PNM gets break from EPA on San Juan coal plant deadline

PNM Resources (NYSE: PNM), the parent of Public Service Co. of New Mexico, said July 3 that it has been notified that the U.S. Environmental Protection Agency has granted a 90-day stay in the effectiveness of the federal plan for the coal-fired San Juan plant to meet visibility requirements of the Clean Air Act in New Mexico.

This delay “provides a fresh opportunity to consider alternative approaches to meet the regional haze requirements at San Juan Generating Station,” said Pat Collawn, PNM Resources chairman, president and CEO. “We believe the state plan works for the environment and for the people in our state, but we are open to other balanced approaches that consider customer costs, environmental benefit, and the economic impact to the citizens of the state, particularly the Four Corners Region. We welcome this new development and look forward to a collaborative effort to identify effective alternatives for moving forward.”

Two different plans were developed for New Mexico to meet regional haze requirements of the Clean Air Act: one by the state and the other by the EPA. Both plans meet the requirements of the Clean Air Act, but provisions of EPA’s plan related to San Juan are estimated to cost significantly more than the state’s plan, with almost no discernible difference in visibility, PNM noted.

The state found that best available control technology (BART) to reduce NOx emissions is selective non-catalytic reduction (SNCR) and requires the utility to install SNCR on each of its four units. In August 2011, EPA published its Federal Implementation Plan (FIP), which requires installation of selective catalytic reduction (SCR) on all four units within five years of the rule’s effective date of Sept. 21, 2011.

In October 2011, the New Mexico Environment Department (NMED) and New Mexico Gov. Susana Martinez petitioned EPA to issue a stay of the implementation of the federal plan. In September and October 2011, PNM petitioned EPA to issue a stay of the rule. On April 26, Gov. Martinez sent a letter to EPA Administrator Lisa Jackson reiterating the state’s request for a stay and encouraging consideration of alternative approaches.

At the same time, PNM has taken its case to federal court to appeal EPA’s mandate. The governor of New Mexico and the NMED are also in federal court appealing EPA’s decision to adopt a federal plan. The court has not yet ruled on the matter.

San Juan consists of four units operated by Public Service Co. of New Mexico, the parent company noted in its Feb. 29 annual Form 10-K filing. Units 1, 2, 3, and 4 have net rated capacities of 340 MW, 340 MW, 498 MW and 523 MW. Various other power generators own parts of the plant.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.