Settlement Reached with Sierra Club Regarding San Juan Generating Station

County News:

Courtesy Photo

PNM, BHP Billiton’s San Juan Coal Company and the Sierra Club have filed a settlement that would result in an additional, larger groundwater recovery system adjacent to the San Juan Generating Station and the San Juan Coal Mine near Waterflow, N.M.

Filed today with the United States District Court for New Mexico, the settlement needs court approval for the system to be constructed.

Los Alamos owns 2 percent of the San Juan Generating Station (or 7.2 percent of Unit 4) and thus will bear 2 percent of the cost, estimated to be about $200,000.

Under the agreement, a new groundwater recovery system would be built to enhance the current water management system by capturing groundwater downstream of the generating station and the mine, and incorporating a subsurface water barrier.

The captured water then would be diverted to an evaporation pond at the power plant site. The current system captures water downstream only from the power plant.

An approved agreement would settle a 2010 lawsuit filed by the Sierra Club over alleged surface and groundwater contamination.

The suit named PNM, its parent company, PNM Resources, Inc., BHP Billiton, Ltd. and the San Juan Coal Company as defendants.

“While we disagree with the suit’s allegations, we recognize there is value in a settlement that avoids further litigation and provides additional environmental benefits” said Pat Collawn, chairman, president and CEO of PNM Resources. “Rather than litigating the case, it is more prudent to settle and use the funds to invest in an additional water recovery system that would augment the current system and add value and functionality.”

The total estimated cost of the settlement is $10.2 million, of which about $4.5 million is PNM’s share.

PNM owns 46.3 percent of the plant and operates the facility on behalf of eight other owners.

Substantially all of the income statement impact related to this settlement was recorded in 2011.

Of the $10.2 million settlement, about $6 million would fund the new recovery system, $2 million would be used to fund other environmental projects and $2.2 million would pay for Sierra Club attorney and expert fees.

The coal company and other plant owners would contribute a combined $5.7 million to the total settlement amount.

The projects covered by the proposed settlement would be the largest investments in water protection since the 2007 construction of a groundwater recovery trench at the San Juan plant.

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