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New energy and reclamation economy in full swing

The on-the-ground evolution of our region’s energy economy accelerated in July with ground breaking for a large solar project simultaneous with the initial demolition of the coal-fired power plant it is slated to replace.

The 200-MW San Juan Solar photovoltaic project commenced construction in July on 2,000 acres a few miles northeast of the now-shuttered San Juan Generating Station, outside Farmington. The first phase of San Juan Solar also includes 100-MW of battery storage. D.E. Shaw Renewable Investments is building the project and selling the electricity to Public Service Co. of New Mexico as partial replacement for the coal-fired electricity from the closed coal plant.

Meanwhile, PNM awarded the contract for decommissioning and demolition of the power plant, and several weeks ago the first pieces of the power plant were torn down. PNM also completed auctioning off reusable components of the power plant.

Decommissioning of San Juan Generating Station will occur over the next few years, and employ about 50 workers. One milestone will be the demolition of the four now-silent smokestacks slated for some time in spring 2024. At the same time, Westmoreland is busily engaged in backfilling and reclaiming the now-defunct San Juan Coal Mine that supplied the power plant.

San Juan Solar is importantly located within the same school district as the coal plant, thereby providing significant replacement for property taxes lost from the coal plant’s closure. Construction of the solar project will employ several hundred workers during the course of the next year.

Farther afield, the Arroyo solar project came online in July and starting generating electricity for delivery to PNM. Arroyo is located on 1,700 acres of private land near Pueblo Pintado within the Navajo Nation west of Cuba.

San Juan Solar was delayed by at least year because of factors that are likely also impacting the various proposed solar projects across Southwest Colorado. A variety of developers are behind five tentative projects in La Plata, Montezuma, Dolores and San Miguel counties, ranging in size from 600 acres to almost 2,000 acres. None of the five seem to be advancing very quickly, including the Hesperus solar project that has spurred significant local controversy.

San Juan Solar’s original schedule was impacted by COVID-19-related supply chain disruptions and disputes about solar panel import tariffs. The delay caused the need to renegotiate the terms of its power purchase agreement with PNM, which in turn needed approval from New Mexico’s Public Regulation Commission to confirm it was still a prudent and necessary project. Then interest rates rose, requiring refiguring the project’s financing. Undoubtedly, the several speculative projects across Southwest Colorado are facing similar headwinds.

Northwest New Mexico has also embraced its outdoor recreation assets, in particular those associated with the Animas River. San Juan County held a ribbon-cutting in May for the newly constructed boat launch at Cedar Hill, providing a new public access for easy day floats to Aztec. The $200,000 project was financed in large part by settlement money the county received from the Gold King Mine spill.

Additionally, several million dollars were approved for reconstructing irrigation diversion structures along the Animas that will improve boater safety. And Farmington was awarded $700,000 for further improvements to San Juan River recreation sites and boat launches. These projects are also funded by payments from the EPA to New Mexico for settlement of natural resource damages caused by the Gold King spill.

All told, an economic transformation relying on renewables, reclamation and recreation is in full swing in northwest New Mexico.

Mark Pearson is executive director at San Juan Citizens Alliance. Contact him at mark@sanjuancitizens.org.