Local lawmakers seek to extend San Juan Generating Station's life

Hannah Grover
Farmington Daily Times
San Juan Generating Station is pictured on Friday, Dec. 22, 2017 in Waterflow.

FARMINGTON — The pending closure of the San Juan Generating Station has been a wakeup call for legislators across the state. Lawmakers from across New Mexico have introduced legislation that would assist communities as fossil fuel industries or power plants leave.

Among these bills is a measure that would require Public Service Company of New Mexico, the majority owner of the power plant, to keep the San Juan Generating Station open for at least seven more years if the utility wants to use low-interest bonds to finance closing the plant.

These bonds would be paid off by ratepayers through a non-bypassable charge on their bills.

The bill is sponsored by Rep. Rod Montoya, R-Farmington, Rep. Paul Bandy, R-Aztec, Rep. James Strickler, R-Farmington and Rep. David Gallegos, R-Eunice.

MORE:Two bills would provide financing mechanism for closure of San Juan Generating Station

It is one of three separate bills that would allow PNM to apply to the New Mexico Public Regulation Commission for permission to fund the closure with low-interest bonds, a process that is known as securitization.

State Rep. Paul Bandy, R-Aztec, is among four local legislators sponsoring legislation aimed at extending the life of the San Juan Generating Station.

The environmental advocacy group Conservation Voters of New Mexico compares securitization to refinancing a home loan at a lower rate.

In addition to requiring the power plant to remain open longer, the local Republicans' bill would require PNM to give San Juan County $50 million if it closes the plant earlier than 12 years after receiving permission to use securitization or to stop receiving power from the generating station.

The other bills include the Energy Transition Act, focused on statewide transformation of the electrical grid, and the Ratepayer Relief Act, focused on ensuring securitization is the best way to keep utility rates low. The Energy Transition Act was drafted with input from Gov. Michelle Lujan Grisham.

Proposal to extend life of power plant faces backlash

Mariel Nanasi, executive director of environmental advocacy group New Energy Economy, said she likes some aspects of the bill sponsored by the local Republicans, but she cannot support it because it seeks to extend the life of the power plant.

“We’re facing a climate crisis,” Nanasi said.

While PNM plans on closing the San Juan Generating Station in 2022, local leaders argue that it has not reached the end of its useful life and say closing it in 2022 will severely impact the Four Corners’ economy.

In addition, the closure will lead to hundreds of jobs lost and a significant reduction in property tax revenue that the Central Consolidated School District relies upon. Two of the three bills attempt to address the loss of property tax by requiring PNM to building 450-megawatts of replacement power in the CCSD boundaries.

PNM chose 2022 as the year it would close the power plant because the coal supply contract it has with San Juan Mine expires in summer 2022. A new contract would have to be negotiated if the power plant remains open.

RELATED:How San Juan Generating Station went from powerhouse to possible closure

Nanasi said she agrees that something needs to be done to address the impacts closing the generating station will have on the county, but she does not support having it attached to the securitization bill.

“I do believe that there are very serious questions about reparations,” she said.

Coalition of Native American groups and allies protest Energy Transition Act

A coalition of Native American groups and their allies delivered a letter Friday to state leaders stating opposition to the Energy Transition Act and including a list of amendments they would like to see. Shiprock Chapter President Duane “Chili” Yazzie and Council Delegate Daniel Tso were among the people who signed the letter.

Shiprock Chapter President Duane "Chili" Yazzie was among the signers of a letter delivered to state leaders in Santa Fe on Friday opposing the Energy Transition Act and seeking amendments to it.

These amendments include increased tribal consultation, including additional hearings regarding economic development plans in impacted Navajo communities.

In addition, the letter asked for funding for roads and electricity in tribal communities near the San Juan Generating Station as well as funds for renewable energy programs at tribal colleges and money to install solar panels at schools and chapter houses.

The letter expressed opposition to replacing the coal power with nuclear power and to allowing PNM to own all of the replacement power generation sources. The groups requested PNM pay a share of the cost of shutting down the generating station rather than passing it all onto ratepayers.

MORE:Town hall meetings for Navajo Generating Station scheduled

The letter also requested money for three studies including a study of decommissioning and reclamation costs, a comprehensive health and needs assessment and a transmission study to determine if the existing power plant site can be repurposed for other types of electrical generation.

Separate bill would create a blueprint for assisting communities

Angelica Rubio, D-Las Cruces, said over the past few years she has been hearing how the low-income rural communities will be impacted by the decline in fossil fuels. She said these communities are unsure what their role will be in the transition to renewable energy.

Rubio and Rep. Javier Martinez, D-Albuquerque, have co-sponsored a bill that would provide up to $200,000 for a study on how to assist these communities.

Rubio said her goal is to have a blueprint created that includes recommendations for education and job training and identifies disadvantaged communities that the state can help prepare.

“We have to look at every New Mexico family, not just a few,” Rubio said.

RELATED:Hesperus-area coal mine seeks to expand underground operation


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