The purpose of this letter is to alert you that the actual costs of continuing to use the San Juan facility to provide electricity may be much higher than the current costs of 5.5 cents/kWh.
The Decommissioning report (which will be discussed at 5:30 p.m. today and voted upon) entitled “San Juan Decommissioning and Trust Funds Agreement Among …..” attempts to delineated the costs and responsibilities of the parties involved. Examination of the report exposes three reasons for likely cost increases from San Juan:
- pollution controls must be added to abate the NOx;
- upgrades will be made by PNM to increase power from the remaining two units; and
- breakdown of the cost responsibilities leaves the remaining parties with an open budgetary situation: there is an initial decommissioning cost (which Los Aamos County is slated pay 2.175 percent, and a ‘down the road’ decommissioning cost of which Los Alamos County is slated pay 4.309 percent).
It should first of all be noted that the companies that are getting out, just leaving the San Juan facility behind, are only being required to pay the initial decommissioning costs, they are not required to pay any ‘down the road’ costs.
These ‘down the road’ costs are the main problem. Although PNM estimates the cost of getting rid of the coal ash associated with Units 2 and 3, their estimates are wildly lower (3 orders of magnitude!) than the comparable costs being spent by other utilities. The costs presented for the initial decommissioning, amounting to $3 million plus, do not, as far as I can understand from comparable sources with comparable problems, come close to representing the real costs of the San Juan coal ash clean up.
The owners left in, and this includes Los Alamos County, have been told that, the initial cost of getting rid if the coal ash is $400,000 for each Unit (2 and 3). The estimates of the amount of coal ash that has resulted from burning coal since 1973 is 40,000,000 tons (yes, “tons”) for the two Units (2 and 3). The $800,000 allocated, actually amounts a cost per ton for removal of 2 cents.
The kicker is the statement that “The remaining parties also agree that any adjustment to a Decommissioning Funding Target Amount ….. will not be deemed an amendment to this Decommissioning Agreement but rather will be considered an element of the administration and implementation of this Decommissioning Agreement”. That is, Los Alamos County may have to pay whatever the real costs the administrator incurs in the cleanup.
So what are the real costs likely to be? A close, but still less expensive parallel situation (because the ash was not dumped down a mine), is the clean up of the Santee Cooper Power Company Plants in South Carolina. They originally estimated $110 million to clean up 1.1 million tons of coal ash, but after many months of negotiation, were bargained down to $22.7 per ton. Furthermore, Santee Cooper said it would take 10 to 15 years to do this. This is about 1,000 times the cost estimate in the Joint San Juan Decommissioning and Trust Funds Agreement. One thousand times!
OK, there are at least two possibilities. First, that the cleanup is the minimum they can get away with now (until some law suits are filed), or, second, that the clean up is adequate, but numbers are mistaken — off by several zeros!
If we are leaving these poisons that have been put into the San Juan mine in the ground to leach for years to come, and poison the drinking and agricultural water of the peoples of the Four Corner area, we should be ashamed of ourselves. It is certainly less than we would teach our children to do. On the other hand, if the intent is good, but the numbers are so wrong, the agreement should not be signed until an independent investigation is carried out on the costs.
It must be remembered that the agreement as written, commits all parties to 18 years of ownership from Dec 31, 2017. Note Los Alamos County’s current involvement ends in 2022, but signing this agreements extends it 13 more years. Thirteen more years of dealing with this increasingly uncertain situation. Each party must fund its share of the proposed $30 million initial estimate of the final decommissioning fund by 2022. Once again, the Administrator will determine the final costs after the work is done, and Los Alamos County will have already committed itself to these costs.
Please lets be careful and get more details before signing a blank check.