FARMINGTON – State regulators repealed one of New Mexico’s two carbon cap-and-trade laws Feb. 6, and Farmington electric utility officials are hoping the second one will be repealed in March.
If so, it could mean a new natural gas power plant for the area, which would provide more power and an increase in revenue for the city.
In 2008, officials began planning a new natural gas plant before New Mexico became one of only a handful of states to pass strict carbon cap laws.
“Both of those rules required greenhouse gas reductions,” said Farmington Electric Utility Director Maude Grantham-Richards. “The only way to reduce emissions is to burn less gas. Every year it decreases.”
The laws required power plants to reduce the amount of carbon dioxide released per megawatt hour by 3 percent per year. This level of reduction quickly would put any new power plant out of compliance.
Because the city would seek bonds for at least part of the plant, and bonds typically are issued for 20 years or longer, building a new natural gas plant under the old carbon cap regulations would be fiscally irresponsible, officials say.
“Based on the reduction’s starting point, the plant would no longer meet requirements within eight years,” Grantham-Richards said. “That would mean we would have to start reducing capacity or buying carbon offsets.”
Buying offsets would mean an increase in what people pay for electricity.
“We are committed to keeping our customers’ power bills as low as possible,” Grantham-Richards said.
There are some definite bonuses to pursuing natural gas.
“There are a lot of reasons to use natural gas as far as the environment,” said Mike Sims, the electric system’s generation and system control manager. “It’s cleaner burning and has half the carbon dioxide footprint of coal. It also uses less water.”
The San Juan Basin has one of the largest deposits of natural gas in the country, and the infrastructure for retrieving and transporting it already is in place.
— This article appeared on page B1 of the Albuquerque Journal
