New Mexico's PNM Shutters Two Units at San Juan Generating Station

---

Researched by Industrial Info Resources (Sugar Land, Texas)--As part of a 2015 agreement with state and federal regulators to reduce pollution in the Four Corners region of the U.S., PNM Resources Incorporated (NYSE:PNM) Albuquerque, New Mexico) has shut down two of its four coal-fired power units at the San Juan Generating Station near Farmington, New Mexico. The remaining two units could close as early as 2022, plant officials have said.

The Four Corners region includes the northeastern corner of Arizona, southwestern corner of Colorado, northwestern corner of New Mexico and southeastern corner of Utah. Located about 15 miles west of Farmington, the San Juan Station committed to closing two of its units in a 2015 agreement with majority owner, New Mexico Public Regulation Commission (PRC) (Santa Fe, New Mexico), and the U.S. Environmental Protection Agency (EPA) (Washington, D.C.) in order to comply with federal haze regulations mandated by the Clean Air Act. The agreement required the plant to shutter units 2 and 3 by December 31, allowing time for PNM to prepare for the closure in terms of employment. Retiring the two units will effectively reduce the generating station's emissions, including carbon dioxide, as well as its use of coal and water, by about 50%, according to PNM officials.

"This agreement is the result of a strong collaboration among many parties, each of whom worked to find a solution in the best interests of New Mexicans," said PNM Resources Chief Executive Pat Vincent-Collawn. "As we look ahead, there will be more challenges to face and tough decisions to make. The best way to achieve our shared vision of a clean, sustainable energy future will be to continue to work together."

Plant operators said both units were idled a few days earlier than planned because of mechanical problems, and PNM, which has about 2,791 megawatts (MW) of generation capacity in New Mexico and Texas, said "it would have been uneconomical to repair the units given the fact that they were scheduled to be shut down in the near future." The 534-MW Unit 3 was taken offline on December 19, and operations ceased at the 350-MW Unit 2 a day later. Crews will now begin cleaning out the units and completing other procedures to permanently retire them from service.

Plant officials plan to retire the remaining units before the end of 2022. Internal review and analysis by PNM showed that retiring the rest of the coal-fired plant and relying on natural gas and nuclear power "would be more of a cost benefit for customers" than continuing with coal, primarily because market prices and trends. For more information, see the September 11, 2017, article - PNM: Going Coal-free Will Save Money for Customers.

Unit 2 entered service when the plant opened in 1973 and is the oldest unit at San Juan. Unit 3 came online in 1979. The shutdown of the two facilities will result in an energy-generation loss of around 836 MW, and PNM said it plans to replace that loss with a diverse mix of increased natural gas, existing nuclear power and renewable-energy generation.

Click on the image at right for a graph showing PNM's current energy mix.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle TM, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com