PNM employees prepare for San Juan Generating Station closure

The coal-fired San Juan Generation Station outside of Farmington

WATERFLOW – The skeletons of two units at the San Juan Generating Station remain standing – a stark reminder of what could happen to the remaining units in less than three years.

Walking through the generating station, a line of pulverizers that once crushed coal for unit three are now empty and opened for safety reasons.

Two smoke stacks no longer puff out water vapor and emissions, but they are framed by the two remaining smoke stacks.

The employees walking through the coal plant, riding bikes to get from one area to another, operating equipment or sitting at desks in the control room all know that their jobs may end on June 30, 2022, when the coal supply contract with Westmoreland Coal Company expires.

Derek Bailey, an operations supervisor, said he has not yet thought about what he would do if the plant closes in 2022 and has not decided if he would stay on after 2022 if it remains open.

“At this point in time, I’m not too concerned,” Bailey said. “I’m not losing sleep yet.”

He said he was nervous when he first heard the news that the plant could close about two years ago, but then he realized the closure is still years away.

While San Juan Generating Station has traditionally had a low turnover rate, with many employees starting and ending their careers at the power plant, some employees have already left in anticipation of a 2022 closure.

“A lot of people that are leaving San Juan today ended up in good places,” said Plant Manager Omni Warner.

Some are now working at Hilcorp, switching from coal to natural gas. Others have gotten similar jobs across the river at Four Corners Power Plant.

PNM spokesperson Raymond Sandoval said the utility does not know exactly how many employees will be searching for jobs if the power plant closes in 2022. When PNM closed two units a few years ago, it did not lay off any employees because there had been enough attrition.

Warner said the attrition rate has been faster than anticipated the last couple of years.

Last year, 25 employees left, either for other jobs or to retire. He said there have been about the same number of employees leaving this year, and San Juan Generating Station hasn’t hired new employees for three years.

Warner said PNM may need to contract with outside sources for some of the operations if enough people leave.

For those who will be losing their jobs, the Energy Transition Act passed after PNM announced plans to close the power plant includes money for training and severance packages.

But there is a chance the New Mexico Public Regulation Commission will not apply the Energy Transition Act to the case and, if that decision is held up by the New Mexico Supreme Court, there could be less money available for training and severance.

Not applying the Energy Transition Act will also impact mine workers and the community. That is because the new law allowed PNM to refinance its investments into the power plant and required some of the money from the refinancing be set aside to assist impacted workers and communities.

Sandoval said PNM will leave its share of the power plant regardless of what happens with the Energy Transition Act.

Workers have varying interests for future employment

Plant Manager Omni Warner said between 80 and 90 employees will have the ability to retire in 2022.

“For the rest of the employees, though, they’re going to have to go find some other form of employment,” Warner said.

San Juan College and PNM have partnered for training programs to assist the workers and have talked about training for the renewable energy field.

Warner said there are many employees who plan on leaving the energy industry once the power plant shuts down.

Not every one of the 220 employees at the power plant will have to leave the San Juan Generating Station at the end of June 2022. Sandoval said about 50 employees will be needed to decommission the power plant.

And decommissioning will also create a need for a different, specialized workforce. If the plant does close in 2022, contractors will likely assist with decommissioning and reclamation. It will take several years to fully decommission and reclaim the power plant.

The exact details of what the decommissioning and reclamation will entail has not yet been determined. It will need to be negotiated with all of the plant owners and one owner, the City of Farmington, is working on an alternative that would keep the San Juan Generating Station open.

Unlike PNM, Farmington Electric Utility System is not able to refinance its investment into the power plant using the Energy Transition Act. This is because Farmington is not regulated by the New Mexico Public Regulation Commission. Farmington Electric Utility System will lose millions of dollars of investment into the facility while also having to pay millions of dollars to replace the power generation it will lose.

The impacts to the local economy and the electric utility prompted the City of Farmington to partner with Enchant Energy in an attempt to keep the power plant open.

While the city and Enchant Energy are optimistic that carbon capture technology can work to keep the plant operating, they must still clear several hurdles, including finding investors and negotiating the transfer of ownership.

Sandoval said there have not yet been formal negotiations about the transfer of ownership.

On top of the loss of jobs in San Juan County, closing the power plant means less property tax revenue for San Juan County, Central Consolidated School District and San Juan College – as well as the state.

Both Central Consolidated School District and the San Juan County legislative delegation filed to intervene in the PRC case on Sept. 24. “The abandonment of the SJGS will inevitably affect the economic health and well-being of San Juan County and its residents,” the legislative delegation stated in its motion to intervene.

But the power plant is not the only place that could be closing in 2022. If the power plant does close, the neighboring San Juan Mine will likely also close.

That means hundreds of mine workers could face job loss. And those jobs will be impacted much sooner than the San Juan Generating Station jobs. Some could be laid off as early as next summer as PNM reduces the amount of coal it receives from the mine.

Like the power plant, work will continue at the mine even after 2022. It will take years for the mine to be fully reclaimed. However, like the power plant, it takes fewer employees to reclaim the mine than it does to operate the mine.

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