Sierra Club: Farmington decision shows uncertainty for San Juan coal plant

The Sierra Club said Jan. 14 that a news report shows that Farmington Electric Utility System has abandoned its plans to acquire a larger portion of the coal-fired San Juan Generating Station (SJGS) once two of the plant’s units retire in 2017.

Farmington’s acquisition of additional power from the plant was part of a plan to help stabilize ownership of the plant after four other owners announced their intent to exit the plant in 2017, the club noted. Farmington’s decision to not increase its ownership at SJGS comes at a critical time when Public Service Co. of New Mexico (PNM), the operator and largest owner of the plant, is before the state Public Regulation Commission putting forth a plan that will keep the plant running well beyond 2017. The commission is in the midst of hearings on that plan that began on Jan. 5 and will end on Jan. 16.

Farmington currently has 43 MW of the capacity at the plant and was looking to add another 65 MW. As reported in the Santa Fe New Mexican, the Farmington utility told PNM in a Jan. 7 letter that it wasn’t going to buy the additional capacity due to unresolved issues, including the “significant degradation in [San Juan] Unit 4 reliability performance, uncertainty and likely unfavorable economics regarding future fuel supply, uncertainty pertaining to operations and ownership structure post-2022 and other evaluated liabilities unacceptable to the city.”

In response, Nellis Kennedy-Howard, Senior Representative for the Sierra Club’s Beyond Coal to Clean Energy campaign, said in a Jan. 14 statement: “Here in New Mexico and across the country, coal is on its way out and our state deserves a plan for a healthy transition to clean energy. Farmington’s plans to abandon its efforts to acquire an increased portion of the SJGS demonstrates just how risky coal is and should send a warning sign to other owners 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.