Frequently Asked Questions


Who is Enchant Energy Corporation?

Enchant Energy is a New Mexico company formed for the purpose of acquiring a 95% interest in the 847 MW coal-fired San Juan Generating Station (“SJGS”) near Farmington, New Mexico and retrofitting it with carbon capture technology.  This technology will allow 90% of CO2 emissions to be captured at this already environmentally compliant large generating station. Captured CO2 would be sold for use in enhanced oil recovery (“EOR”) and the plant’s electricity will be sold into the wholesale power market. (The City of Farmington will retain its current 5% ownership in SJGS.)

What technical, operational and financial expertise does Enchant Energy Corporation bring to the project?

The principals of Enchant Energy, Jason Selch and Larry Heller, each have over 30-years’ experience in investing in energy companies.  This includes substantial experience in the independent power generation sector.

To supplement their knowledge and to add to capability, the Enchant Energy team is collaborating with several world-class engineering and consulting firms, some of which have direct experience with the San Juan Generating Station and world-class carbon capture and sequestration facilities.

  • Sargent & Lundy
  • Navigant Consulting
  • EFM Consulting
  • Sidley Austin LLP
  • Wanger Institute for Sustainable Energy Research (WISER) at the Illinois Institute of Technology

In addition, Enchant Energy benefits from its association with Farmington Electric Utility System (“FEUS”) staff who represent the City of Farmington on the San Juan Generating Station Coordinating Committee.



What does CCS stand for?

CCS stands for Carbon Capture and Storage.

What does CCUS stand for?

CCUS stands for Carbon Capture Utilization and Storage.


How does CCS or CCUS work? What technology will be used in the San Juan Generating Station (SJGS) retrofit project?

There are several different technologies that capture and use CO2 from combustion sources, including coal-fired power plants.  One of particular interest to Enchant Energy in conjunction with retrofitting the San Juan Generating Station (“SJGS”) is the amine-based COcapture system.

In general, an amine-based COcapture system consists of a quencher (or pre-scrubber), an absorber and a stripper as shown in the process diagram below. Compression and dehydration processes are also added to the overall process to produce CO2 that meets pipeline-quality purity standards.

An amine-based COcapture system will reduce SJGS CO2 emissions by over 90 percent or 6,000,000 metric tons per year.  The reduction would make SJGS the cleanest burning power plant in New Mexico and one of the lowest CO-emitting fossil-fueled power plants in the nation. SJGS CO2 emissions would be 77% lower than the requirements of the recently enacted New Mexico Energy Transition Act.

 For more information, a technical review of the amine-based technology is contained in Section 2 of the Sargent & Lundy report commissioned by Enchant Energy. (The report is available here by download.)

Amine-based carbon capture technology is proven and currently used at the Petra Nova project developed by NRG in Texas and the Boundary Dam project in Saskatchewan in Canada. 

 Enchant Energy proposes to transport SJGS-produced CO2 via interstate pipeline to U.S. Environmental Protection Agency (“EPA”) approved permanent storage sites in New Mexico and Texas.

These sites, located in the Permian Basin, produce oil by a process called enhanced oil recovery (“EOR”).  EOR has been used for over 50 years.  CO2 is used to pressurize the oil-bearing formations but is not released to the atmosphere.

 As shown in the chart below, the Clean Air Task Force estimates that oil production from EOR field emits 37% less CO2 than conventional oil production.

What other CCUS projects have been implemented?

Large-scale amine-based absorption technologies similar to those being evaluated for SJGS are currently in operation at the Petra Nova and Boundary Dam facilities in Texas and Canada, respectively. Both of these facilities capture more than 90% of their pre-retrofit CO2 emissions.  Petra Nova began operations in January 2017 and Boundary Dam in 2014.  Both plants were retrofit projects, like Enchant’s proposed project at SJGS.

As with all advancing energy technology, the proposed CCUS technology at SJGS will build on the performance records of other successful installations.

Have engineering studies been done regarding adding CCUS capabilities to the San Juan Generating Station (SJGS)?

Yes.  Two studies have been conducted approximately ten years apart — the first in 2010 and the second in 2019.

