For many reasons, coal remains the nation’s most-used resource for generating electricity.

 

U.S. produced coal is one of the cheapest fuels, and coal plants provide extremely reliable power available when customers need it. PNM customers have benefitted from the low cost and dependability of coal generation for many decades, primarily from the San Juan Generating Station near Farmington, New Mexico. PNM operates and is a partial owner of the plant.

PNM has invested hundreds of millions of dollars in technology that dramatically reduces emissions from the plant. The plant meets or is below government permitted levels of emissions including nitrogen oxide, sulfur dioxide, particulate matter, and mercury.

You might have seen news accounts of our plan to shut two of the four coal-fired generation units at our San Juan Generation Station (SJGS) by the end of 2017. We made this agreement, working closely with state and federal environmental officials, as part of an overall plan to reduce haze-causing emissions in the region.

The New Mexico Public Regulation Commission approved the agreement Dec. 16, 2015, for SJGS. The agreement between PNM and various parties will result in the closure of two of the four coal-fired units at SJGS by Dec. 31, 2017, the installation of emissions control technology on the remaining units and other environmental and customer benefits to address compliance with federal visibility regulations under the Clean Air Act. The approval also allows for significant customer savings thanks to a new coal supply contract with Westmoreland Coal Company.

The approved agreement will also aid New Mexico’s ability to comply with the EPA’s Clean Power Plan, which imposes limits on carbon emissions. The closure of SJGS Units 2 and 3 and the installation of the Selective Non-Catalytic Reduction equipment on the remaining two units are expected to reduce water use and seven different emissions (including carbon) at SJGS by approximately 50 percent. PNM will replace the retired generation capacity with solar, low-emission natural gas and existing zero-emission nuclear power.

 

What Does It Cost?

PNM’s plan minimizes the impact on customer prices while maximizing the environmental benefits. In addition, the PNM plan would take New Mexico a long way toward compliance with the federal Clean Power Plan to reduce greenhouse gas emissions. In total, this will result in 36.5 percent less coal capacity in the PNM generation portfolio.