Farmington plans power generation for the future

Integrated resource plan calls for increased natural gas and solar power

Hannah Grover
Farmington Daily Times
The San Juan Generating Station is pictured in Waterflow.
  • The plan looks at the possibility of the San Juan Generating Station closing in 2022 or 2027.
  • Farmington would save $20 million if the power plant closed in 2027 rather than 2022, according to the electric utility director.

FARMINGTON — The Farmington City Council will consider an integrated resource plan for the city's electric utility system during its meeting at 6 p.m. Tuesday.

This plan evaluates the potential closure of the San Juan Generating Station in 2022, as well as a later retirement date of 2027. Farmington owns 8.5 percent of unit four of the generating station.

Farmington Electric Utility System Director Hank Adair said the city is required to create an integrated resource plane every five years that evaluates its sources of electrical power generation.

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In addition to electricity from the coal-fired San Juan Generating Station, Farmington gets power from two natural gas plants, as well as hydropower from Navajo Dam.

Farmington began the process of developing a plan more than a year ago. It sets four criteria: cost, risk, environment and operability.

The San Juan Generating station is seen, Thursday, June 16, 2016 in Waterflow.

Based on the analysis, the plan recommends that the city install flexible gas generation in the near future. Additional natural gas power would then be added in 2023 if the San Juan Generating Station closes. The long-term goals also include adding solar power to the mix.

While it has been identified as a long-term goal, Adair said the city will soon send out requests for bids to build a community solar array.

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In addition to the integrated resource plan, the council also will consider an amendment to its agreement with four other entities that have an ownership interest in San Juan Generating Station.

City Attorney Jennifer Breakell said the amendments are needed to reflect a Public Service Company of New Mexico subsidiary transferring its assets to PNM.

"It's not a major change," she said, adding that it does not create additional obligations for the city of Farmington.

The agreement will expire in 2022. PNM and the Tucson Electric Power Company have indicated they likely will choose to not enter a new agreement in 2022. This could result in the closure of the San Juan Generating Station.

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The San Juan Generating Station is pictured in Waterflow.

The agreement does allow Farmington to purchase PNM's assets in 2022. Adair said the integrated resource plan does not address that possibility. He said a decision about purchasing PNM's assets would have to be made in collaboration with the other owners in the power plant, such as Los Alamos County.

Breakell said city officials have not discussed the possibility of acquiring assets.

"It would be advantageous for San Juan Generating Station to remain open," she said.

The city predicts that replacing the generating station will cost about $97 million. If the San Juan Generating Station remains open until 2027, it will save the city an estimated $20 million, according to Adair.

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In other news, the Bloomfield City Council will meet at 6 p.m. Monday. The Kirtland Town Council will meet at 4 p.m. Tuesday, and the Aztec City Commission will meet at 6 p.m. Tuesday.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652.

Impacts from closure of the San Juan Generating Station in Waterflow will be a topic of a legislative committee meeting in Farmington. PNM has abandoned a plan to create a natural-gas fired power plant in the area after a study showed the anticipated demand would be lower than expected.