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San Juan County Coal Industry in Jeopardy

8/1/2017

4CED Announces Plans Regarding Integrated Resource Plan Protest Period

Four Corners Economic Development (4CED), the City of Farmington (Farmington) and San Juan County (County) today announced that they will not file protests to the Public Service Company of New Mexico’s (PNM’s) 2017 Integrated Resource Plan (IRP) recently filed with the New Mexico Public Regulation Commission (NMPRC).  The key issue in PNM’s IRP filing for the Four Corners’ region is the proposed closure of the San Juan Generating Station (SJGS) in 2022.

The NMPRC’s IRP process as it currently stands is narrowly focused on least-cost future methods for providing electricity. As such, instead of protesting the IRP filing, 4CED, Farmington and the County will work to collaborate with the State of New Mexico, New Mexico legislators and others to develop a “soft landing” strategy to extend the life of the plant in order to minimize the negative economic consequences of the eventual closure of SJGS.

“Closure of SJGS will have a profoundly negative impact on the regional economy of the Four Corners,” said 4CED CEO, Warren Unsicker. “There will be a loss of at least 657 direct jobs at the San Juan Generating Station and the San Juan Coal Company, along with an additional 925 indirect jobs that are related to the plant and mine.”

The impacts of closing SJGS will be widely felt by the citizens of the State of New Mexico and San Juan County.  Closure will significantly reduce property tax receipts, gross receipts taxes, and eliminate all mineral production taxes related to coal used by the plant.  The result will be lower tax revenues to the State and reduced funding for San Juan County, its communities, San Juan College and area public schools.

The communities of San Juan County are also suffering from the economic impacts of historically low natural gas and oil prices.

Customers of the Farmington Electric Utility System (FEUS), owned by the City of Farmington, will also be negatively impacted by the SJGS closure.  FEUS owns 8.475% of SJGS Unit 4, which is 22% of the utility’s total generating resource base.

Early closure of SJGS will force FEUS to acquire expensive new replacement generating capacity with no clear way forward to recover its customer’s substantial investment in the SJGS plant, which has been upgraded to be fully compliant with stringent EPA regulations and the Clean Power Plan. The 45,000 FEUS customers in San Juan County and a small portion of Rio Arriba County will subsequently experience large electric rate increases associated with this new capacity. This will also affect future business recruitment efforts in the region as its low-cost power competitiveness will disappear.

“SJGS has played an important role in the regional economy for decades.  Farmington’s decision to not protest PNM’s IRP filing should not imply that we agree with all of its conclusions,” said Farmington Mayor, Tommy Roberts. “We look forward to working with PNM and all interested parties to find ways for SJGS to operate well beyond 2022.”

For more details on the IRP: Click Here

Economic Modeling Specialists, Intl. (EMSI) Impact Study: Click Here

Past Real People Real Jobs Campaign Successes:

San Juan Generating Station Case