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As renewable energy and natural gas costs decline, it's harder to justify coal energy. Many utilities also are closing coal-generation plants in Indiana and elsewhere. Dwight Adams, dwight.adams@indystar.com

Governor Michelle Lujan Grisham says she's disappointed in PRC decision to hear the San Juan Generating Station abandonment case without applying the Energy Transition Act

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FARMINGTON — Governor Michelle Lujan Grisham said she is committed to ensuring San Juan County, the Navajo Nation and displaced workers receive $40 million in assistance if the San Juan Generating Station closes in 2022.

Her statement came after the New Mexico Public Regulation Commission voted to hear Public Service Company of New Mexico’s application to close the generating station in a court docket it opened in January. The PRC argued that using the January court docket would allow it to hear the application without being subject to requirements in the Energy Transition Act.

During the PRC meeting on July 10, Commissioner Valerie Espinoza said the commission needs more time than the Energy Transition Act allows to make an informed decision about PNM’s application to stop receiving electricity from San Juan Generating Station. The Energy Transition Act allows a maximum of nine months.

"I'm very disappointed in their decision," Lujan Grisham said while meeting with The Daily Times on July 11.

Regulatory commission: PRC says January case docket means Energy Transition Act doesn't apply to SJGS case

The PRC's decision created uncertainty about whether the Energy Transition Act would apply. Lujan Grisham maintains that the law still applies to the case despite the fact that a case docket was opened in January prior to the Energy Transition Act passing the legislature.

"I stand behind the law of the land, which is the (Energy Transition Act)," she said.

Energy Transition Act provides a mechanism to assist communities 

The Energy Transition Act was created to assist communities transitioning away from coal and to increase the amount of electricity utility customers receive from renewable sources.

It included $40 million of assistance to communities and workers, however that assistance is only available through a financing mechanism PNM is hoping to use called securitization. PNM hopes to use securitization to pay for its unrecovered investment into the San Juan Generating Station.

In addition to providing assistance to San Juan Generating Station workers, the Energy Transition Act allows PNM to use securitization to assist the San Juan Mine employees. The mine's sole customer is the generating station.

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

Without securitization, Lujan Grisham said the state would have to find another way of providing $40 million to assist the community and workers.

If the Energy Transition Act is not applied to the application to close the power plant, PNM will not be able to use securitization to recover its investment.

Lujan Grisham said her administration was committed to helping the workers and community before the law was passed and will remain committed no matter what happens at the PRC level. She said she expects the $40 million will be available one way or another.

"We're going to protect those workers and we're going to invest in the local economic development and we're going to make sure that there's an effective transition one way or the other," she said. "That is not a battle I'm leaving or taking for granted anywhere."

Lujan Grisham discusses proposal for carbon capture technology

Lujan Grisham also spoke about Enchant Energy’s proposal to install carbon capture on the San Juan Generating Station and keep it open after 2022. She expressed some skepticism about the possibility and said she has not seen anything concrete that would convince her not to anticipate the power plant shutting down in 2022. However, Lujan Grisham added that innovation is happening all the time.

About the proposal: Enchant Energy CEO says San Juan Generating Station carbon capture may cost $1.23 billion

"If there was a company — and we've got one that's saying they're interested, that's saying they're going to bring new technology — that can do that and make it a cost-effective effort, there's no one in my administration that's going to stand in the way of that effort for this community or any other one," she said.

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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