FARMINGTON – City leaders have ended their bid to retrofit a shuttered coal-fired power plant in northwestern New Mexico as a way to preserve jobs and tax revenue for Farmington and surrounding communities.
The city of Farmington announced Tuesday it had ended the effort began years ago to acquire the San Juan Generating Station and run it with partner Enchant Energy as part of a carbon capture project.
The announcement came hours after a closed meeting with city councilors, the city's legal team and the head of Enchant Energy, the Daily Times reported.
City officials said a recent decision by an arbitration panel to allow Public Service Co. of New Mexico and other plant owners to dismantle and auction key parts of the plant was a “catastrophic blow” to the partnership with Enchant. The city had hoped the panel would instead put on hold the auction.
“For a region already facing economic challenges, we have worked diligently to keep SJGS open with carbon capture,” Farmington Mayor Nate Duckett said in a statement. “Unfortunately, profit and the (Energy Transition Act) have taken precedence over the livelihoods of real people and families.”
PNM, the state's largest electric utility, demanded the matter go to arbitration after the city sued in September to stop the auctions and start talks with other plant owners.
The case was moved to federal court and arbitration followed. The three-member arbitration panel rejected the city’s second try to halt auctions of electrical components Dec. 14.
PNM on Monday threatened legal action against the city if it continued to delay the plant's decommissioning.
Enchant Energy CEO Cindy Crane said Tuesday the company is still part of the Farmington community and will remain so. Enchant and the city joined forces in 2019 in an effort to keep open the San Juan plant, which produced its last bit of electricity in September before going offline.
Crane said work done to reopen the power station included a successful engineering and design study related to plans for large-scale decarbonization.
“It was a tough decision by the city,” Crane said. “Unfortunately, it’s the outcome that occurred.”
Crane said Enchant has other projects in the works but declined to provide details due to nondisclosure agreements.
Duckett said work will continue to strengthen the local economy.
“I deeply regret that the arbitrators’ decision means we are not able to help our dislocated workers support their families and can only offer as consolation that we will continue our efforts to help mitigate these devastating impacts,” Duckett said.
PNM did not comment on the city's announcement.
The utility, which is overseeing the decommissioning, argued in a filing made as part of the arbitration process that everything to be sold was replaceable and that the city would have enough time to do so since the carbon-capture project would not be operational until September 2027.
PNM also argued that much of the equipment is over 30 years old and would need to be replaced as part of any proposal to operate the plant in the future.
The arbitrators noted the potential for PNM and the other owners working to decommission the plant to face increased costs if the process was stopped.
