy Transition Act, although it is still unclear whether the new law will be applied to the case.

PNM has proposed pre-funding some of the economic assistance to help coal miners that could lose their jobs earlier than 2022 if the power plant closes. PNM officials said this funding could be available in January 2021. 

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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