Kit Carson Electric outlines wastewater-fed green hydrogen project, seeks town land and effluent water

Kit Carson Electric Co‑op Chief Executive Officer Luis Reyes presented a multi‑site plan on Aug. 25 to build green hydrogen production and long‑duration energy storage near Taos, asking the town to negotiate land leases adjacent to existing solar facilities and to sell effluent water from the wastewater treatment plant.

Reyes said the project would use electrolysis to split water and store hydrogen for later electricity production through fuel cells or linear generators. ‘‘Green hydrogen is really through electrolysis,’’ Reyes told the council, distinguishing it from ‘‘blue hydrogen,’’ which he described as hydrogen from natural gas with carbon capture. He said Kit Carson plans three plants sized to local load and water availability: a larger site in Cuesta, a Taos wastewater‑adjacent plant, and a smaller project near Picuris Pueblo in Peñasco, with an initial 24‑hour storage design.

The co‑op framed hydrogen as the next step after local solar and short‑duration batteries. Reyes noted Kit Carson reached 100% daytime solar within its footprint in July 2022 and described hydrogen as a ‘‘long duration battery’’ that can store energy for months with lower loss than electrochemical batteries. He said the Taos project would be part of a larger award from the U.S. Department of Agriculture and that the overall federal program award cited by Kit Carson totaled about $231,000,000; Reyes said roughly $50,000,000 of that award is allocated for the Taos facility, which Kit Carson estimates would deliver 7.5 megawatts at that site and contribute to a 35‑megawatt portfolio across multiple projects.

Why it matters: Reyes and the council linked the project to local climate, resilience and economic goals. He said hydrogen and distributed microgrids could keep critical services operating during wildfire‑related de‑energization events and other extreme weather, and could help stabilize electricity rates over a decade by adding local supply. The co‑op also framed the project as an economic development effort that could create local jobs and partner with Taos Pueblo and local villages to purchase and deliver solar outputs into the hydrogen facilities.

Key details and limits: Reyes said the electrolysis process for the 7.5‑MW Taos plant would need about 20 acre‑feet of water per year based on water purity, and that the three‑project total might be about 150 acre‑feet annually; he added those volumes could increase if water requires additional treatment. He said Kit Carson has retained water experts, including New Mexico State University consultants, and an advisor (John D'Antonio) to navigate water rights and state engineering issues. The town manager and staff confirmed ongoing discussions with the state engineer and noted the need to assess how water sales would affect any existing Pueblo water settlement (referred to in the meeting as the Abeta settlement). Councilors and staff emphasized that those legal and settlement constraints must be resolved before any effluent sale or reallocation could proceed.

Regulatory and safety concerns: Reyes said the project is pursuing an environmental review and concurrent engineering, and Kit Carson has contracted safety and storage design studies; he said a contractor is doing a safety study and design to validate necessary safety measures. He described hydrogen as a very light gas that ‘‘will leak’’ and said designs focus on mitigation, ignition‑source control and coordination with first responders. Reyes said Kit Carson has long experience managing gaseous fuels (propane) and has started early outreach to local fire chiefs and first responders for microgrid sites including Taos Ski Valley.

Costs, schedule and funding: Reyes said the timeline anticipates construction starting in spring (he said ‘‘next spring’’) and bringing facilities online by 2028, but that federal tax‑related incentives and compressed procurement schedules make earlier orders preferable. He also noted component tariffs (steel, copper) are a scheduling and cost risk. Reyes said the USDA/ERA award and other federal support are part grant and part loan; he said details were still under negotiation and could not yet be disclosed in full.

Council response and next steps: Council members asked about water quantity, treatment and residuals (nitrate/sulfate brine) management; Reyes said Kit Carson is working with researchers to evaluate reverse‑osmosis and other treatment options and would report back when sampling and treatment plans are finalized. Town staff and the manager said the town will negotiate terms for land lease and water purchase, but repeatedly emphasized that any sale of effluent would need legal review against existing Pueblo settlements and state engineer requirements. Reyes offered to meet with councilors, staff and members of the public for further technical briefings.

Ending: Kit Carson requested the town’s cooperation on negotiating leases and effluent purchases and said the co‑op would return with further environmental, engineering and water‑treatment details as they are developed. The council did not take a formal vote at the workshop; staff were asked to continue discussions with Kit Carson and report back with legal and technical constraints.