Enchant Energy CEO addresses Petra Nova closure implications for San Juan project

AZTEC — Supporters of retrofitting the San Juan Generating Station with carbon capture technology faced questions from a legislator about a coal-fired plant in Texas — a precursor project to the proposed SJGS retrofit — that successfully used carbon capture technology yet was closed by its owner when oil prices plummeted earlier this year.

The state's Science, Technology and Telecommunications Committee heard a presentation Sept. 28 by Enchant Energy and Farmington representatives on Enchant's continued efforts to keep the generating station open.

The proposed retrofit project has been controversial as it would mean continued coal mining and the production of byproducts like fly ash. But project backers say it also means preserving high-paying jobs in San Juan County and preserving the local tax base while cutting carbon emissions.

Rep. Abbas Akhil, D-Albuquerque, asked Enchant Energy about the closure of the Petra Nova facility near Houston, Texas, earlier this year. The Petra Nova project has been held up as an example of a successful carbon capture project and the team that developed it has been brought together again for the San Juan project.

NRG, which owns the Petra Nova project at the W.A. Parrish coal-fired generating station in Texas, cited the oil markets as the reason to close it in May. At that time, the price of oil was dropping to record lows. NRG stated that Petra Nova will be brought back online when economic conditions improve.

Enchant Energy CEO Cindy Crane reiterated that Petra Nova was a success although it is not currently operating. She said it was built before the 45Q tax credits were in place. These tax credits are a key piece of the financial plan for the San Juan Generating Station project, she said.

“Their economics are going to be significantly different than our economics,” she said.

Much of the information laid out at the hearing had previously been presented. No new agreements were announced, however Enchant Energy officials emphasized that the company is in negotiations on various contracts.

This includes negotiating contracts to sell both carbon dioxide and electricity.

Crane said the company submitted a bid as part of the Public Service Company of New Mexico 2020 request for proposals for electricity. She said Enchant still plans to sell power on the merchant market, but is also seeking long-term contracts for sales of power.

Additionally, Enchant Energy COO Peter Mandelstam said the company has applied for transmission rights for 1,800 megawatts of power.

Crane said the rest of the year Enchant Energy will be focused on raising equity for development, initiating permitting, expanding the management team, negotiating agreements for carbon capture sales, transportation and storage, negotiating power purchase agreements and continuing negotiations of transferring ownership.

Enchant hopes to get permission to begin construction of the carbon capture island in 2021.

“We believe that the construction can begin without any impacts to the operations of the plant,” Crane said.

She said the company aims to have it fully operational by the end of 2024.

This interim legislative committee meeting can be viewed at nmlegis.gov.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

Support local journalism with a digital subscription: http://bit.ly/2I6TU0e