From coal to clean energy, Four Corners Power Plant faces 2031 shuttering

By Donovan Quintero
Special to the Times

WINDOW ROCK — The future of the Four Corners Power Plant, a coal-fired facility vital to the Navajo Nation’s economy, will be the focus of a crucial meeting on Jan. 16 at the Arizona Public Service headquarters in Phoenix.

Resources and Development Committee members, along with representatives from the president’s office and the Division of Natural Resources, will meet with APS and the Navajo Transitional Energy Company to discuss the plant’s fate ahead of its scheduled closure in 2031.

During a Jan. 6 meeting, Council Delegate Brenda Jesus, the RDC chair, emphasized the importance of this discussion, explaining that the committee’s role is to provide guidance on revenue streams and define the Nation’s position regarding the plant’s future.

“The purpose of the meeting with APS is to discuss the future of the Four Corners Power Plant and, again, to get the Nation’s position on how we want to proceed,” said Jesus.

Several RDC members, including Council delegates Casey Allen Johnson, the vice chair, and Rickie Nez, have confirmed their attendance. Nez noted the plant’s impact on his district, calling the issue critical to his constituents.

The plant, located near Farmington, has been a cornerstone of the Navajo economy for decades. However, it is scheduled to cease operations by the end of 2031 as part of a larger transition toward cleaner energy sources. This decision aligns with national goals to reduce greenhouse gas emissions but raises significant concerns for coal-dependent communities like the Navajo Nation.

Reflecting NGS

The closure of the power plant mirrors the 2019 shutdown of the Navajo Generating Station in LeChee, Arizona, and its associated Kayenta Mine. Those closures caused the loss of approximately 1,000 jobs and $40 million in annual revenue for the Navajo Nation, which hit the tribe’s coffers and created economic challenges posed by the decline of coal. As these closures accelerate, the Nation is exploring options to mitigate the impact and chart a sustainable path forward.

One potential solution under discussion is the implementation of Carbon Capture and Storage technology at the Four Corners Power Plant.

NTEC, which manages the Nation’s energy resources and holds a 7% ownership stake in the plant, recently secured $6.55 million in federal funding from the Department of Energy to study CCS feasibility. If implemented, CCS could capture over 95% of the plant’s carbon dioxide emissions, potentially allowing it to continue operating beyond 2031.

The carbon capture and storage study, expected to be completed this year, will assess the environmental, economic, and logistical aspects of equipping the power plant with the technology. However, APS, the majority stakeholder with 63% ownership, has expressed reservations about carbon capture, citing high costs and technical challenges. Without APS’s support, the future of CCS at the aging coal-fired power plant remains uncertain, raising concerns that the financial and operational burdens could fall solely on the Navajo Nation if NTEC seeks full ownership of the plant.

In addition to carbon capture, renewable energy projects such as solar and wind are being pursued as part of the Navajo Nation’s broader effort to diversify its economy. The region’s abundant natural resources make it well-suited for these initiatives, which offer opportunities to replace lost revenue from coal while creating new jobs.

Nuclear energy is also being explored as a potential clean energy solution. Los Alamos National Laboratory, based in New Mexico, is advancing research on small modular reactors, which they state are designed to be safer, more cost-effective, and easier to deploy than traditional nuclear reactors. SMRs could serve as replacements for retiring coal plants, providing reliable power while reducing emissions.

LANL is addressing key challenges associated with nuclear energy, such as waste management and reactor safety, to make it a more sustainable option.

The transition from coal to clean energy presents both opportunities and challenges for the Navajo Nation. For generations, coal mining and power production were integral to the region’s economy and culture. The closures of plants like the San Juan Power Plant and the NGS have caused significant economic and social disruption, leaving families and local governments searching for new ways to adapt.

Carbon capturing technology

Before its shuttering in 2022, PNM had considered carbon capture technology.

Discussions to use carbon capture technology at the San Juan Generating Station had sparked debate over its feasibility and costs. New Mexico set a goal for itself to move toward renewable energy goals, so questions arose about whether retrofitting the coal-fired plant with carbon capture and storage technology was a realistic option.

SJGS, once a major source of electricity in the Four Corners region, closed in June 2022. The plant’s operator, Public Service Company of New Mexico, determined that transitioning to renewable energy sources and natural gas was a more practical path forward. PNM’s long-term energy strategy prioritizes reducing carbon emissions and meeting New Mexico’s Renewable Portfolio Standard, which requires 50% of electricity to come from renewable resources by 2030 and 100% carbon-free energy by 2045.

Retrofitting SJGS with carbon capture technology was considered but ultimately deemed unworkable because of the high costs and operational inefficiencies. PNM estimated that adding carbon sequestration to the plant would increase the total cost of its energy transition plan by $1.3 billion, pushing the total to over $7 billion. Monthly bills for customers would have risen by $10 per household compared to savings of nearly $7 under PNM’s preferred plan, which includes a mix of solar, wind, and flexible natural gas generation.

At SJGS, carbon sequestration would have required 29% of the plant’s generated power just to operate the technology, leaving less electricity for the grid. The increased coal consumption needed to sustain it – estimated at 40% more than usual – would further drive up costs. Additionally, CCS would use 50-60% more water, placing already significant strains on local resources.

While the technology captures carbon dioxide emissions, using the captured carbon for industrial purposes, such as enhanced oil recovery, could result in a net increase in emissions. However, critics argued that CCS did not align with the broader goals of reducing dependence on fossil fuels and prioritizing cleaner energy.

One significant concern about retrofitting SJGS with CCS would have been its impact on renewable energy development. The plant’s continued operation would have limited the transmission capacity available for lower-cost renewables like solar and wind. In addition, coal-fired plants with carbon sequestration are also less flexible than renewable energy sources, meaning they could force reductions in renewable energy output. At SJGS, curtailments would have reduced renewable energy generation by an estimated 328,000 megawatt-hours per year, the equivalent of one-third of the plant’s output.

Moving away from coal

PNM explained its decision to retire SJGS to transition away from coal while supporting workers and communities affected by the closure. Through the Energy Transition Act, significant funds were allocated to help workers, and the region adapt. More than $17 million was designated for severance packages for over 200 affected employees, with an average of six months of severance per worker.

Additional funds were set aside for job training and community support. Around $2.8 million was allocated for training programs to help workers transition to new industries. A displaced worker fund received $12 million to assist employees and local businesses affected by the plant’s closure. The act also included $6 million for economic development and $1.8 million for programs focused on Navajo communities.

The closure of SJGS also signals a shift in how the region manages its energy future. For decades, coal-fired plants like SJGS played a central role in powering the Four Corners area and supporting local economies, especially for the Navajo Nation. However, the rising costs of coal and the need to address climate change have accelerated the move to cleaner energy sources.

Jesus reiterated the importance to the RDC members before voting on approving who’d be attending the meeting with APS.

“A lot of us delegates are going to be down in Phoenix to discuss the future of the Four Corners Power Plant to get the Nation’s position on how we want to proceed … so again, we need to start having these dialogues,” said Jesus.

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