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Utility: No guarantees on northwest NM power plant

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By Associated Press

FARMINGTON (AP) — An official of the company that runs the coal-fired Four Corners Power Plant near Farmington is offering no guarantees about its future.

Arizona Public Service Co. announced plans last week to close three of the plant's generating units and seek majority ownership of the remaining two units from Southern California Edison.

The utility's vice president for fossil operations, David Hansen, could not give Farmington city councilors any guarantees Tuesday about the two remaining units at the northwestern New Mexico plant.

"There is still the potential for units 4 and 5 to be shut down," Hansen said.

The plant's future rests on the utility reaching an agreement with the Navajo Nation to extend a lease on the reservation and on regulatory approval of a $249 million deal for the company to buy the stake in the remaining units from Southern California Edison.

The lease awaits tribal approval, Hansen said.

The agreement with the tribe expires in 2016. Hansen said if the Navajo Nation does not approve the extension or if regulators block the Southern California Edison deal, the utility would need to begin decommissioning the plant in 2014.

The power plant and the adjacent mine that feeds its generators are among the largest private employers in San Juan County.

Four Corners employs 549 workers, while the Navajo Mine employs 491.

Closing three units at the plant will cost jobs. Hansen said the utility expects the plant to lose about 190 jobs.

BHP Billiton, which operates the Navajo Mine, is evaluating plans, but job losses at the mine could range between 100 and 200 people, spokesman Pat Risner said.

Both companies have said they want to reduce employment through attrition and retirements if possible.

Councilor Jason Sandel said the impact of lost jobs "will be a devastating blow" to the community.

Farmington's economy, heavily dependent on energy, already is suffering from reduced drilling and mining.

The Farmington City Council recently passed a resolution supporting the utility's renewal of the lease with the Navajo Nation.

The resolution says the plant and mine feed millions of dollars into the Navajo Nation and the local community in taxes and royalties. The companies also make large contributions to local community groups. For example, BHP Billiton contributed more than $1 million last year to San Juan United Way.