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Legislators discuss bill to help county after power plant closure
Draft measure draws criticism from local lawmakers
FARMINGTON — The local economy will face major challenges when the San Juan Generating Station closes, and several local residents are asking for more time to help prepare for that situation.
The generating station will likely close in 2022 because that date coincides with the end of its coal supply contract with the nearby San Juan Mine.
Shantel Cooper, a member of the Four Corners Economic Development board, said the area needs more time to prepare when she addressed the state Legislature's Water and Natural Resources Interim Committee during a Thursday meeting at San Juan College.
“We may not be able to get you time,” state Rep. Matthew McQueen, D-Santa Fe, said. “There’s a good chance we won’t be able to get you time.”
The decision about whether the generating station closes is up to the New Mexico Public Regulation Commission. But state legislators can intervene in the PRC case.
McQueen said the state may be able to get San Juan County economic development funds.
One option the state may consider is a securitization bill. A discussion draft was provided to the Water and Natural Resources Interim Committee during the Thursday meeting.
The measure would allow the Public Service Company of New Mexico, the majority owner of the power plant, to access low-interest bonds to pay off the debt it incurred in its investments into the San Juan Generating Station. The bonds would be sold on the public market, and PNM would be required to show that the company's customers would save at least 40 percent on their utility rates if the company used the bonds rather than traditional methods for recovering its investment money. Those methods could include passing on the costs to customers.
The bonds also would provide economic development funding to San Juan County.
The draft bill would allow PNM to use low-interest bonds to pay for $320 million of stranded costs — investments the company has made into the generating station that will not be recouped before 2022.
A percentage of those bonds also would help with local economic diversification efforts, and up to $30 million could be used for reclamation and decommissioning once the plant closes.
While the draft bill includes funding to help the San Juan County area, Rep. James Strickler, R-Farmington, said he will not be able to vote for it as it is written.
He highlighted a provision in the draft bill that requires the generating station not to emit more carbon dioxide than a clean energy source if it is reopened. The discussion draft defines the clean energy source as a clean gas plant or a coal plant with carbon capture and sequestration or conversion technologies.
Strickler said those technologies are too expensive for the generating station to be reopened. He said the bill would essentially kill the feasibility of a coal-fired power plant at that location.
Rep. Rod Montoya, R-Farmington, expressed disappointment that no local legislators were involved in drafting the bill that was presented to the committee Thursday.
The draft bill is still being revised, and the committee will continue discussion about it leading up to the legislative session.
Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at firstname.lastname@example.org.