News Release

Aug. 26, 2003

Environment Department, City of Santa Fe and PNM
Reach Agreement on Groundwater Cleanup

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NEWS MEDIA CONTACT Susan Sponar Telephone: (505) 241-2768

Albuquerque: The New Mexico Environment Department (NMED), the City of Santa Fe and PNM today announced an agreement to ensure drinking water produced by Santa Fe Well will continue to meet federal drinking water standards for the foreseeable future.

"We are very happy that the three parties, NMED, PNM and the City of Santa Fe, were able to come an agreement that will ensure Santa Fe's drinking water remains protected," said New Mexico Environment Department Secretary Ron Curry. "By signing this agreement, PNM has acted as a good environmental citizen. We look forward to continuing to work with them in the future."

"This agreement shows we can set aside differences and work for the clear benefit of the citizens of Santa Fe," said PNM Vice President Melvin Christopher. "Due to our ongoing cleanup effort, water from Santa Fe Well has been and will continue to be safe to drink. Water production will also increase as a result of this agreement."

Under the agreement, PNM will continue to operate a wellhead remediation system in place since 1998 that is removing gasoline and chlorinated solvents from water produced by Santa Fe Well, which is part of the city's municipal water supply. PNM also will install an extraction well and two additional monitoring wells to improve monitoring and speed groundwater cleanup.

The Santa Fe Well is adjacent to a 16-acre parcel of land owned by PNM that was formerly the site of a fuel oil-fired power plant that produced electricity for PNM customers from 1952 until the early 1980s. The parcel and well are near Baca Street and Cerrillos Road.

The source of the contamination has been in dispute. According to PNM, there are as many as 84 potential sources within a one-mile radius that could have contributed to the contamination. These include heavy industrial users as well as light industry like gas stations, dry cleaners and other businesses.

Despite uncertainty over sources of the contamination, NMED, the City of Santa Fe and PNM have agreed on a course of action to ensure water from the Santa Fe well will continue to meet federal drinking water standards and be safe for the citizens of Santa Fe for years to come.

The Santa Fe Well has been a source of drinking water in Santa Fe for decades. In the late 1980s, water samples showed contamination in the area by gasoline and chlorinated solvents. The well was shut down after that discovery.

In 1996, while disagreeing on the source of the contamination, NMED and PNM agreed that PNM would install and operate a wellhead treatment system and a bioremediation system. Once those systems were operational, and the drinking water met EPA standards, production began again at Santa Fe Well. PNM has spent more than $1.5 million on the cleanup so far.

PNM's remediation systems have dramatically reduced contamination in the area. However, NMED is concerned that significant areas of contamination still exist that could impact the Santa Fe Well.

Under the agreement, PNM will continue to operate the existing remediation systems for the life of the well or until concentrations of the contaminants meet standards. The groundwater remediation systems presently treat all water produced by the Santa Fe Well, or about 130 gallons of water per minute. PNM will also install an extraction well, which may increase water production by up to 50 gallons per minute, and two new monitoring wells. The new agreement is expected to cost PNM about $1.5 million during the next ten years.