Public Service Company of New Mexico (PNM) said Sept. 30 the last unit at its coal-fired San Juan Generating Station has officially been removed from service.

The shutdown of Unit 4 follows the retirement of Unit 1 in June 2022. The San Juan plant, located in Farmington, New Mexico, had four units but was reduced to two in 2017, with the closure of Units 2 and 3. The plant’s first unit was brought online in 1973.

The plant’s closure could be the end of a proposal to equip San Juan with carbon capture and sequestration (CCS). Along with Enchant Energy, the city of Farmington has been working to keep the plant open for such a project. Farmington said CCS could remove 95% of carbon dioxide from San Juan’s emissions. 

On Sept. 21 the city filed a complaint for declaratory judgment and coercive relief against PNM and other San Juan co-owners.

Farmington claims it has the right under a 2017 agreement to acquire PNM’s and other exiting owners’ interests in the plant. If all owners but one decide to exit from the plant, the agreement requires that plant assets be conveyed to the last remaining owner. 

PNM is the plant’s majority owner, while Farmington owns a 5% stake.

The city said it has initiated negotiations to work out an orderly transfer of plant assets once the other owners exited.

Efforts to negotiate with PNM and other exiting owners to transfer the plant to Farmington have not been productive, said a city of Farmington spokesperson. According to the Farmington Daily Times, sticking point issues include who should be liable for decommissioning and the environmental clean-up of the plant if the facility were to change hands.

“In August 2022, Defendants terminated any negotiations, and they have since declared their intention to close the San Juan Generating Station beginning in September 2022,” the spokesperson said.

Added Farmington Mayor Nate Duckett: “Our community surely deserves more than PNM and the other owners playing hide-the-ball with these negotiations.  We go to the mat for our community – and, unfortunately, the actions of PNM and the other exiting owners are forcing us to enforce our rights by initiating litigation to do just that.”

PNM has not responded to a request for comment. Last month the utility told the Daily Times it is required to file a demolition plan with San Juan County within 90 days of closing the plant — work that was already being planned out.

PNM says with San Juan’s closure, coal-fired generation now makes up less than 10% of its resource capacity. The utility plans to replace San Juan with a mix of natural gas, wind, solar and battery storage, with the goal of eliminating CO2 emissions from its generation portfolio by 2040.

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