Impact statement: San Juan Mine could stay open until 2033

Impact statement: San Juan Mine could stay open until 2033

By Hannah Grover | Farmington Daily Times.

FARMINGTON — The San Juan Mine could continue to provide coal to the San Juan Generating Station, or another customer, until 2033.

The final environmental impact statement for the mine’s Deep Lease Extension recommends allowing up to 53 million tons of coal to be removed. That would allow the mine to supply coal to the power plant for at least another decade should it stay open past 2022.

The Office of Surface Mining, Reclamation and Enforcement released the final study Friday after years of work. A record of decision will be issued in April, according to a press release. The document and responses to public comments can be viewed online at

The final study evaluates three alternatives: keeping the mine open until 2033, closing the mine this year and keeping the mine open through 2022 when its coal supply contract with the power plant expires.

Keeping the mine open until 2033 would allow Westmoreland Coal Company to continue supplying coal to the power plant or to find a new customer if the power plant closes in 2022.

Read Entire Article Here

San Juan Generating Station is NOT destined to shut down

San Juan Generating Station is NOT destined to shut down

It is ready for transformation into a global leadership facility for environmental stewardship

Farmington, NM – City of Farmington’s post Legislative Session path forward: The City of Farmington thanks the San Juan Legislative Delegation for its hard work this session. We are excited to convey that even the Speaker of the House of Representatives publicly acknowledged the dedication and commitment our legislators, our Mayor, and other officials have to our community in their fight to keep San Juan Generating Station open. The SJGS Carbon Capture Retrofit project is gaining momentum. The Project has received the support of the Department of Energy. DOE confirms that SJGS is in the top 10% of facilities nationwide that are ideally suited for this type of technology and that not only is the technology proven, it is also economically viable.

With carbon sequestration, about 90% of the CO2 is removed, which makes it one of the most low-carbon sources of electricity on the planet. Even with current technology, increased levels of renewable portfolio standards cannot meet customer demand up to two-thirds of the day. As a result, natural gas facilities are needed to provide back-up power when the wind doesn’t blow and the sun doesn’t shine. With carbon sequestration technology, SJGS’s emissions levels are predicted to drop from 2182 CO2 lbs per MWh to 218 CO2 lbs per MWh. To put that into context, a natural gas-fired plant emits about 825 CO2 lbs per MWh; and wind or solar with natural gas back-up emits about 688 CO2 lbs per MWh. Given these numbers, carbon-sequestered coal not only becomes an extremely low-carbon source of electricity but also provides an economic source of baseload capacity that provides great benefit to grid resilience, stability and reliability.

Carbon Capture technology is also receiving national attention with the bi-partisan effort to pass the Utilizing Significant Emissions with Innovative Technology Act, aka the USE IT Act. This Act will expand existing incentives to invest in and develop Carbon Capture technology: “Over and over, experts conclude that carbon capture and storage is essential for both rapid climate mitigation and economic growth… If the US wants to maintain its leadership and commercial edge, the USE IT act is cornerstone legislation.” – Julio Friedmann, CEO, Carbon Wrangler

As indicated repeatedly by the legislative sponsors of SB 489 and legislative leadership, passage of SB 489 does not close San Juan Generating Station. PNM has decided it no longer wants to produce electricity from SJGS. Based on the contracts that have been in place for the last 35 years between all of the owners of SJGS, once PNM and the other owners abandon their interests in SJGS, the ability to own and operate the plant transfers to the City of Farmington as the last remaining owner

SB 489 also places new emissions limitations only on SJGS and specifies that the date of compliance of the new limitations is January 1, 2023 – the same date the legislation specifies that PNM will abandon SJGS. While the carbon capture project will bring SJGS into compliance on the new emissions, the date of compliance represents a hurdle that will need to be overcome. Speaker Egolf and other legislative leadership have indicated that an existing variance procedure is available to assist with this challenge. They have also encouraged the City to come back next year with more information on the project and have indicated if the Project is demonstrated to be viable, they will help make sure the project has a reasonable timeframe within which to be completed. Next steps: continued negotiations with current owners of SJGS and prospective future owners to make this transition a success. Additionally, a feasibility study is being launched and the City and our partners Acme Equity LLC are excited to take the next steps to make the project a success.

