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Shutdown approaches for New Mexico coal-fired power plant

Chain Fence
Credit: Photo by Jose Fontano on Unsplash

A coal-fired power plant in western New Mexico will be shutting down by the end of the year, and local officials are bracing for the economic consequences of the closure.

Tri-State Generation and Transmission Association announced the shuttering of the Escalante Generating Station near Grants earlier this year. Utility officials said during a virtual town hall that they’re working with local officials, businesses and economic development groups to mitigate some of the effects on McKinley and Cibola counties.

The plant has an annual economic impact of nearly $100 million and supports some 226 direct and indirect jobs. Tax revenues from plant operations total more than $3 million.

“Escalante is a big part of the local economy,” Tri-State CEO Duane Highley said during Tuesday’s meeting. “It‘s not possible to replace it, but we’re working to assist in the transition.”

Tri-State is pumping between $10 million and $12 million into employee compensation packages. It’s also providing $5 million in economic development assistance for local communities.

Two-thirds of the power plant’s 107-member workforce have been laid off, and about 30 more are facing termination by the end of the year. Peabody Coal Co.’s El Segundo mine, which supplies the plant, will lay off 50 workers in August.

“This is an emergency issue for me now,” Rep. Patricia Lundstrom said during the meeting.

The Gallup Democrat co-sponsored legislation earlier this year to allow counties with coal plants that are closing to create special economic districts with bonding and taxing authority to invest in infrastructure, business recruitment and retention to create jobs and promote economic development.

Lundstrom said officials are working to establish a special district at the Escalante site in Prewitt with a new industrial building to recruit new businesses.

Tri-State plans to build a 200 megawatt solar plant in Prewitt that will generate $25 million in local taxes over 35 years. That project will provide only a half dozen permanent jobs when it comes online in 2023.