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SJGS carbon capture feasibility study done, but critic thinks plant reopening unfeasible

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FARMINGTON – A study on the feasibility of installing carbon capture technology at the San Juan Generating Station drew criticism from the director of the state’s Sierra Club chapter, who said New Mexico should look forward instead of reaching back into history and resurrecting a closed coal-fired power plant.

Enchant Energy’s comprehensive San Juan Generating Station Carbon Capture Front-End Engineering Design (FEED) Study was released last week. The study, years in the making, was completed in part with funds from the U.S. Department of Energy, and it began under the Trump administration.

Implementation of the plan, however, depends on many factors, not the least of which is the transfer of the power plant to the City of Farmington and Enchant, and then approval by the state Environmental Improvement Board of an air permit transfer, permission to build a carbon capture system and a waiver to let the facility run despite new, tighter emission standards that start in January 2023.

The head of the state’s Air Quality Bureau said she can’t forecast how things would work out, but the process of getting a variance to avoid the rules demanded by the state’s Energy Transition Act would result in a public hearing process and participation by the public.

Enchant Energy happy with study results

“The FEED Study was successful in establishing and defining the technical requirements, scope, schedule, and costing for the project to add carbon capture technology to the San Juan Generating Station,” Enchant Energy’s announcement said in part. “…Once the carbon capture facilities are constructed and fully operational, the plant will be able to operate while capturing 95% of the carbon dioxide emissions that are produced.”

“The FEED Study was extremely successful from an engineering and project management perspective,” Enchant Energy CEO Cindy Crane said in the release. “The study completed enough engineering to update the cost estimate and confirm the schedule for installing carbon capture and storage at the San Juan Generating Station.”

The plan is for carbon dioxide captured at San Juan Generating Station to be permanently stored in underground formations near the plant, but some of it is meant to be sold and sent through a pipeline to Permian Basin firms to help them recover more oil from their wells.

"San Juan Generating Station with carbon capture is positioned to provide reliable low carbon power much sooner than potential nuclear power plant construction and with much lower atmospheric carbon dioxide emissions than natural gas generation without carbon capture," the Enchant release stated.

FEUS electric rates, replacement power at issue

The Farmington Electric Utility System (FEUS) faces big future impacts if the power station does not reopen, according to city spokesperson Georgette Allen.

"FEUS rates were recently approved in April 2022 that kept rates flat for the utility," she said via email. "These rates assumed that SJGS would continue operation, with low cost power being provided as set out in our agreement with Enchant Energy. If we are not successful in SJGS continuing operation, we will need to complete a second cost-of-service study and based on higher purchase power costs in the market, our rates are likely to increase. The timeline for the potential rate changes is dependent on the results of SJGS’s continued operation."

Allen said that the FEUS power generation portfolio "has been 44% gas generation owned and operated by the utility at our Bluffview station, 19% from coal generation from our ownership of SJGS, 15% from hydro generation from our Navajo hydro plant or from firm agreements with Western Area Power Authority (WAPA) for firm electric service, and 22% from purchased power."

If the power from SJGS is lost, the utility must shop in the volatile open market to fill the gap and keep the lights on until a new source of electricity generation is built or long-term purchase power agreements are reached, she said.

"The top-ranked portfolios in our recently approved integrated resource plan have the utility building dispatchable generation and solar in the short term," Allen said.

State approvals needed before SJGS can open

Any move toward reopening the generating station will require state approvals, as well as the consent of several plant owners to turn the whole facility over to part owner the City of Farmington and Enchant.

That is currently in the arbitration process, and apparently the process is not moving quickly.

"There is not a set start date as the two picked arbitrators are working on agreeing to a third arbitrator," Allen's Nov. 16 email stated. "We are currently working with the State to figure out a path forward on the air permit and a potential waiver."

Sierra Club leader opposes reopening

Part of that permitting process would be public hearings, and several groups that oppose the plant's reopening have already issued positions celebrating the plant’s September 2022 closure. The head of one such group took a dim view of the latest study and the effort to reopen the plant.

"The NM Environmental Improvement Board just adopted limits on CO2 emissions that go into effect in 2023, as called for by the landmark 2019 Energy Transition Act,” said Sierra Club: Rio Grande Chapter Director Camilla Feibelman.

“Enchant has not said how it will comply with the ETA's CO2 limit until carbon capture can be installed,” Feibelman noted. “In addition, the CCS proposal will do nothing to reduce the enormous environmental damage from the San Juan coal plant and mine, including NOx pollution that contributes to smog, methane from coal mining, and toxic coal ash.”

Aside from the environmental aspects, Feibelman said the project’s basic viability seems shaky, particularly in the face of unanswered questions and uncertain outcomes.

“And questions remain about who will invest in this plant, take on the liability for it, how any electricity would be transmitted and who would even buy it,” Feibelman said. “We've got to be building an economic future based on reality, not on an ever devolving timeline."

A public process awaits

The process of transferring the plant’s air permit is an administrative task, but the issues of installing new carbon capture technology — and running the plant without it for a while — opens up a lengthy process.

Once they have the permit, it would have to be revised “to seek authorization to construct a carbon capture system,” Air Quality Bureau Chief Liz Kuehn said, “and it will likely be challenged by stakeholder groups.”

The amended permit could take at least a year to process, she told The Daily Times.

The other prong is the variance needed to the ETA’s stricter air emission standards for the plant, rules adopted just this year by the air board which go into effect in January.

Seeking that variance starts with a proposal to the state by the city and Enchant, followed by Air Quality Bureau Chief Kuehn’s recommendation to the bureau’s Environmental Improvement Board, and then a public hearing and a board vote,

“I cannot predict the outcome of the board,” she said, should the matter go for formal consideration.