Media Contact:
Georgette Allen
(505) 320-9757


SB489 on Tipping Point New Mexico Podcast

SB489 on Tipping Point New Mexico Podcast

Attorney and utility expert Germaine Chappelle returns to the Rio Grande Foundation’s Tipping Point New Mexico Podcast to discuss SB 489 the Energy Transition Act. This legislation just passed the New Mexico Senate (although it had not when we recorded earlier in the week) and it would mandate 50% of all electricity generated in New Mexico be “renewable.” The bill would also shut down the San Juan Generating Station in the Four Corners area.

Chappelle has spent decades working on utility regulation issues and shares some of her in-depth knowledge of the issue and how it will impact New Mexicans at large and those in the Four Corners who would be most impacted.

City of Farmington asks Legislature for 90 days to complete feasibility study

City of Farmington asks Legislature for 90 days to complete feasibility study

March 4, 2019 Original Post Here

City asks Legislature for 90 days to complete feasibility study on application of carbon capture technology to keep San Juan Generating Station open

Senator Bill Sharer is offering today an amendment to SB 489, New Mexico’s Energy Transition Act, backed by the City of Farmington, San Juan County and Central Consolidated School District. The amendment as currently proposed, is asking for just 90 days to conduct a third-party study to determine the market and operational feasibility of constructing carbon capture technology (CCS) at San Juan Generating Station. San Juan entities have said they would support all measures currently included in SB 489 if they are granted just the 90-day window in the proposed time table to prove the feasibility. The installation of CCS would save over 1,000 jobs and extend the life of the plant. If installed, the proven technology would reduce CO2 emissions by 90 percent, exceed the extreme CO2 emissions limits proposed in the Energy Transition Act (SB 489) and become a cleaner source of electricity than the combined wind, backed-by-natural gas replacement power proposed by PNM. The Senate Corporations Committee will vote on the proposed amendment this afternoon.

Farmington Mayor Nate Duckett, strongly stated, “We are only asking for 90 days to see if we can create an extraordinary win-win-win for the real families whose livelihood depends on their job at the coal mine and SJGS, the local and state economies and for the environment.”

City Manager Rob Mayes added, “Preliminarily information suggests the installation of proven CCS technology is both economically and operational realistic at SJGS. We simply need the time necessary for our buyers to commission and pay for the independent feasibility study. If it’s not feasible, then so be it. But if it is, we have created a game changing opportunity for our state, region and potentially global environment.”

We need a real debate on the benefits and the costs of Energy Transition Act

We need a real debate on the benefits and the costs of Energy Transition Act

Albuquerque Journal – Guest Column
Tuesday, February 26th, 2019 at 12:02am

Senate Bill 489 – The Energy Transition Act – not so fast! The consequences of passing this bill without an honest debate could be devastating to the economics of our state.

Call it risk, call it unintended consequences, but to ignore bringing everything in the open … for political expediency is dishonest.

It is obvious that making New Mexico a completely carbon-free state will be a very expensive undertaking, and with the planned shutting down of the oil and gas industry, where will that money come from? New Mexico taxpayers and energy users. The shell game of PNM floating bonds to cover the cost and then raising energy rates to repay the bonds doesn’t hide the fact that we are going to pay for this transition.

Read Entire Column Here

Farmington City Manager Provides Update on San Juan Generating Station Acquisition

Farmington City Manager Provides Update on San Juan Generating Station Acquisition

Posted on: March 1, 2019 at

San Juan Generating Station Q&A


1.  Why are the City of Farmington and San Juan County working so hard to extend the life of SJGS and Mine?

An economic impact study conducted in 2017 indicates that approximately 1,600 direct and indirect jobs, representing a $117 million in annual payroll to real families, annual production and import taxes of over $53 million, (not including local and state indirect GRT) are dependent on SJGS and Mine. Countless families and local businesses will be negatively affected if we are not successful. Additionally, the property tax base of Central Consolidated Schools, San Juan College, and San Juan County will be enormously diminished.

