FARMINGTON — Public Service Company of New Mexico has filed for approval to decommission two of the San Juan Generating Station's coal-burning stacks and install carbon emission reducing technology on the remaining two.
PNM, the company that operates the generating station in Waterflow will lose 340 megawatts with the closure of units two and three.
"Of all the resources that we have available to serve our customers today, (340 megawatts) represents about 14 percent of our total resources to serve our customers," Director of Communications Valerie Smith said.
To recover the lost energy, the company also filed with the state's Public Regulation Commission for approval to add 134 megawatts from the Palo Verde Nuclear Generating Station's unit three, Smith said.
In its filing with the commission, PNM also identified two power sources intended to recover 217 megawatts.
PNM plans to build a natural gas peaking station in San Juan County to generate 177 megawatts, Smith said. The peaking station will generate electricity only during high-demand periods.
PNM also plans to build a utility-scale solar generation station in the county that will produce 40 megawatts, she said.
"Basically, we need all replacement power to come online at the time of the (generating station's two coal-burning stack's) retirement," Smith said.
The company also filed for approval to recover $205 million that had been invested in the two stacks over a 20-year period, she said. PNM plans to file for a rate increase in 2016 or 2017 to recover that money, she said.
Also in the filing, PNM asked the commission to limit the cost of installing emission reducing technology on the two stacks to no more than $82 million, Smith said. The selective non-catalytic reduction technology will be used to reduce the nitrogen-oxide emissions of stacks one and four.
PNM requested a ruling by December 2014, Smith said.
She said PNM's filing is another milestone in its efforts to meet the Environmental Protection Agency's regulations on coal-fired power plant carbon pollution. President Barack Obama in late June directed the EPA to establish the regulations. The generating station and Four Corners Power Plant -- which is on schedule to shutter three of its five coal-burning stacks -- rank among the nation's top carbon polluters.
In September, the New Mexico Environment Department's Environmental Improvement Board approved a "Revised State Implementation Plan," which calls for retiring the generating station's two stacks and upgrading its other two.
State proposals mandate that PNM install the carbon emission reducing technology by early 2016 and retire the two stacks by the end of 2017.