PRC delays vote on plan for San Juan Generating Station

James Fenton The Daily Times
The Daily Times

FARMINGTON — The state Public Regulation Commission has delayed voting on Public Service Company of New Mexico's proposal to shut down two coal-fired units and make improvements to two others at the San Juan Generating Station.

The regulatory body made the decision at a regular PRC meeting on Wednesday in Santa Fe.

PNM's plan calls for closing two of the four generating units at the Waterflow power plant in 2017 and retrofitting the other two with pollution controls to meet federal haze regulations. To make up for the closed units, the plan calls for added nuclear, natural gas and solar generation.

With a vote of 4 to 1 for the delay — Commissioner Valerie Espinoza, D-Santa Fe, voted against it — the commission gave PNM until July 1 to complete an ownership restructuring agreement for the power plant, as well as the utility's coal supply contract, and to submit finalized contracts to the PRC.

The decision also gives PNM until June 3 to request additional time to submit signed agreements with the coal company and new owners. If that request is granted, PNM would have until Aug. 1 to submit signed ownership restructuring and coal contracts to the commission.

At the meeting, District 4 Commissioner Lynda Lovejoy, D-Crownpoint, signaled her displeasure with PNM for causing delays. Lovejoy represents the northwest portion of the state, including San Juan County and the area in which the power plant resides.

"I strongly feel that PNM has not made a good-faith effort," Lovejoy said before a vote was held at the meeting, which was streamed online on the PRC's website.

She added that the plan's survival is up to PNM.

"I have high hopes that something good is going to come out of this case," Lovejoy said. "The people that are going to pull that plug (on the plan are) going to be PNM. It's not going to be the commission. It's not going to be the staff. It will be PNM. So you decide if you're going to pull the plug and devastate everything, or you come with what is needed in order for this commission to make a decision."

Despite her stern words, Lovejoy voted in favor of giving PNM more time to comply.

She released a statement Wednesday afternoon saying delays by the utility are frustrating and firm deadlines were set in place to render an informed decision on the plan.

"It is time to send a very stern message to PNM," Lovejoy said in the release issued after the meeting. "PRC Staff and this Commission have worked very hard in keeping with a standard time schedule to avoid unnecessary delays, and the piecemeal documents provided by PNM still are not producing the most important information up to this point."

PNM spokesman Pahl Shipley said in an email after the meeting that the utility "will carefully review the commission's order and decide how best to proceed."

Shipley reiterated that the revised plan, with new tentative agreements in place, represents "the most cost-effective path forward, balancing reliability, affordability and environmental responsibility. The ownership restructuring and coal supply agreements would further increase the cost benefit to customers."

Despite the PRC's comments of frustration, Four Corners Economic Development CEO Ray Hagerman said the body's decision was a positive overall.

"The commission, I think, realizes how important the potential job loss can be to our community," Hagerman said in a phone interview on Wednesday. "(Their decision) does indicate that the commissioners are willing to give (PNM) more time to get something meaningful that they can make a decision on."

Hagerman said if the utility supplies regulators with the documentation they need, then approval of the plan is likely.

"That they allowed additional time for PNM to get all the documents in place is a positive," he said. "I think that if PNM will indeed get these documents filed, as requested, the commissioners will have no choice but to vote for it."

Among the utility's critics who expressed displeasure with the PRC's decision on Wednesday was Santa Fe-based conservation group Juntos. Vicente Garcia, the group's director, said in a press release on Wednesday that the four commissioners' willingness to give PNM more time favored the utility over public interest.

"It is disappointing that a majority of the commissioners voted to put PNM's concerns above those of New Mexicans and give PNM yet another extension to finalize these contracts," Garcia said. "We know that New Mexicans care about how their energy is created. Now is the time for the PRC to act to meet our long-term energy needs by transitioning away from polluting energy sources to a future with clean air, clean water and a better New Mexico."

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621 and Follow him @fentondt on Twitter.