Document calls for closure of power plant in 2022

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FARMINGTON — The New Mexico Public Regulation Commission has accepted the integrated resource plan filed by the Public Service Company of New Mexico in 2017.

The plan generated controversy because it stated that closing the San Juan Generating Station when its coal supply agreement ends in 2022 is more cost effective than continuing to operate the coal-fired power plant.

“The reason it is controversial is it is going to cause a tremendous, tremendous economic impact and hardship in the Four Corners,” Commissioner Lynda Lovejoy said during the PRC meeting today in Santa Fe. The meeting was streamed live on nmprc.state.nm.us.

While the commission accepted the plan, the order approved today does not mean it has approved the closure of the generating station. Instead, it means that the PRC found that the electric utility had complied with the rules regarding drafting an integrated resource plan.

County commissioner decries decision

Local leaders opposed the plan and argued that acceptance will pave the way for the power plant closing.

"We are deeply disappointed that the PRC approved the PNM IRP," San Juan County Commissioner Jim Crowley said in a statement. "This decision potentially brings us one step closer to the drastic property tax increases, devastating job loss, over $50 million in annual tax revenues lost statewide, potential school closures and increased school busing all caused by PNM's plan to prematurely close the San Juan generating station and mine. This is particularly shocking given that PNM promised the community it would keep the plant open for at least 20 more years."

Crowley was one of the local leaders who attended the PRC meeting. The county supported PNM's plan to close two units to comply with emission standards under the assumption that it would allow the generating station to remain open.

"However, our fight is not over," Crowley said. "We are working closely with our legislative delegation to collaborate with the Legislature and governor to at least study the local and statewide impacts and implement a transition plan to help both our community and the state mitigate these impacts."

He asked for the community's help and support during the upcoming legislative session.

Crowley explained that the closure of the San Juan Generating Station has statewide impacts in addition to the loss of tax revenues. He said it could impact the electric rates PNM customers pay. Crowley asked people to encourage friends and family members statewide to contact their state legislators.

Integrated resource plans are not required to examine economic impacts

Electric utilities are required to draft integrated resource plans every three years, and the next PNM integrated resource plan must be filed with the PRC in 2020.

The commissioners stressed that the integrated resource plan process does not require PNM to examine the economic impacts of closing power plants.

PNM will be required to file an application for abandonment of the San Juan Generating Station if it chooses to pursue closing the power plant.

Commissioner Cynthia Hall said the economic impacts will be considered during the abandonment process. She said the commission likely will hear an application for abandonment of the San Juan Generating Station prior to PNM filing its next integrated resource plan.

While economic impacts will be considered in the abandonment proceedings, Lovejoy encouraged the PRC to look at the integrated resource plan rules and consider adding in economic impacts.

“I believe it’s very important to re-examine the IRP rule,” Lovejoy said.

PNM is also considering leaving the Four Corners Power Plant

In addition to announcing the potential closure of the San Juan Generating Station, the integrated resource plan states PNM will consider leaving the Four Corners Power Plant when that coal purchase contract expires in 2031.

“The elephant in the room here is really pretty simple,” Commission Chairman Sandy Jones said. “We have a big push nationally to close coal plants and move on.”

He said the economic impact will be devastating to local economies, including the Navajo Nation.

Prior to the vote, Jones spoke about the people who will be impacted if PNM files for abandonment and the incoming PRC commissioners approve the closure of the San Juan Generating Station.

“There’s a face behind every decision we make here,” he said.

He said people who lose their jobs or whose house values plummet as a result of closing power plants are not given a voice in the proceedings.

“I hope at some point in time we talk about their stranded assets,” Jones said, referencing the term used for investments into a power plant that the utility will not have recovered at the time it closes the facility.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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