In 2010, PNM contracted the engineering firm of Sargent & Lundy to evaluate a range of life-extending options for SJGS, including the implementation of CCUS technology. PNM concluded it was not in their shareholder’s best interests to invest in CCUS as the capital cost was estimated at $3.8 billion to retrofit units 1,2,3, and 4 and the 45Q tax credit was not available to subsidize the capital costs.

Nearly 10 years later in 2019, Enchant Energy contracted with the same Sargent & Lundy engineering firm for a similar feasibility analysis.  Sargent & Lundy is now estimating that the capital cost will be $1.3 billion or 32% less on a per MW basis due to technology improvements and the ability to utilize redundant infrastructure from the reduction of the plant size from four to two units.  In addition, due to the 45Q tax credits that were revamped in 2018 and the sale of CO2 to the enhanced oil recovery industry, the entire capital and operating costs of the carbon capture system can be financed without increasing the cost of producing electricity since the carbon capture operation will be paying for the electricity it uses.  (Click here to access the 2019 Sargent & Lundy study.)

Independent Research and Analysis of Carbon Capture

Is there a recent independently produced report that presents a broad overview of CCUS technology?

Yes.  A report from the nonpartisan National Association of Regulatory Utility Commissioners (NARUC) dated November 5, 2018  entitled “Carbon Capture, Utilization, and Sequestration: Technology and Policy Status and Opportunities” is available by clicking here.   Other reports on Carbon Capture Technology have been posted in the Carbon Capture section of the Enchant Energy Website.

 The introduction to the NARUC report states:

 “Carbon capture, utilization, and storage (CCUS) technologies constitute an important opportunity for coal. Decades of public and private research, development, and demonstration (RD&D) have led to crucial breakthroughs in CCUS on coal-fired power plants. Although CCUS is confined to a handful of power plants and faces barriers to widespread adoption in the power sector, CCUS has shown promising results in industrial uses, and results from power sector applications have been encouraging. CCUS is an exciting technology area with the potential to deliver environmental benefits, improved reliability, and increased economic activity.”


Are there nationally recognized scientific experts who study and report on carbon capture?

Yes, there are several.  Perhaps the nation’s leading recognized scientific expert is Dr. Julio Friedmann, Senior Research Scholar at the Center for Global Energy Policy at Columbia University, whose expertise is in the field of carbon capture technology, policy, and operations. Please find two of his recent articles on the Enchant Energy website: Why We Need Carbon Capture for Climate and Serious about Climate Means Serious about Carbon. Learn more about Dr. Friedmann’s background here. 

Another recognized scientific authority on carbon capture is Dr. Jennifer L. Wilcox, the James H. Manning Chaired Professor of Chemical Engineering at Worcester Polytechnic Institute. Dr. Wilcox has written extensively on carbon capture and recently delivered an informative presentation on the topic via National Public Radio’s TED Radio Hour, which can be accessed by clicking here. More on Dr. Wilcox’s academic and technical qualifications are found by clicking here.

Regulatory and Legislative Considerations Affecting the Project

Does the State of New Mexico have specific requirements governing CO2 emissions from power generation facilities?

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 249 lbs. per megawatt-hour at which rate SJGS will be compliant with the ETA.

What is the California Environmental Performance Standard (EPS)? How might it affect Enchant Energy’s plans for retrofitting SJGS with carbon capture technology?

Passed in California in 2009, the California EPS strictly limits the importation of out-of-state, fossil-fuel powered electricity with CO2 emissions in excess of 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 just 249 pounds per megawatt-hour, SGJS will become “environmentally qualified” to export wholesale electricity to California — the largest power market in the West.

What are Section 45Q tax credits? How do they affect Enchant Energy’s plans for retrofitting SJGS with carbon capture technology?

