The ground shook west of Kirtland on Saturday as an explosion echoed along the bluffs. The towers of the San Juan Generating Station that have been a prominent landmark in the area since the 1970s and 1980s crumbled and fell. 

The coal-fired power plant has, in many ways, become a potent symbol of the energy transition in New Mexico.

In 2010, the majority owner of the power plant, Public Service Company of New Mexico, received 40 percent of its electricity from two coal-fired power plants in the northwest corner of the state, a percentage that dropped throughout the years.

By 2015, that had reduced to 35 percent.

Then, in 2017, two of the four units at the power plant closed as part of an effort to reduce emissions from the plant. 

By 2020, PNM was receiving 27 percent of its electricity from coal. 

Next year, the utility anticipates only five percent of its power will come from coal. Meanwhile, renewable energy sources like wind and solar, which were virtually absent from PNM’s resource portfolio in 2010, will likely make up more than half of its generation in 2025.

This transition to renewable energy comes with its own set of challenges.

Kelsey Martinez is the chief of staff and former director of regional markets for PNM. She spoke about some of these challenges during a media event Thursday in Albuquerque.

Martinez outlined how the transition to more intermittent sources of power like solar and wind has led to a greater need for coordination with other utilities in the western United States as well as in parts of Canada and Mexico that are connected to PNM’s system through the grid.

This increase in renewable energy on the grid is leading toward more interconnected operations and regional markets.

Western Energy Imbalance Market

In 2021, PNM joined what is known as the Western Energy Imbalance Market. This changed how PNM works with other utilities if there is a shortage or surplus of electricity on PNM’s systems.

In the past, PNM engaged primarily in bilateral trades in which the company would contact another utility to buy or sell electricity.

Now a computer system evaluates supply and demand for electricity on participating utilities throughout the western United States. An algorithm determines what the most cost efficient and  reliable method is for meeting that demand. 

While this has become increasingly important for PNM, it still has its limitations. For example, the energy imbalance market does not optimize transmission or provide plans a day in advance.

PNM is working toward more advanced planning and looking for better ways to coordinate with regional utilities.

Regional coordination including regional transmission organizations—-which work together to optimize transmission of electricity—-is not new for electric utilities. Some parts of the country have had their utilities working closely together for a while now. 

In New Mexico, Southwestern Public Service, a subsidiary of Xcel Energy, is part of a regional transmission organization.

But, in much of the west, there isn’t a specific entity to coordinate the transmission of electricity throughout the grid.

“In the west,” Martinez said. “We weren’t as quick to adopt regional cooperation policies.”

She said this is in part because the population is not as dense.

“We really built huge baseload power plants with long, high voltage transmission lines to serve our loads,” she said. “And there were not very many of those lines and that’s proving to be very important now.”

Because the eastern United States has a more densely populated area, there tends to be more tightly connected transmission infrastructure.

“So we’re behind and we need to catch up,” Martinez said.

Wind and solar make operations more dynamic and unpredictable, she said.

“That’s creating a lot of new issues that we’ve never seen before,” Martinez said.

PNM is currently working on a 20-year transmission plan that it hopes to release later this year. The plan will outline possible transmission projects that PNM could embark on in the future.

PNM has also been in talks with Pattern Energy about the possibility of connecting to the SunZia line that is being built and will run south of Albuquerque. 

The move to renewable resources also changes how PNM must plan.

Before, Martinez said, PNM planned for its peak load, or when people are using the most electricity.

Now PNM must plan for its highest risk hours.

“The times we are at highest risk are when our renewable generation is at its lowest,” Martinez said.

The hardest situation to plan for can be when there is a lot of wind in eastern New Mexico and storm coverage in the Albuquerque area. But that isn’t necessarily because of resource shortages. 

Part of the challenge on those days has to do with where the electricity from the wind turbines in eastern New Mexico is going. The power generated by the turbines uses PNM’s high voltage transmission lines as it makes its way across the state to California.

“So our smaller but still high voltage transmission lines serving Albuquerque get constrained in ways we never saw before,” Martinez said.

