Ledes from the Land of Enchantment

State to decide before 2024 where to send $6 million for northwestern NM economic development

Setting up solar. Making housing more accessible. Boosting local food production. Starting up hydrogen energy productions. Expanding educational opportunities at local colleges.

These are all projects local, out-of-state and even international organizations are vying to set up in northwestern New Mexico to help communities recover from a massive coal plant shutdown that happened in 2022.

It’s up to the New Mexico Economic Development Department now to decide which initiatives to fund.

Dozens of community members, including Indigenous residents and environmental activists, waited hours at a public meeting on Oct. 12 for a chance to speak up about which of these organizations they want to see receive the money in San Juan County. 

Many expressed support for very local, Indigenous-led projects.

They spoke to a community advisory committee that was formed by the 2019 Energy Transition Act to help recommend how the state should spend funds the Public Service Company of New Mexico legally had to make available due to the closure of its coal plant.

The Energy Transition Act

Lawmakers passed the Energy Transition Act in 2019, which set a statewide renewable energy standard of 50% by 2030.

New Mexico’s electricity generation by coal from April 2022 to April 2023 declined by 26.1%, according to a Legislative Financial Committee report

Coal-powered electricity was 1.6% of total electricity generated in the state in April 2023 — about six months after the San Juan Generating Station’s full closure.

There’s a total of $20 million energy transition funds available. From that, the New Mexico Economic Development Department has about $6 million to distribute for non-fossil fuel-related development.

The community advisory committee recommended four companies for the state to reward the funds. These proposals are focused on either hydrogen, energy storage or coal ash reuse.

Many members of the public spoke against these projects.

The New Mexico Economic Development Department will consider the recommendations of the committee and reach out to lawmakers, stakeholders and the governor’s office to figure out how to best use the funds, said agency spokesperson Bruce Krasnow.

He said the department plans on choosing before the end of the year which projects will get funding.

The proposals

Source NM reviewed the project proposals submitted in 2020 that the state economic agency posted online. Funding requests range from hundreds of thousands of dollars to millions of dollars.

Twenty-six separate initiatives are seeking different ways to boost the local economy in the Four Corners county.

At last week’s public meeting, many community members said they want to see funding go to hyper-local, Native-led organizations.

About a dozen of the 26 projects are Indigenous-led or have collaborations with Native leaders or organizations. 

Even fewer are actually based within 100 miles of the inoperative San Juan Generating Station — the area supposed to reap the benefits of the energy transition funds — though many of the proposals have worked in or near San Juan County before.

Multiple projects propose pursuing renewable energy initiatives, educational opportunities that would create college courses or new teaching positions, or ways to boost food security, like creating local markets and co-ops.

The four organizations the community advisory committee recommends to equally split the $6 million are Big Navajo Energy, Kinetic Power, Libertad Power and SonoAsh.

Libertad, partly based in San Juan County, and Big Navajo Energy, based about 50 miles away in Red Valley, Arizona, would create hydrogen energy facilities. 

Santa Fe-based Kinetic Power is focused on hydroelectric energy storage, and Canada-based SonoAsh proposes reusing coal ash. All four projects would operate in San Juan County.

It’s still up to the state at the end of the day where to send the $6 million, and it could still pick from the other proposals the committee didn’t recommend.

$9.8M delivered to laid-off workers

The Department of Workforce Solutions is in the process of distributing $20,000 checks to people who lost their jobs due to the closure of the coal plant. An employee with the agency said at the meeting last week the department has allocated $9.8 million through around 450 checks so far.

In October 2022, only 8% of workers laid off from the coal plant had a new job, and 28% of people said they weren’t sure they were going to remain in the area, according to a voluntary survey from the workforce agency.

Community members and activists argued against the hydrogen-involved projects, bringing up the potential for greenhouse gas emissions or substantial water usage.

Eleanor Smith is a community organizer with Tó Nizhóní Ání (Sacred Water Speaks). She voiced concerns about the negative impacts hydrogen would have on the environment and climate. Smith (Diné) said they would support renewable energy developments like wind and solar instead.

“Here on Navajo, we have been decimated by the fossil fuel industry for decades,” she said. 

The tragedies continue today.

State-appointed convener Jason Sandel, an oil executive, said everyone has different interpretations if hydrogen energy is a form of fossil fuels. This echoes an ongoing national debate about potential negative environmental consequences following the Biden administration’s announcement last week dedicating $7 billion to hydrogen hub projects around the U.S.

New Mexico did not receive any of this funding for federally subsidized hydrogen hubs.

How clean hydrogen actually is depends on how it’s produced, and most hydrogen is made from fossil fuels, according to the U.S. Office of Energy Efficiency and Renewable Energy

However, the hydrogen companies the committee recommended last week have committed to using water rather than natural gas.

Many public commenters asked, where is that water coming in the southwest from during a drought?

Joseph Merlino, managing partner at Libertad Power, told Source NM that Libertad’s project wouldn’t actually be taking up that much water because the proposed system, which would produce around 15 to 30 tons of hydrogen per day, isn’t that big. He said the company is also exploring possibilities of pulling from non-freshwater sources, like municipal wastewater systems or greywater.

“It’s not that big a water contract. It won’t be a problem sourcing that water,” he said.

It’s understandable that people are unsure about hydrogen, Merlino said, especially since it’s a new technology.

“We certainly welcome scrutiny,” he said. “We’re always happy to have reasonable conversations with folks and answer questions about what we’re trying to do.”

A few different proposals not recommended by the committee would set up more solar energy in the Four Corners region. Native Renewables is one initiative multiple people supported last week. The proposal aims to set up solar for 500 families on the Navajo Nation using $12 million.

Wendy Atcitty is the Indigenous energy program manager for Naeva, a Native-led rights advocacy organization. Atcitty (Navajo) told Source NM a lot of people in northwestern New Mexico are living without electricity, despite living somewhere labeled as a “sacrifice zone.”

Many homes on the Navajo Nation, which takes up a majority of San Juan County, historically have lacked access to electricity.

“After decades of helping build the energy economy out here, it just doesn’t make sense,” Atcitty said.

Another proposal the committee didn’t choose to recommend was from Navajo Technical University, which had a goal to set up a program to train displaced coal plant workers in advanced manufacturing, transferring skill sets developed at the generating station. 

An employee with the university said at the meeting that although Navajo Tech wasn’t chosen, the school can find other avenues of funding. 

The much smaller, local organizations can’t, and that it is a “disservice to underfund” other community projects, he said.

Multiple community and committee members questioned how the four projects were chosen in the first place.

Sandel said these initiatives have a strong potential for leveraging the $6 million effectively for the community. He said the goal is to create long-term jobs, and he’s concerned that there isn’t longevity in other proposals submitted, like with the solar industry projects.

“I fully recognize and acknowledge and embrace there is an active conversation about what type of economic development is needed and wanted inside of the community, and that consensus might not be possible,” he said.

Kimberly Simpson, a committee member from the city of Bloomfield, tried to table action on deciding which projects to recommend, but nobody seconded the motion so it didn’t move forward.

The final vote to recommend the four projects was 5-2.

The vote

State-appointed conveners Sandel, Tom Taylor and Glojean Todacheene as well as San Juan County Commissioner Steve Lanier and San Juan College board member John Thompson voted to recommend the four companies.

Simpson and Joseph Hernandez voted against it.

Jeff Blackburn, Aztec city manager, and Warren Unsicker, city of Farmington director of economic development, abstained.

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