Section 45Q tax credits were originally enacted in 2008 as part of the Internal Revenue Code (Title 26 of the U.S. Code). The FUTURE Act, passed in February 2018 as part of the Bipartisan Budget Act of 2018, substantially revamped and increased the 45Q tax credit program to support investment in productive carbon capture and sequestration investments.  The revamped “45Q” tax credit boosts the financial incentives to companies willing to invest in the capture and storage of CO2 emissions.  Below is a table of the revised 45Q tax credits per metric ton of CO2 captured.  Based on 6 million metric tons a year capture and the 45Q tax credit amounts in the table, then the CCUS has the potential to generate $2.5 billion of 45Q tax credits over the first 12 years of its operation.   This quantity of 45Q tax credits should be sufficient to fund the $1.3 billion capital cost.

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. 

Enchant Energy and its IRS 45Q Carbon Capture Tax Credit investors strongly endorse appropriate accounting transparency and monitoring of our expected 2023-2035 45Q Tax Credits.  Enchant and its 45Q investors welcome the U.S. Environmental Protection Agency’s monitoring, reporting, and verification (MRV) requirements.

What is the Utilizing Significant Emissions with Innovative Technologies ("USE IT") Act?

In February 2019, U.S. Senator John Barrasso (R-WY), chairman of the Senate Committee on Environment and Public Works (EPW) and U.S. Senator Sheldon Whitehouse (D-RI) reintroduced the Utilizing Significant Emissions with Innovative Technologies (USE IT) Act, along with a larger bipartisan co-sponsorship. The Act supports CCS research and development (R&D) as well as federal, state, and NGO collaborative efforts to develop and construct CCUS facilities and carbon dioxide pipelines.     

What is the Enhancing Fossil Fuel Energy Carbon Technology ("EFFECT") Act?

In April 2019, U.S Senator Joe Manchin (D-WV) introduced the Enhancing Fossil Fuel Energy Carbon Technology (EFFECT) Act, with the support of a bipartisan coalition. The Act seeks to institute four research and development (R&D) programs on coal and natural gas technology, carbon storage, carbon utilization, and carbon removal.

Our Project

Will SJGS require more water than it does currently when CO2 capture technology is implemented?

Yes, the project would require an increase of 6,000 acre-feet per year in fresh makeup water, after considering current capabilities and blowdown flow. Fortunately, SJGS has excess water handling system capacity and water permits as a result of the shutdown of units 2 and 3 in 2017.

How is this project different from other failed carbon capture projects?

This project is different from other failed carbon capture projects because it will operate an amine-based, post-combustion, carbon capture system, similar to the technology successfully utilized in both the Boundary Dam (Canada) and Petra Nova (Texas) carbon capture projects.

Many of the earlier Carbon Capture projects such as the Kemper Project developed by the Southern Company and the Edwardsport Project developed by Duke utilized pre-combustion coal-gasification processes, which were unsuccessful.

Does Enchant Energy have access to transmission lines to move power out of the San Juan Generating Station?

No. Currently, each of the power plant’s current owners own their own transmission rights. Enchant Energy plans to arrange for access to the transmission rights as part of the ownership transition.  In addition, all of the transmission lines that are connected to the plant have Open Access Tariffs that are regulated by the Federal Energy Regulatory Commission (FERC).


We hear that carbon capture is prohibitively expensive. What's changed that makes it work now?

In order to address this concern, we hired Sargent & Lundy to review the current costs associated with a carbon capture retrofit at this particular location. Sargent & Lundy conducted a similar study for PNM in 2010. In the study that Enchant Energy commissioned in 2019, Sargent & Lundy found that costs have decreased 32 percent to an estimated $1.3 billion since their 2010 study. 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 technological developments improved since the Petra Nova plant.

Will the City of Farmington incur increased reclamation or other remediation liabilities as a result of participation in this project?

No, the City of Farmington’s ownership will not change. They will continue to own the same percentage in SJGS as they previously owned and will continue to be a party to the existing Reclamation and Decommissioning Agreements which designate the liabilities and provide for their funding.   The current parties to the Decommissioning and Reclamation Agreements are the current Participants in the San Juan Project, Public Service of New Mexico, Tucson Electric, the City of Los Alamos, Utah Associated Municipal Power System, and the City of Farmington as well as the former Participants who exited ownership of SGJS in 2017.  These agreements provide for Trust Funds that cover the liabilities through the date that Enchant will take over SJGS.  Should Enchant take over SJGS, it will become liable for 100% of the additional liabilities incurred as a result of construction of the CCUS and 95% of any additional liabilities from the operation of SGJS.  Farmington will remain liable for its 5% share of the reclamation of the mine and 5% of SJGS, excluding the CCUS.

