NM gets extra time to address pollution from coal-fired plant

ALBUQUERQUE, N.M. - The U.S. Environmental Protection Agency on Monday gave New Mexico officials, the state's largest electricity provider and others more time to sort out a solution for curbing haze-causing pollution at a coal-fired power plant in northwestern New Mexico.

EPA Administrator Lisa Jackson signed a 90-day stay so parties can evaluate alternatives for the San Juan Generating Station. The 1,800-megawatt plant is New Mexico's single largest source of electricity, and it also provides power to customers in California, Arizona and Utah.

"This is an important opportunity to come to an agreement," Jackson said in a letter sent to Republican Gov. Susana Martinez. "I agree with you that this would be in both the environmental and economic best interests of New Mexico."

At issue is an EPA mandate that calls for Public Service Company of New Mexico to equip the coal-fired plant with selective catalytic reduction technology to cut pollutants that cause regional haze and visibility issues in national parks and wilderness areas.

The EPA rule, issued last August, gave PNM and the plant's other owners five years to come into compliance.

The utility and the Martinez administration have challenged the order in federal court. They favor a state plan for trimming haze that would have been less costly.

PNM this spring received four bids to install the SCR technology. They ranged from about $750 million - more than double the EPA's estimate - to about $805 million. The utility warned that costs associated with the pollution upgrades would result in higher rates for customers.

PNM Resources President and CEO Pat Vincent-Collawn called the EPA's move a "fresh opportunity."

"We believe the state plan works for the environment and for the people in our state, but we are open to other balanced approaches that consider customer costs, environmental benefit and the economic impact to the citizens of the state, particularly the Four Corners Region," Vincent-Collawn said in a statement.

Environmental groups that have been critical of PNM and the state's plan for curbing pollution at the plant were hopeful they would be part of the discussions.