News Release

Feb. 9, 2007

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

San Juan Generating Station
Environmental Upgrade Project

Farmington: Last summer, construction began in earnest on an environmental makeover of the San Juan Generating Station that has already made measurable improvements in the environmental performance of the plant. The project is also creating jobs and injecting millions of dollars into the local economy.

“San Juan is critical to New Mexico’s energy infrastructure and by investing in it we are helping to ensure that we have the sustainable energy we need for the future,” said John Myers, vice president of power production for PNM, the Albuquerque-based utility that is the plant’s operator and one of nine owners.
The plant has been serving western communities for more than 33 years. Today, thousands of homes and businesses in New Mexico and elsewhere depend on the 1800-megawatt San Juan plant for electricity.

At power plants such as San Juan, coal is burned to create steam from water. The steam feeds into a turbine where it spins a series of blades. The blades spin a rotor inside the generator, a cylinder of copper wires that produces the electric current that is sent over transmission lines to towns and cities. The steam is condensed back into water that is reused many times over. Unless something is done to reduce emissions, the gases released by burning coal can carry particulate matter, nitrogen oxides (NOX), sulfur dioxide (SO2) and mercury.

Over the years San Juan has put systems in place to reduce those emissions and today meets or exceeds all applicable environmental requirements. By the end of 2009, when the construction of the environmental upgrades is complete, the pollution control equipment will reduce emissions of NOX by 35 percent below current permit levels, emissions of SO2 by 65 percent below current permit levels, emissions of particulates by 70 percent below current permit levels and emissions of mercury by approximately 75 percent.

The construction project is the result of a 2005 cooperative agreement between the Grand Canyon Trust, the Sierra Club, the New Mexico Environment Department and PNM.
“This is an enormous undertaking, but one that is well worth the effort,” said Myers.

The first improvement to be made was to the system for removing SO2. Limestone scrubbers were already removing 81 to 83 percent of the SO2 from the flue gas. Injection of an additive to the existing scrubbing system was initiated in 2006 and has resulted in 85 to 88 percent removal of SO2. By mid-2009, the SO2 removal rate will be no less than 90 percent.

Right now, work focuses on the installation of fabric filters, called baghouses, on Units 3 and 4, the largest units. The baghouses work like large vacuum cleaners to collect more than 99 percent of the fly ash and other particulate matter as the flue gas from the burning of coal passes through the filter material. Baghouses will ultimately be installed on all four units, replacing the electrostatic precipitators in place to remove particulate matter now.

A 600 ton crane, which at 387 feet tall is one of the world’s largest, has been called into service to help lift the 25’ by 33’ baghouse compartments as they are completed. Each compartment weighs approximately 78 tons, and 98 tons at the hook of the crane with lifting equipment and beams.

New low-NOx burners and overfire air will be installed on all four units that control the fuel and air mix, reducing the peak flame temperatures in the unit's boiler, resulting in less NOx formation.

Finally, the upgrades will include the installation of activated carbon technology. Activated carbon is finely-powdered carbon treated to make it highly absorbent. When the carbon is injected into the flue gas, mercury adheres to it and can then be collected in the baghouses.
The first unit to be completed will be Unit 4 in November 2007. The last unit will be completed in late 2009.

The plant has always been an integral part of the economic life and social fabric of San Juan County. Its employees, who live and work in the community, volunteer for community service projects throughout the year. The annual fire prevention week play has become a tradition for elementary school students.

PNM estimates this project will cost more than $270 million. At times during the project, the plant’s normal compliment of nearly 400 employees could double in size. Currently 180 additional construction workers are at work at the site. It is estimated that between 2006 through 2009, the project may generate a $16 million to $18 million in construction-related wages, and millions in local and state taxes.

“While it is hard to adequately describe a construction project of this magnitude and complexity, our goal is a simple one; a better environment,” said Myers.

PNM is a subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to 435,000 customers and natural gas service to 487,000 customers in New Mexico. The company also sells power on the wholesale market in the West. PNM Resources stock is traded primarily on the NYSE under the symbol PNM. For more information, see the company's Web site at PNM.com.