Will Enchant Energy get special New Mexico or San Juan County tax breaks to make this deal work?

No, the project does not rely on New Mexico or San Juan County tax breaks, but the financing will be supported by the 45Q tax credit which is a tax credit applicable for federal taxes only.

How will Enchant Energy finance the plant acquisition and the costs to retrofit the San Juan Generating Station with CCUS?

Enchant Energy estimates that it will cost approximately $1.3 billion to acquire SJGS and to retrofit SJGS with CCUS.  Enchant will raise the financing by monetizing the approximately $2.5 billion of 45Q tax credits that are expected to be generated over the first 12 years of the project.


What State of New Mexico and U.S. permits are required to advance the project forward?

Due to the substantial environmental upgrade to SJGS that was completed in 2017, SJGS is in compliance with the Regional Haze Settlement with the New Mexico Department of Environment and the United States Environmental Protection Agency that was executed in 2013. As the installation of the CCUS is expected to reduce or keep the same the emissions of SOx, NOx, Mercury, and particulate emissions from the plant, it is not anticipated that additional emissions permits will be required.

SGJS will, however, require permits for the construction and operation of the CCUS and the associated CO2 pipeline.

A full evaluation of the permitting requirements of the project will be completed in conjunction with the FEED study.

Where will Enchant source new technology and infrastructure from?

Enchant Energy has not committed to any technology or infrastructure contracts because they are waiting for the results of an anticipated FEED study, which will include an investigation into the leading technology providers and best available technology. Additionally, the WISER Institute at the Illinois Institute of Technology will provide an independent evaluation of the available proven post-combustion, amine-based carbon capture technologies.


Environmental Impact

Are there any environmental risks associated with implementing this technology?

Incremental environmental impacts are expected to be minimal as the CCUS project is expected to be constructed within the perimeter of the existing San Juan Generating Station and emissions from SJGS are expected to be at or below the current levels for NOx, Sox, Mercury, and particulate.

 A complete evaluation of the environmental impacts of the CCUS and associated pipeline will be investigated in conjunction with the FEED study.

What level of CO2 will be emitted under the proposed retrofit of the plant? How does this work with the State of New Mexico's goals for carbon reduction under Senate Bill 489?

Per the Sargent & Lundy report, SGJS will emit 249 pounds per megawatt-hour, which is a 77 percent less than the 1,100 pounds per megawatt-hour limit mandated by the Energy Transition Act and a 90% reduction from the current estimated rate of 6.6 million metric tons per year.

Community Impact

Will this carbon capture project increase utility bills for Farmington Electric Utility System (FEUS) customers?

No. The FEUS will continue to own a 5 percent in SJGS and will continue to pay its 5% 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 become a participant in this portion of the project.  In addition, Enchant Energy has agreed to absorb any generation costs incurred that exceeds 80% of average cost per megawatt hour paid over the six-year period ending on December 31, 2018.  As a result, the cost of power per megawatt received by FEUS after July 1, 2022 will be at most a 20% discount to the amount paid per megawatt over the six-year period ending December 31, 2018. 

Will this project result in a reduction of high-paying jobs at the San Juan Mine and San Juan Generating Station?

No. Enchant Energy is committed to maintaining the current levels of employment at the San Juan Generating Station. Enchant Energy does not own the mine and cannot comment on their employment levels.

How many jobs is this project projected to create?

The Sargent & Lundy report suggests that the project will require 18 additional personnel to operate the carbon capture technology.

Will Enchant work with unions? In what ways?

Yes. Enchant Energy is committed to working with unions currently represented at SJGS and remaining a union shop.

Is there a role for native groups in the CCS?

Yes. We recognize that approximately 40% of employees at the mine and SGJS are Navajo and that taxes paid by SJGS and the mine benefit distinct native communities that reside in the region. We believe that their involvement is paramount and we plan to define this relationship as the project moves forward.

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