All of these changes come with a price tag and, while the renewable energy sources tend to be less expensive to operate, the costs of essentially reinventing the grid are eating up those savings.

Demolition underway

The transition, Martinez said, is happening because it is the right thing to do for the climate and environment.

“It’s not because the fuel is cheaper, because the need to expand the grid is going to overrun the cost savings from fuel for decades,” she said.

At the same time, PNM’s analysis that was released in 2017 and predicated the closure of the San Juan Generating Station found that transitioning out of coal would save customers money.

The Energy Transition Act came about as a result of that 2017 announcement and on July 1, 2019—the day that the ETA went into effect—-PNM filed to close the power plant.

In its initial plan, PNM was going to leave the stacks and the generating station standing and the demolition would occur in a few decades. 

But the San Juan County Commission passed an ordinance forcing the demolition of the plant.

Even before the stacks fell on Saturday, work was underway to remove the plant from the landscape.

More than 15 million pounds of materials have been recycled so far and the plan is that 90 percent of the material, by weight, will be recycled. 

As for the site where the power plant stood, it will still provide a vital service to the grid. The substation that took electricity from the San Juan Generating Station will remain and the San Juan Solar project is connected to the grid at that point.

PNM owns the land and, while the future development of the parcel is uncertain, its proximity to transmission infrastructure is likely to draw interest from energy project developers.

Economic impacts

The closure is a bitter point for some of the San Juan County residents, including some in the City of Farmington who unsuccessfully attempted to keep the plant open through a carbon capture bid.

Farmington Mayor Nate Duckett told legislators this week that the city has made a lot of progress on its efforts to diversify the economy and build recreation opportunities, but that can’t replace what’s been lost.

“We’re trying to replace $100,000 a year jobs with recreation jobs,” he said. “That’s not really feasible.”

He said the hope is that by creating a place where people want to live and play and go to school, Farmington will be able to attract companies that offer higher paying jobs.

The Energy Transition Act has also provided funds for economic development and workforce development in the impacted communities. It also required some of the replacement power to be built within the Central Consolidated School District boundaries in an effort to offset the loss of property tax revenue. This is also providing some short-term employment opportunities.

Tim Gibbs, the CEO of Four Corners Economic Development, told legislators that there has been a decrease in population in San Juan County “but it feels like it’s finding equilibrium.”

As San Juan County works to recover from the loss of the San Juan Generating Station, it is bracing for the closure of the nearby Four Corners Power Plant, which is slated to close in 2031, though once again hopes have arisen that a carbon capture bid could keep it open.

Environment and health benefits

Meanwhile, environmental advocates say the transition from coal will ultimately benefit people living in the Four Corners region.

“We are hopeful that after the demolition of San Juan Generating Station, the Four Corners area and its communities will no longer have to sacrifice our health and safety for fossil fuels,” Rose Rushing, attorney at Western Environmental Law Center, said in a press release. “There is work to be done to ensure that the region can transition to a sustainable, diversified economy, starting with fulfilling the commitments of the Energy Transition Act. We look forward to working with community groups in the next year to make sure our community receives the full benefits the Energy Transition Act promises.” 

Some of the people who have been impacted the most by emissions from the power plant are residents of the Navajo Nation.

“Indigenous advocates have long brought attention to the many adverse public health, land, and water quality impacts resulting from the operations at SJGS and Four Corners Power Plant (“FCPP”), pointing out the environmental injustice that Indigenous and local communities were saddled with in living so close to two coal mines and plants”, Robyn Jackson, executive director of Diné C.A.R.E, said in a press release. “We can remember the terrible air quality that both plants produced in our region. It therefore came as no surprise that health disparities existed among our population, compared to the rest of the U.S. general population when it came to childhood asthma, as well as other illnesses like heart disease, cancer, and stroke. Our tribal-led organization recognizes that it is necessary and inevitable that our local economy be rebuilt around development that is renewable, sustainable, and regenerative. The health of our communities, economy and climate will require a transition away from fossil fuels if we are to survive and succeed.”