FARMINGTON — Two stacks at San Juan Generating Station are likely to remain part of the San Juan County skyline for years to come.

The New Mexico Environment Department's Environmental Improvement Board on Thursday unanimously approved an alternative plan for the future of the generating station. The board gave its approval to a tentative agreement that was already reached between Public Service Company of New Mexico, the U.S. Environmental Protection Agency and the state concerning the power plant. PNM is the utility company that operates the generating station, which is in Waterflow.

At center, John Volkerding, with the State of New Mexico, Environmental Improvement Board, asks questions during a meeting Thursday at San Juan College in
At center, John Volkerding, with the State of New Mexico, Environmental Improvement Board, asks questions during a meeting Thursday at San Juan College in Farmington. (Jon Austria The Daily Times)

The plan calls for the generating station to retire units two and three and install selective non-catalytic reduction technology, which are intended to reduce nitrogen oxide emissions, to units one and four. Installing the technology to the two units will cost an estimated $60 to $80 million, said Ron Darnell, PNM's vice president of public policy.

"It is one step in a long process. But it provides a little more certainty that San Juan Generating Station will be operable. There are two units that will remain in service and (the Environmental Improvement Board's vote) provides more certainty as to when the other two units will be retired," Darnell said. "It provides certainty that PNM will continue to be in coal."

The alternative plan was reached after the EPA mandated that the generating station install selective catalytic reduction technology on all four units. PNM officials said that could have cost nearly $1 billion. They said that would have been too high of a burden on PNM's rate payers, and the plant would have had to close.

In addition to decommissioning two units and adding selective non-catalytic reduction technology to two units, PNM also said it will not lay off employees and will donate $1 million to the PNM-Navajo Nation Workforce training initiative and $150,000 to the Four Corners Economic Development.

PNM also said it will build a natural gas fired peaking plant, which will only operate when energy is in high demand.

"PNM is fully invested in the Four Corners," said Pahl Shipley, project manager for PNM Resources. "We're not going anywhere, as long as everything goes to plan."

Darnell said there are signs the EPA will approve the agreement the board approved Thursday. He said the EPA already tentatively agreed to the plan, and EPA officials have lauded the negotiating process between the utility company, the state and the federal environmental agency.

The Environmental Improvement Board meeting, which was held at San Juan College, lasted all day Thursday. In addition to detailed testimony about the plan from officials and attorneys with PNM and the environment department, about a dozen members of the public endorsed the plan during public comment periods.

"It's a choice between unpalatable options," said Steve Henke, the president of the New Mexico Oil and Gas Association, which endorsed the state's plan. "The rate payers will ultimately absorb the impact, but the state's plan minimizes that impact to rate payers."

Navajo Nation President Ben Shelly, several Navajo Nation chapter presidents and New Mexico Rep. Sharon Clahchischilliage, R-Kirtland, whose district includes the generating station, spoke in favor of the state plan during the meeting. Many of the Navajo officials said Navajos need the high-paying jobs at the generating station and the mine that supports it.

"One of the greatest strengths of our community is that we are near this great economic opportunity in San Juan County," said James Pioche, the president of the Tse Daa K'aan Chapter, which is west of the generating station. "Many of our members work at the San Juan Generating Station and the Four Corners Power Plant. We prefer that all units stay open but we understand compromise. Compromise is important so there is certainty in the future."

Ryan Boetel covers crime for The Daily Times. He can be reached at 505-564-4644 and Follow him on Twitter @rboetel on Twitter.