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San Juan Generating Station is NOT destined to shut down
It is ready for transformation into a global leadership facility for environmental stewardship
The Path Forward for San Juan Generating Station
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.