Rep. Allison introduces bill to mitigate impacts of closing power plants

• The bill would establish a fund with $7 million to assist in economic development.
• It also establishes a $3 million fund to help employees who lose their jobs as a result of the closure.

FARMINGTON — State Rep. Anthony Allison, D-Fruitland, spent more than 37 years working for coal mines and has family members currently working in coal mines.

Now he is sponsoring a bill to help mitigate the impacts of closing the San Juan Generating Station and San Juan Mine.

The bill would require a utility that is planning on closing a power plant to replace it with a new generating facility within the same school district.

In addition to requiring replacement power facilities to be built within Central Consolidated School District boundaries, Allison’s bill would establish an Energy Transition Economic Development Assistance Fund. The fund would consist of $7 million to assist in economic development. It also establishes a $3 million Energy Transition Displaced Worker Assistance Fund to help employees who lose their jobs as a result of the closure.

Allison said his interest in transitioning to renewable energy and his concerns with the pending closure of the San Juan Generating Station and San Juan Mine prompted him to sponsor the bill.

The San Juan Generating Station is owned by a partnership of utilities, however Public Service Company of New Mexico is the majority owner and will be applying soon to close the generating station in 2022.

“I feel that it is very necessary to make (PNM) a part of the solution before they totally step away from this area,” Allison said.

Closing the power plant and mine will lead to reduced property tax revenue in the Central Consolidated School District as well as job losses throughout the region.

PNM receives 450 megawatts of power from the San Juan Generating Station. Allison’s bill would require the utility to build 450 megawatts of replacement power within the CCSD boundaries. It also requires the replacement power to be as clean as possible.

He said if PNM chooses to pursue a solar array he would like to see it built at the existing generating station or mine site.

“They could be in the reclamation process while they are building the solar panels,” he said.

Allison said he hopes replacing the 450 megawatts with new generation facilities in CCSD will replace 100 percent of the property tax, but he does not know if that will happen.

“A high percentage is better than none,” Allison said.

Bill could have impacts for utilities statewide

Gov. Michelle Lujan Grisham has called for higher renewable portfolio standards. If increased renewable portfolio measures are passed by the Legislature, utilities statewide will need to replace fossil fuel generation with renewable sources. Allison’s bill would require them to build replacement generation facilities within the same school district as the closing facilities.

There are various bills that have been introduced that would raise renewable portfolio standards. The most recent one to be introduced is the Energy Transition Act. This bill was drafted to help PNM recover investments into the San Juan Generating Station and to fund the utility’s transition away from coal power using low-interest bonds called energy transition bonds. It calls for utilities like PNM to receive 100 percent of their energy from renewable sources by 2045.

The bill is co-sponsored by Sen. Jacob Candelaria, D-Albuquerque, and Rep. Nathan Small, D-Las Cruces. 

Energy Transition Act includes funding for community assistance, plant decommissioning

The Energy Transition Act also includes up to $30 million in funding for plant decommissioning and mine reclamation and up to $20 million for severance and job training for employees that will lose their jobs at the mine and power plant.

Like Allison’s bill, the Energy Transition Act would create an energy transition economic development assistance fund and an energy transition displaced worker assistance fund.

The bill calls for 1.65 percent of the energy transition bond revenue to go to the economic development assistance fund and 3.85 percent of the revenue to the displaced worker assistance fund.

Like Allison's bill, it would require replacement generation to be built in CCSD boundaries.

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