RATON, New Mexico (STPNS) -- Raton Public Service Company has been looking into alternative ways to provide electricity for the city while its coal-burning power plant sits idle as the utility is unable to find what it considers affordable coal.

Even if the right type of coal at the right price could be found, the "horribly inefficient' power plant still may not be worth cranking up again because of the money that would have to be put into upgrades needed to improve efficiency, as well as paying for a study required to meet current federal environmental permitting standards, RPS General Manager Glenn Fisher told the RPS Board of Directors at its June 26 meeting.



The board voted 4-0 at that meeting to submit to permitting authorities a notice of termination for a key permit for the plant. The permit - concerning the discharge of processed water from the plant - was up for renewal, but could not be renewed without first conducting an engineering study that Fisher said would cost $100,000.

Fisher said RPS can apply to get the permit back in the future, but he has his doubts about doing that. Fisher said he does not realistically envision the plant ever again burning coal. In order to attempt to efficiently burn coal, Fisher said, the plant would need $1.7 million in renovations. He added that even with that investment, he would remain uncertain how long the plant would operate before potentially being impacted by another problem that was not anticipated in the renovations.

He said the idea of converting the plant to be fueled by natural gas or biomass has been brought up in the past, but that would require the plant to be remodeled and new permits to be acquired.

Fisher said he has had "quite a few discussions" with public and private companies about the potential for meeting Raton's power needs by RPS buying electricity directly or purchasing equipment to generate its own power. In the last couple years, those discussions have included generation options such as solar, wind and natural gas.

However, Fisher cautioned the board that RPS can only go so far for now in investigating alternative power sources. As a member of the Arkansas River Power Authority (ARPA), Raton is contractually bound to buy from ARPA whatever electricity RPS cannot generate on its own. Fisher said RPS can request information from other providers, but cannot make agreements because that could be a violation of the ARPA contract. In addition to his discussions, Fisher said he plans to send out more-formal requests for information to various entities.

Fisher indicated the possibility exists that the relationship between ARPA and Raton could change significantly once a resolution to the current lawsuit involving the entities emerges. Raton is trying to limit its financial responsibility regarding ARPA's Lamar, Colo., power plant project, a project Raton has opposed as economically unfeasible, although the city commission, under pressure, approved of the initial $66 million for the project and another $10 million additional investment shortly after that. In the last few years, the project cost has grown to more than $120 million and the plant has yet to be brought online. The Raton commission has opposed any further money outlay for the project beyond the $76 million it approved earlier. The six other ARPA members - all from Colorado - have approved the additional money for the project.

A jury is scheduled to hear the lawsuit in federal court in Albuquerque beginning June 15, 2009. A settlement conference - standard practice in cases like these - has been set for Sept. 17 to gauge the potential for the two sides settling the case before it goes to trial.

RPS board member and City Commissioner Charles Henry abstained during the vote on the permit termination, saying he did not fully understand the intricacies of the matter. But he cautioned the board to be prepared if the lawsuit results in the end of Raton's relationship with ARPA, which currently supplies all of Raton's power.

"I'm extremely concerned that we have a plant for life after ARPA," he said.

Board Chairwoman Kathy McQueary agreed that a plan is necessary, but said the board must be "realistic" about the 48-year-old plant. McQueary added that "we have feelers out" regarding alternative power sources.

"I think we should look at everything, but we can only go so far," board member Scott Berry said of the limitations on RPS under the current ARPA contract.

The Raton plant began generating electricity in 1961. Fisher said "there was more life gotten out of that plant" than the average coal-burning plant.

In addition to gathering information about alternative power sources, Fisher said he will also look into potential federal grants and loans available to help utilities use renewable energy sources.

The Raton power plant stopped generating electricity in February 2006 after the coal source dried up and RPS was unable to find any other sources at similar prices.

Although the RPS board gave up its discharged-water permit for the plant, other permits - including the air-quality permit that was recently renewed for three years - are being maintained.