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The Daily Times toured the San Juan Generating Station. Here's a look inside the coal-fired power plant at the center of the state's energy debate. Farmington Daily Times

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AZTEC — After seven months of negotiations, Enchant Energy Chief Operating Officer Peter Mandelstam announced that the company working to keep the San Juan Generating Station open has signed a deal with Bank of America to help move the project a step forward.

The bank will arrange the 45Q tax equity financing that Enchant Energy will rely on as it works to retrofit the San Juan Generating Station with carbon capture technology.

“This is a very large step forward toward the success of this project,” Mandelstam said.

He said the deal will help Enchant Energy attract investors and finance the carbon capture retrofit.

The 45Q tax credits are intended to spur the development of carbon capture technology in the United States. If San Juan Generating Station is successfully retrofitted, its investors can receive $35 in tax credits for every ton of carbon dioxide that is captured and sold for enhanced oil recovery. If the carbon dioxide is pumped into an underground saline aquifer for permanent storage, the investors can receive $50 per ton in tax credits.

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Enchant Energy wants to install carbon capture on San Juan Generating Station. Here's how the technology works. Farmington Daily Times

A study is currently underway to determine if the carbon dioxide can be placed in an aquifer near the current power plant site.

Mandelstam explained that the tax credit is similar to tax credits that helped develop the wind energy industry, which provides an additional sense of security for tax equity investors.  

He said Enchant Energy is honored to work with Bank of America, which is a leader in tax equity financing.

Bank of America’s Renewable Energy Finance Team states that it has been the number one tax equity investor in the United States since 2015, citing Bloomberg New Energy Finance league tables. At the end of 2019, it had invested approximately $9.4 billion in tax equity for renewable energy development.

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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