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Los Alamos Utilities Board Unanimously Approves San Juan Generating Station Settlement Agreement

on July 15, 2015 - 10:13pm

Giving a presentation this evening to the Utilities Board, from left, Deputy Utilities Manager – Finance/Administration Bob Westervelt, Deputy Utilities Manager - Electric Steve Cummins and environmental attorney Richard Virtue from Santa Fe. Screen Shot/LAC

Utilities Manager Tim Glasco discusses the San Juan Generating Station Settlement Agreement. Screen Shot/LAC

Resident Robert Falco raises concerns of potential liability from contamination by the plant into the San Juan River and mine. He encouraged the board to exit the agreement: 'Cut your losses when it's easy.' Screen Shot/LAC

Staff Report

The Board of Public Utilities voted 5-0 to approve the San Juan Generating Station Settlement Agreement this evening during its meeting in Council Chambers.

The approval includes the San Juan Project Restructuring Agreement, the Amended and Restated Mine Reclamation and Trust Funds Agreement, the San Juan Decommissioning and Trust Funds Agreement, the Restructuring Amendment Amending and Restating the Amended and Restated San Juan Project Participation Agreement and the Exit Amendment Amending and Restating the Amended and Restated San Juan Project Participation Agreement.

The motion includes forwarding the San Juan Generating Station Settlement Agreement to the Los Alamos County Council July 28 for approval.

Los Alamos County is one of nine participants in the San Juan Generating Station. The San Juan Project Participation Agreement (SJPPA), which defines the County’s ownership and responsibilities in the San Juan Plant, would normally expire June 30, 2022. 

Following a decision to retire two of the four units at this coal fired plant and retrofit the remaining two with emission reducing technology, four of the nine owners decided to exit the plant. The County has a contractual obligation to stay in the agreement until 2022 and would be fined some $2 million in fees to exist early, not to mention the debt service.

Since January 2014, the nine participants have been negotiating a Restructuring Agreement, a Mine Reclamation and Trust Funds Agreement and a Decommissioning Agreement.  The Participants also needed to amend the San Juan Project Participation Agreement as a result of the Restructuring Agreement.

The agreements lay out the financial obligation for the environmental upgrades, decommissioning and mine reclamation for all nine owners, as well as restructuring of ownership for the remaining two units for the participants in the plant after Dec. 31, 2017.

During their presentations to the BPU Board, Utilities Manager Tim Glasco, Deputy Utilities Manager – Finance/Administration Bob Westervelt, Deputy Utilities Manager - Electric Steve Cummins and environmental attorney Richard Virtue explained that all five agreements must be signed by each of the participants by the end of this month.

They said that restructuring the ownership of the SJGS presents an opportunity for the County to secure a clear off-ramp from the project that is both economical and aligns with DPU’s goals of being carbon neutral by 2040.

This agreement also will mean some $15 million in fuel savings to Los Alamos County with no significant increase in liabilities, Cummins said.  

Several citizens spoke during public comment and urged the BPU to exit the agreement and pay the fees or penalties. Vice Chair Stephen McLin chaired this evening’s meeting and attempted to hold the ardent citizens to three minutes. 

BPU Chair Andrew Fraser attended the meeting by telephone. Board members Paul Frederickson, Jeff Johnson and David Powell were in attendance.

Read the San Juan Generating Station Settlement Agreement here.


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