That’s in part because the regulatory guidelines are strict and, she noted, “fairly limited.”

“It doesn’t have a guaranteed success, given the guardrails,” Kuehn said.

Enchant news release strikes a positive tone

Despite the potentially winding road to permit acquisition and expected opposition from environmental groups, the tone of Enchant’s announcement about the FEED Study was optimistic.

“The results of the FEED Study are very positive,” Farmington Mayor Nate Duckett said in the release. “Successfully completing the FEED Study is an important step for the carbon capture project at San Juan Generating Station that will enable the plant to resume operation and provide reliable cost-effective electric power to the customers of the Farmington Electric Utility System.”

The release describes the “core technology” for the plant’s carbon capture system as “a proprietary amine‐based solvent carbon dioxide capture system developed by Mitsubishi Heavy Industries America, Inc., (MHIA).” 

The now-closed Petra Nova Plant in Texas utilized an earlier version of the same type of technology back in 2016 “on a slipstream from a coal-fired boiler,” the release stated.

“We are extremely pleased that our technology has been able to be successfully integrated into the FEED Study for adding carbon capture to the San Juan Generating Station,” MHIA’s Senior Vice President – Engineered Systems Division Timothy Thomas said in the release. “There is building momentum for carbon capture technology as a way for countries across the world to address the need for reliable electricity generation in an environmentally friendly manner.”

Some celebrated San Juan Generating Station closure

As the San Juan Generating Station burned the last of its coal supply in late September, the Boulder, Colorado-based advocacy group Western Resource Advocates was coordinating responses from some of the groups that fought to close the power plant.

“The plant closure has significant positive and negative implications. One positive impact is the anticipated release of ETA funds to help secure the self-sustenance of communities that were impacted by the plant,” Duane “Chili” Yazzie of ToohBAA, the Shiprock Traditional Farmer Cooperative, said in the September press release. “Our farmers group in Shiprock applied for the funds in the hope that it will help address one of the great needs that our farmers have, with the provision of skilled labor. With the funds, we expect to acquire equipment operators, diesel mechanics, planners and administrators who will help organize our farming activity to optimize our agricultural potential. We look forward to an expedited release of those funds.”

Site reclamation and cleanup is also the goal of some community members as the plant is decommissioned.  Water rights are another issue of concern to some, as the San Juan Generating Station was a major water user, but the release noted that “some of the water rights from the plant have now been allocated to run in the San Juan River.”

“We now have an opportunity to protect and manage water sources in the Four Corners region,” said Jessica Keetso of Tó Nizhóni Aní, Navajo Nation. “A transition to solar, wind, renewable, clean-energy investments helps eliminate the waste and misuse of water. Precious water sources have been used to feed giant power plants all over the Four Corners region for over half a century. These water sources are limited and have been compromised in many regions. It’s time to make sure that transition and cleanup happen in an organized and speedy manner, and that ETA investments bring an opportunity for coal-impacted communities to drive economic diversification.”

Another group spoke out in September in favor of replacement power supplies being established and utilization of cash set aside for workers transitioning away from coal jobs.

“As Four Corners residents, we want to see the negotiated replacement power, solar and energy storage, and we want the ETA implementation money to go to the impacted coal workers and communities,” Mike Eisenfeld of San Juan Citizens Alliance said in the Western Resource Advocates release. “Enchant Energy has been disingenuous and unaccountable on the progress of their project, which joins a long list of failed carbon-capture and sequestration projects funded through the Department of Energy.”

Plant backers also weighed in

As some cheered the demise of the power plant, others noted the loss of a local employer would have serious impacts, and praised the efforts of the city and Enchant to save local jobs.

Four Corners Economic Development reiterated its support on Sept 30 of the Farmington/Enchant takeover of SJGS.

 “4CED strongly supports the City of Farmington and Enchant Energy in their efforts to retrofit SJGS with carbon capture technology,” the group said in its newsletter. “The retrofit project would mean hundreds of high-wage jobs and well over a $1 billion investment in the local economy and property tax base.”

New Mexico House of Representatives Minority Leader Jim Townsend used the station’s shutdown as a fundraising opportunity in a Sept 30 email.

State Senator Bill Sharer (R-District 1) representing San Juan County also weighed in, authoring a commentary on the plant’s closure and Gov. Michelle Lujan Grisham’s role in that. He called on the governor to reverse course and help reopen the plant with carbon capture technology.

“Enchant Energy stands ready to build a state-of-the-art facility that removes 95% of the CO2 generated by the power plant,” Sharer wrote in part. “Today, every other pollutant is already captured and kept out of the environment. We could have had the cleanest coal-fired power plant in the world.

“Instead, the Governor’s political allies came in and disparaged the solution. They called carbon capture 'non-viable' and called Enchant 'investors with no experience.' Today, instead of a state-of-the-art facility, we have a ghost town.”

Petra Nova plant interest sold

The SJGS shutdown, and a legal battle over future use of the power plant between Farmington and the plant’s other owners, are happening as a project held up as an example of a working carbon capture facility was sold off at a low price to a Japanese firm that helped build it.

A U.S. company this fall sold its interest in the closed coal-fired Petra Nova plant that many said exemplifies a working carbon capture facility at a bargain price.

NRG Energy Inc., a stakeholder in the Texas plant that installed carbon capture technology on a large scale but had to shut down due to economics, sold its portion of the $1 billion facility for $3.6 million to the Japanese business partner that helped it build the plant.

JX Nippon Oil & Gas Exploration Corp. announced plans to acquire NRG Energy Inc.'s half ownership in the plant, making the buyer the only owner, via a press release from attorneys Hogan Lovells US LLP, who represented the buyer.