Kit Carson Electric Cooperative has tightened its timeline for a proposed $231 million project to build three green hydrogen production, storage and fuel cell facilities in Taos County. The largest of the three proposed facilities, in Questa, is proposed to break ground by Dec. 1, 2025.
According to co-op CEO Luis Reyes, the changed priorities in the White House with respect to green energy tax credits was the main driver to move quickly — and things are in flux due to the federal budget reconciliation process.
“No one knows how they’re going to reconcile this, but given the best information we have, the message from Congress is: You have to break ground this year, and if you break ground this year, you’re probably eligible for all the tax credits.”
The new timeline was discussed over the first two days of the state Legislative Finance Committee ‘s meetings in Taos, which began Monday (June 23).
“If we can break ground by Dec. 1 of 2025, Kit Carson will be eligible for about $150 million in hydrogen and solar credits,” Reyes told the committee. “That’s a lot of money to basically to leave on the table that currently is in play.”
Some committee members went on a field trip to the Village of Questa, where Reyes, Village Mayor John Ortega and Dr. Pei Xu, a professor of civil engineering at New Mexico State University with a PhD in hydrosciences, spoke in front of the municipal offices.
The trio answered questions and gave a tour of land abutting the proposed Questa facility, next to the Vistas de Questa trail access to the Rio Grande del Norte National Monument.
The intended site is as far from town as possible, on land not fit for much else at this time, as it’s a federal Superfund site. Before the molybdenum mine east of Questa closed, Chevron and prior owners piped tailings from the mine to ponds west of Questa. Not only is the hydrogen facility proposed to go atop or adjacent to the brownfield, it would use treated effluent from the shuttered mine’s massive wastewater plant.
Reyes said he is currently in negations with Chevron for access to the land and the wastewater.
“Our goal is to use the wastewater out of the Chevron plant,” he said. “So from Questa, 5 or 6 miles east is the abandoned mine that is full of water. They pump out about a million gallons a day and treat it, and they’ve indicated to us they have 40 years of water.”
Ortega, Reyes and Xu also spoke on a panel in front of the committee in Taos Tuesday morning (June 24).
Xu told the Legislative Finance Committee why the Questa facility would be “green.”
“The hydrogen produced through the electrolysis process, basically it is a water [molecule] splitting under the electrochemical process. We use 100 percent renewable energy, then we generate green hydrogen. So green hydrogen is very environmental, sustainable, and it does not emit any greenhouse gasses, and that is the key topic for New Mexico,” she said.
“We don’t want to compete with our residential uses, drinking water or agricultural water,” Xu added. “So we can use the alternative water, such as municipal wastewater, brackish water.”
The Village of Questa went before the LFC to ask for help obtaining $50 million to acquire land and build a solar array on land abutting the proposed co-op site in order to provide solar power to electrolyzer machines which will split treated wastewater into hydrogen and oxygen.
“We’re looking for funding over a two to three year period, not just $50 million in one,” Ortega told the Taos News. “So it could be $17 million a year over three years, or $25 million over two year.”
Reyes said the co-op would move towards the December groundbreaking whether Questa was successful in that mission or not. Plus, he said, there are backup plans.
“We’re already looking at a Plan B,” Reyes told the Taos News. “If the legislature didn’t appropriate this money, then we’d have to go and find another solar project somewhere in the region that was just recently built, and then we could use that power.”
Doing so would cost Questa hundreds of jobs that will come with the facility’s construction.
Ortega said in “the long term, there will be at least 30 good paying jobs, and the constant, hopefully, revenue stream for the village.”
The proposed new solar array, which would provide energy for the hydrogen facility, presents a rare opportunity, Ortega said.
“The area that we’re at is not contaminated, but the EPA has told us that land can never be used for anything else,” he said. “They can’t have housing, they can’t have a golf course or RV park — but it can be used for solar energy or for green energy.”
He also suggested the State of New Mexico could expect to recapture 50 percent of the $50 million, if they award it, through GRT funds generated by the facility’s construction buildout.
During the committee hearing, District 4 state Sen. George Muñoz questioned whether KCEC was rushing by asking for funding before the facility had been fully designed and permitted, as this would be the first facility of its kind in the U.S.
“The approvals are not there,” Muñoz said. “The permitting system’s not there. We don’t know what it’s going to look like. These are all bigger questions than putting the cart before the horse a little bit.”
Reyes said he will need permits from the village, which is a partner, and “we probably need an air quality permit and a water discharge permit from the [New Mexico] Environment Department. We’ve already started discussions with the Environment Department a year-and-a-half ago, so we do have a path forward of how they’re going to handle the permitting process.”
Additionally, Gov. Michelle Lujan Grisham supports the project, Reyes said.
“The governor actually introduced hydrogen legislation for blue hydrogen,” he said. “It was defeated by the legislature. But this has been a energy goal of the Governor’s office for about three years.”
Local legislators like District 6 NM Sen. Roberto “Bobby” Gonzales, District 42 state Rep. Kristina Ortez and District 41 NM Rep. Susan Herrera, as well as LFC Chair and District 36 state Rep. Nathan Small from Doña Ana County, told the Taos News they supported the co-op’s plan.
Gonzales in particular said the timeline should not be a problem because so many forces are aligned in support of the project.
“I feel very confident that it’s doable,” Gonzales said. “I think everyone is excited. They want to see it, but I really feel positive that it will happen.”
Ortez said the opportunity simply was too good to waste.
“This is huge, and we need to do it,” she said. “This has the potential to take care of our clean energy future, to reduce rates eventually. And it’s clean energy, and we have to try it.”
Reyes is more optimistic than ever about the project’s prospects because of the co-op’s track record.
“We built a broadband network from scratch, which now we have more customers than the incumbent telephone company,” he said. “From scratch, we built a propane company, and now we probably have more customers than any propane company.
“This, of course, is more complex and more challenging,” Reyes admitted. “But yeah, we’re not gonna be denied.”
