Activist groups ask if SJGS Unit 1 should be reinstated while facing imminent closure

PNM investigating silo structure failure that caused fire before putting Unit 1 back in production in mid-June

Megan Petersen
Farmington Daily Times
San Juan Generating Station is pictured on Friday, Dec. 22, 2017 in Waterflow.
  • Environmental group sees incident as opportunity to turn to renewable energy.
  • PNM spokesman said insurance will cover bulk of cost, and remainder will not fall to ratepayers.
  • PNM has plans to shutter coal-fired operations at SJGS in 2022.

FARMINGTON — A coalition of activist groups have filed a petition asking the New Mexico Public Regulations Commission to require an investigation into whether it’s worth it for the Public Service Co. of New Mexico to reinstate one of its two remaining coal-fired units after a silo fire in March and ahead of shutdowns scheduled for 2022.

Nine groups — including New Energy Economy and Diné Citizens Against Ruining Our Environment, as well as the League of United Latin American Citizens and Physicians for Social Responsibility — filed the petition on April 12.

The petition asks for an investigation into damage to San Juan Generating Station’s Unit 1 on March 17 after a structural failure in a coal silo caused a fire. The fire damaged a limited area surrounding the silo, and Unit 1 has been shuttered since the incident.

PNM announced plans in 2017 to end coal operations at the plant by 2022, and two units were shuttered in December before Unit 1 was damaged.

PNM spokesman Dan Ware said the company is performing inspections on the silos at the station that should be completed by May 30 so that Unit 1 can go back online by June 15.

The coalition of petitioners argues that investing to reinstate Unit 1, which has been in operation since 1973, “may result in unnecessary capital improvements and long-term stranded costs.”

The petitioners are urging the PRC to “be proactive so that an investigation, including an adequate cost-benefit analysis, be performed, so that only a prudent investment be made in SJGS Unit 1, and that after-the-fact imprudent findings will not result in unnecessary costs to ratepayers,” according to the petition.

However, Ware said the cost of reinstating Unit 1, which has not yet been determined, will not be passed on to ratepayers, saying insurance will cover the bulk of the cost.

“There’s a $2 million deductible, which will come out of our current operating budget, so this is not going to be passed on to ratepayers,” Ware said on April 17. “Ratepayers are not going to pay more because of this incident.”

But Diné CARE President Adella Begaye said the incident should be used as an opportunity to move toward renewable energy.

“We know that PNM will close the coal plant in 2022, thank goodness,” Begaye said in an April 12 press release. “Why should PNM spend more money propping up a polluting coal plant when we can use that same money creating Navajo jobs in solar. It doesn't make sense to invest in a coal plant that will close in three years when we can use those dollars to benefit our community long-term.”

Megan Petersen covers business and education for The Daily Times. Reach her at 505-564-4621 or