Upcoming hearing will focus on replacing the power PNM receives from San Juan power plant

Hannah Grover
Farmington Daily Times

FARMINGTON — As Public Service Company of New Mexico plans to cease its operations at the San Juan Generating Station, it has proposed several ways to replace the power it currently receives from the coal-fired power plant.

The replacement portfolio must be approved by the New Mexico Public Regulation Commission, which will have a hearing starting Jan. 21 in Santa Fe. The first day of the hearing is set aside for public comments.

PNM’s preferred scenario includes 280 megawatts of natural gas — the Piñon Gas Plant — located next to the existing San Juan Generating Station. This natural gas plant would operate until 2040.

PNM would also enter into power purchase agreements with two solar arrays totaling 350 megawatts as well as 130 megawatts of battery storage.

But the various parties who have intervened in the case have their own ideas of how the utility should replace the electricity.

Members of New Energy Economy, and its expert, tour San Juan Generating Station with the Public Service Company of New Mexico and its experts, Monday, Oct. 28, 2019, in Waterflow.

Some of the intervenors believe renewable energy should be emphasized and others say PNM should try to minimize economic impacts to San Juan County by locating all of its replacement portfolio within Central Consolidated School District boundaries.

Over the past few months, the intervenors have filed witness testimony. The intervenors will question some of those witnesses during the hearing. Intervenors must tell the PRC which witnesses they hope to question and how long they plan to spend questioning each witness prior to the hearing.

The witness testimonies can be viewed through the PRC’s document portal on its website.

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Some of the topics that will likely come up during the hearing include purchasing power from Enchant Energy or increasing the amount of solar, including building more solar in San Juan County.

As Enchant Energy’s proposal to retrofit the San Juan Generating Station with carbon capture technology gains attention, some of the intervenors say it could continue to provide PNM with electricity even if PNM does not continue operations.

One option to do that would be to enter a purchase power agreement with Enchant Energy to buy electricity from the San Juan Generating Station if the new company is able to keep it open and retrofit it with carbon capture technology. However, PNM has publicly said it has no intention of buying electricity from Enchant Energy.

A sign is seen on an outside wall of the San Juan Generating Station.

One of the intervenors that favors PNM buying electricity from Enchant Energy is Westmoreland Coal Co., which owns the San Juan Mine.

“There is no substitute for keeping the mine and San Juan Generating Station open and retaining all of these high-wage, full-time jobs,” said Steve Pierro, San Juan Mine's general manager, in testimony filed before the PRC.

He said the plan to build the Piñon Gas Plant would create hundreds of construction jobs but very few full-time jobs.

“The replacement resources PNM has proposed will have a minimal long-term effect in mitigating these impacts,” Pierro said.

San Juan Mine as well as coal stock piles can be seen from the San Juan Generating Station, Wednesday, Sept. 25, 2019, in Waterflow.

He said PNM should enter into a power purchase agreement with Enchant Energy.

Environmental groups that have intervened in the case, including Western Resource Advocates, oppose that proposal.

Patrick O’Connell, the senior clean energy policy analyst for WRA, disagreed with keeping the plant open, even with carbon capture technology.

“Installing carbon capture and assuming effective sequestration of the captured carbon dioxide will result in a significant reduction in carbon dioxide emissions, but won’t eliminate other criteria pollutant emissions or the mine-vented methane,” he said in his testimony filed with the PRC. “A shutdown of SJGS will have a significantly more robust environmental benefit.”

Water vapor and carbon dioxide are the main things that come out of the units at the San Juan Generating Station following multiple environmental upgrades over the years.

He acknowledged that closure will have an adverse economic impact to San Juan County, and especially to CCSD.

“Teachers, staff and facilities are critical to educating students,” O’Connell said in his testimony. “An unfunded school system can have an immediate community impact through lower employment or employment income and a long-term adverse impact in terms of preparing students for the future.”

He said the best way to achieve the goals of the Energy Transition Act is to build solar arrays in the CCSD boundaries.

PNM has been hesitant to fully invest in renewable sources with battery storage because it says the battery storage technology is not fully mature and a 100% renewable replacement portfolio could not provide reliable energy to customers.

More San Juan Generating Station news:

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