2. How is the City Farmington able to sell SJGS when PNM is the majority owner and wants to close it down?

The City has been a minority owner of SJGS for over 37 years. The owner’s agreement originally established in 1981, provides that in November of 2018, all owners must proclaim their post 2022 intentions. All ownership shares of any departing owners convey to the remaining owners at no cost. Farmington will be the only remaining owner after 2022, thereby has obtained the rights to market 100% of SJGS. PNM and the other owners have a contractual obligation to cooperate in good faith to convey their interest in the plant for operations beyond 2022.

3. Why did Farmington choose ACME Equities LLC to enter an initial agreement to negotiate for potential acquisition of the SJGS?

The City of Farmington hired a law firm in Washington DC that specializes in energy transactions to market the plant. ACME Equities LLC was chosen after being vetted by our firm, because of their passion for the project, ability to successfully perform in the short timetable required, and because of their vision to install proven carbon capture technology (CCS) that would reduce CO2 emissions by 90%, thereby allowing the plant to operate potentially for decades to come. The next contractual step will be the signing of an Agency Agreement, followed by the completion of the ongoing negotiations for a formal Purchase Agreement.

4. What is Carbon sequestration or capture technology (CCS) and what would be done with the captured CO2?

The core science of CCS technology has been implemented commercially for decades. Application on large scale coal fired power plants is a proven technology already operational in two locations in North America alone. The CO2 would be transported to market on an existing pipeline.

5. How will the New Mexico Energy Transition Act (SB 489) currently being considered by the State Legislature affect this opportunity?

SB 489, potentially singles out SJGS, by imposing a unique emission standard only being applied to SJGS. The proposed standard is 800 pounds of CO2/MWh or a 60% reduction from the current emission levels. This bill if passed attempts to effectively render the operation of SJGS illegal by 2023 through a potentially unlawful governmental taking of private property rights. However, based on the proposed carbon capture equipment our buyers intend to install at SJGS which accomplishes a 90% CO2 reduction, the plant can easily meet this requirement, and in fact, achieve an additional reduction of 30% beyond the legislation’s requirement. The City of Farmington would support SB 489 with only one minor proposed amendment allowing the time necessary to actually construct and install the equipment with a guarantee to start construction by December 31, 2023.

6. Is the plant environmentally sound now?

Over the past 10 years, the owners of SJGS have invested over $300 million dollars in pollution control equipment. Combined with closing 2 of the 4 units, it has achieved a 60% reduction in pollutants, bringing the plant into compliance with President Obama’s 2015 proposed Clean Power Plan. The remaining problem is the CO2 which generates approximately 2,000 pounds of CO2/MWh. We do not believe that is a sustainably acceptable level for long term operation. The installation of carbon capture technology will reduce the CO2 level by 90% to an incredibly low estimated 218 CO2/MWh.

7. How is the plant economically viable if PNM determined they want out of the ownership for economic reasons?

The City of Farmington and a third party merchant operation have a different business model and different business concerns than PNM. The plant is a lowest cost supplier of electric and is economically viable with many years of useful life remaining. The revenue stream created by the sale of the captured CO2 increases the economic viability, as well as creates significant new capital investment and additional employment in our community.

8. Will PNM need to purchase any of the power from the plant in a merchant operation scenario beyond 2022?

No. The economics of the transaction are not dependent and do not contemplate any purchase of power by PNM.

9. Who will buy electricity produced by fossil fuel?

According to the US Energy Information Administration, in 2017, 62.9% of all electricity consumed in the U.S. was produced by fossil fuels. Only 17% was produced by renewables. Additionally, without scalable cost-effective storage, most renewable sources of electricity, such as wind and solar, still have to be backed up by a fossil fuel resource to cover the approximately 70% of time on average these sources are unable to produce electricity.

10. Will the City consider offering any tax breaks or “tax holiday” that would diminish the existing property tax base?

No such thing has been requested and the City would not consider if it were.

11. Will the City of Farmington incur any disproportional additional liabilities for environmental or reclamation costs for the plant?

No. The past and any future owner’s agreements will require all parties to bear their share of the costs for environmental and reclamation liabilities prorated to their percentage and time of ownership.

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