San Juan plant deal hangs in the balance

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DPU > Plan for reducing haze from power plant has tentative EPA nod

By Arin McKenna

The headline on last month’s press release from the New Mexico Environment Department was triumphant. It announced in bold print that “Governor Martinez brokers settlement agreement with PNM and EPA over regional haze.”

But while Department of Public Utilities Manager John Arrowsmith concedes that “all the parties appear to be satisfied with the settlement” for improving air quality at the San Juan Generating Station, he has some trepidation about the non-binding agreement.

Los Alamos County owns a 7.2 percent share of the generating station’s unit 4, which provides approximately 50 percent of the electricity requirements for Los Alamos County.

Martinez directed NMED to negotiate with the Environmental Protection Agency and PNM after the EPA rejected the state’s first proposal to improve air quality at the plant.

The EPA’s Federal Implementation Plan for reducing regional haze required PNM to install select catalytic reduction technology on all four units of the San Juan Generating Station within five years. EPA’s estimate for installing the units was $350 million. PNM insisted the upgrade would cost $750 million. The state’s press release put the cost at $850 million.

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