FAQs

Yes. On March 22, 2019, Governor Michelle Lujan Grisham signed Senate Bill 489 into law. The new legislation is officially known as the New Mexico Energy Transition Act (ETA). The ETA establishes two new significant statewide energy policy standards: 1.) a renewable energy standard of 50 percent by 2030 and 80 percent by 2040 for investor-owned utilities and rural electric cooperatives; and, 2.) a requirement that all coal-fired power plants with original installed capacity exceeding 300 MW must comply with a maximum carbon emissions of 1,100 lbs per megawatt-hour effective January 1, 2023, subject to regulations promulgated by the New Mexico Environmental Improvement Board. As SJGS currently produces electricity with a CO2 of 2,201 lbs. per megawatt-hour, implementation of the ETA will require SJGS to cease electricity generation by January 1, 2023, unless carbon capture is installed and is in operation.  Sargent & Lundy estimates that this technology will reduce CO2 emissions from 2,201 to below 250 lbs. per megawatt-hour at which rate SJGS will be compliant with the ETA.

Passed in California in 2009, the California EPS limits the importation of out-of-state, fossil-fuel powered electricity with CO2 emissions more than 1,100 pounds per megawatt-hour. The law triggered the 2015 exit of several California utilities from ownership participation in SJGS. With a projected post-retrofit CO2 emission level of below 250 pounds per megawatt-hour, SGJS will become “environmentally qualified” to export wholesale electricity to California — the largest power market in the West.

The 45Q tax credit an increasingly robust and comprehensive carbon capture and utilization deployment incentive valued at up to $85/metric ton for carbon captured and stored.

The credit was first enacted in 2008 as part of the Internal Revenue Code (Title 26 of the U.S. Code) and substantially modified in the 2018 FUTURE Act to support investment in productive carbon capture and sequestration investments. Most recently, the Inflation Reduction Act (IRA) of 2022 increased the 45Q tax credit value to $85/metric ton for captured QCO stored in geologic formations, $60/metric ton for the use of captured carbon emissions, and $60/metric ton for QCO stored in oil and gas fields if certain wage and apprenticeship requirements are met. This increase further incentivizes CCUS project development by boosting and making more flexible the investment incentives.

The reformed 45Q tax credit is arguably the most robust and comprehensive carbon capture and utilization deployment incentive in the world today and provides a foundational policy on which to build. The FUTURE Act significantly increases the value of the tax credit and restructures it to enhance monetization to finance projects. Applicable to all man-made or anthropogenic sources of CO2, the credit also accommodates the capture and use of both CO2 and CO, extends eligibility to include direct air capture and other forms of carbon utilization beyond EOR, and expands the opportunity for carbon capture deployment to a wider array of industrial facilities.

The expanded 45Q tax credit program is similar to proven wind and solar power production tax credits. Both of those tax credits continue to play a crucial support role in the rapid deployment of wind and solar power generating facilities.

CCS and CCUS are proven technologies. Our project will be constructed within the perimeter of the existing San Juan Generating Station. Emissions from SJGS are expected to be at or below the current levels for NOx, Sox, Mercury, and particulate. In addition, SGJS is fully compliant with all U.S. and New Mexico standards for air and water protection.

Per Sargent & Lundy’s report, SGJS will emit below 250 pounds per megawatt-hour, which is 77 percent less than the 1,100 pounds per megawatt-hour limit mandated by the Energy Transition Act, and a 95 percent reduction from the current estimated rate of 6.6 million metric tons per year.

Enchant works with the City of Farmington and key partners to create high-quality jobs; fuel a tax base that funds education and services for the surrounding communities; advance principles of environmental justice; and provide reliable, competitively priced energy to New Mexico and the Western states.

The SJGS project should reduce costs for FEUS customers. The FEUS will continue to own a five percent in SJGS and will continue to pay its five percent share of the costs of SJGS, including fuel cost, O&M cost, and capital costs. However, FEUS will not be required to pay any of the capital or operating costs of the CCUS unless it elects to participate in this portion of the project.

We anticipate that construction and operation at the SJGS will create two million new worker hurs at union-approved terms. Further, Enchant is committed to maintaining existing employment at the San Juan Generating Station.

Enchant Energy will continue to work with unions currently represented at SJGS and will remain a union shop.

Yes. Approximately 40 percent of current employees at Enchant-controlled operations come from multiple native tribes. Taxes paid by Enchant benefit native communities that live in the region. We plan to continue to build these relationships as the project moves forward.

To address this concern, Enchant hired Sargent & Lundy to review the current costs associated with a carbon capture retrofit at the SJGS location. Sargent & Lundy found that costs have decreased 32 percent to an estimated $1.3 billion since Sargent & Lundy’s last study for PNM in 2010. They suggest this decrease is due to the impact of increased environmental controls installed in 2017 and the utilization of the excess infrastructure due to the closure of Units 2 and 3 in 2017. The Sargent & Lundy report suggests that the capital costs could be further reduced by competitive bidding, by choosing the most effective of the three proven amine-based technologies, and by incorporating improved technological developments.

Enchant’s executive team has decades of operational excellence in energy and alternatives. The team is partnering with world-class energy investors and innovators, including: Derivee Power; Navajo Transitional Energy Corp (NTEC); the City of Farmington, New Mexico; Mitsubishi; Sargent & Lundy; Kiewit Power; Cohn Reznik; Los Alamos National Lab; Sandia National Laboratories; New Mexico Institute of Mining and Technology; the New Mexico Bureau of Geology; University of New Mexico; University of Utah; and University of Wyoming.