Tax and Jobs Analysis of San Juan Generating Station Closure

Executive Summary

Download the full report (Jan. 2019; 14 pages; pdf)

By Dr. Kelly O’Donnell, O’Donnell Economics and Strategy

The San Juan Generating Station (SJGS) in Waterflow, New Mexico, is slated for closure in 2022. Closure of the mine and plant will eliminate approximately 450 jobs at the mine/plant complex. Retirement of the plant will also remove two substantial assets from the San Juan County property tax rolls, decreasing revenue for local jurisdictions including the County, San Juan Community College, and the Central Consolidated School District.

The transition away from coal will be difficult for area residents who depend on the mine/plant complex for their livelihoods, and for the local institutions that depend on property tax revenue from the sites. However, sensible redevelopment of the site can mitigate much of the economic damage and support a diverse and sustainable Four Corners economy. With its proximity to interstate transmission and extensive infrastructure, the SJGS site is an ideal location from which to generate both replacement power for current customers and clean power for export.

Economic modeling indicates that a 450 megawatt solar photovoltaic plant at or near the site could replace all lost property tax revenue, support thousands of jobs over two or more years of construction, and generate more than $67 million in additional tax revenue for state and local governments.

A number of statutory and regulatory steps can be taken to help realize the myriad potential benefits of productive redevelopment at SJGS. These include: requiring renewable generation at the site as part of PNM’s cost-recovery plan, increasing the New Mexico renewable portfolio standard (RPS), creating an RPS carve-out for brownfield solar, and extending the New Mexico Renewable Energy Production Tax Credit.

Download the full report (Jan. 2019; 14 pages; pdf)