FARMINGTON — The U.S. Environmental Protection Agency has proposed approving the state of New Mexico's plan to reduce haze-causing emissions from San Juan Generating Station, which could save the utility more than $900 million in emission controls.

The EPA, the state of New Mexico and the Public Service Company of New Mexico, the majority owners of the plant, worked to develop an alternative to a federal plan the utility said would have cost about $1 billion.

The state plan calls for the generating station to retire units two and three and install selective non-catalytic reduction technology to reduce nitrogen oxide emissions from units one and four. Installing the technology to the two units is expected to cost about $60 to $80 million, the utility officials have stated.

"We are very pleased with EPA's announcement proposing approval of the state plan for San Juan Generating Station," said Ron Talbot, senior vice president and chief operating officer at PNM, in a prepared statement.

He added he expects the agency to approve the plan in the fall.

"We are committed to working with our state partners to improve visibility and reduce pollution," said EPA Regional Administrator Ron Curry in a release. "Pollution, especially air pollution, has no geographical boundaries. We are pleased to propose approval of the State of New Mexico's plan."

In addition to reducing emissions, PNM also has stated it will not lay off any company employees as they retire the two units and will create about 350 construction jobs, build a 177-megawatt natural-gas power generator and continue contributing money the PNM-Navajo Nation Workforce Training Initiative.

San Juan Generating Station currently employs nearly 400 workers.

"I am pleased the EPA concurs that this settlement agreement is the best solution to balance the environmental and economic impacts of energy production in the Four Corners," said Gov. Susana Martinez in a press release.

She added the agreement conserves water, protects jobs and avoids a potentially high rate hike for PNM customers.

Once the proposal is published in the Federal Registry, a 30-day public comment period will begin.

EPA officials could not be reached for comment on when they expect the proposal to be published. Valerie Smith, a PNM spokeswoman, said the company expects the proposal to be on the Federal Register in a few days.

Mike Eisenfeld, San Juan Citizens Alliance staff organizer, said his organization expected the state's plan to be submitted for approval, and his group plans to file comments with the Federal Register once the document becomes available.

"We're part of the ongoing legal process. I'm sure that we'll submit legal comments," he said.

PNM is also still seeking approval from the New Mexico Public Regulations Commission to decommission the two units.

Erny Zah is The Daily Times business editor. He can be reached at 505-564-4638.and Follow him @ernyzah on Twitter.