Enchant Energy praises new IRS tax credit rules
- Sep 29, 2022
- Press and Articles
- By admin
BY KEVIN ROBINSON-AVILA / JOURNAL STAFF WRITER
ALBUQUERQUE, N.M. — The Internal Revenue Service released its first guidance this week on federal tax credits for carbon capture projects, boosting confidence by Enchant Energy Corp. about its prospects for converting the coal-fired San Juan Generating Station into a carbon-capture facility.
Public Service Company of New Mexico, however, said the new IRS guidance doesn’t change its conclusion that converting the power plant is far too expensive for PNM to pursue itself.
PNM currently co-owns San Juan with four other utilities, including the city of Farmington with a 5% stake. PNM and three others want to abandon the facility in 2022, allowing Farmington to become sole owner.
The city wants to turn San Juan over to Enchant Energy, which says it can convert the plant to carbon capture for $1.3 billion. It would earn back that investment through a $35 federal tax credit paid for every ton of CO2 it buries underground. Enchant expects to produce 6 million tons of carbon each year.
Congress approved the tax break in 2018, and this week, the IRS released initial guidance on how companies can claim the credits.