Officials mull options as San Juan Generating Station closure looms
Plant majority owner committed to decreasing work force through attrition, spokesman says
- Two of the San Juan Generating Station's four coal-fired power units were shuttered earlier this week.
- Plans to close the remaining two units by the end of 2022 are awaiting state approval.
- The community had time to prepare for the partial closure, which was announced in 2015.
FARMINGTON — The San Juan Generating Station, a significant employer in the Four Corners region for many years, shut down two of its four coal-fired power units this week in a move that the plant and the community have been preparing for since 2015.
The station, located about 15 miles west of Farmington, committed to closing two of its units in a 2015 agreement with the New Mexico Public Regulation Commission and the U.S. Environmental Protection Agency in order to comply with federal haze regulations set by the Clean Air Act, according to Dan Ware, spokesman for majority owner the Public Service Company of New Mexico.
The agreement required the plant to shut down units 2 and 3 by Dec. 31, which gave PNM time to prepare for the closure in terms of employment, Ware said. No plant employees will be laid off because of this week’s closures.
“That was part of the agreement that we made with the state and the EPA — that there were no layoffs associated with this plan (to shut down units 2 and 3),” Ware said.
Plant officials have plans to retire the remaining units before the end of 2022. Internal review and analysis by PNM showed that retiring the rest of the coal-fired plant and relying on natural gas and nuclear power “would be more of a cost benefit for customers” than continuing with coal, primarily because market prices and trends, Ware said.
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Ware said the retirement plan for those units is not finalized yet. PMN submitted plans to the PRC for approval in July.
The closure may affect other companies in the region. The Westmoreland Coal Co. is an Englewood, Colo.-based mining company that operates 17 coal mines in North America, including the San Juan Mine, which is the sole supplier of coal for the San Juan Generating Station. Though Westmoreland did not respond to requests for comment, Warren Unsicker, CEO of Four Corners Economic Development, said Westmoreland “did have some reductions earlier in the year in preparation” for the partial closure.
For the most part, the Four Corners community has seen the closure coming and has been able to respond, Unsicker said.
“This has been something that’s been planned for a while now, so it wasn’t necessarily a shock,” Unsicker said. “… While it is obviously not ideal, this was a planned reduction and a planned shutdown that both the mine and the plant have been working towards over the last year or so."
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Ware said PNM is working with state legislators, local officials and community groups to help mitigate the impact of the plant’s retirement. Though he couldn’t share any upcoming plans, Ware said PNM has made efforts to help educate members of the plant's workforce, many of whom are also members of the Navajo Nation, through the PNM-Navajo Nation Workforce Training Program.
Unsicker said there likely won’t be a single company, field or industry that will replace the coal industry in Four Corners, which long has been a source of economic stability in a region that relies heavily on the volatile oil and gas industry.
“There aren’t a lot of one-to-one matches for the skills sets and the job levels that are currently in the power generating station or of that magnitude, so we really look toward diversification and creation of jobs in industry sectors that are either separate from or not affected by energy markets,” Unsicker said.
Local leaders in government, business and economics are eyeing a number of potential industries to attract to the area to fill the void created not only from the coal plant’s retirement, but from a slump in the oil and gas industry. Unsicker said ideas being considered include agriculture, manufacturing, outdoors and adventure tourism, and server farms or technology infrastructure.
“It’s not all doom and gloom,” Unsicker said. “We have a lot of potential here in the Four Corners region and a lot of assets that we are just not fully tapping at this point. It’s going to be in part attraction of businesses, but also growth of businesses here in the community — entrepreneurs that are willing to look at potential opportunities and take a risk and hopefully create jobs not only for themselves, but for the community as a whole.”
Megan Petersen covers business and education for The Daily Times. Reach her at 505-564-4621 or mpetersen@daily-times.com.