The Energy Transition Act outlined a path away from coal. The first steps are underway
A community advisory group will develop a plan for investing funds that were made available through the Energy Transition Act
- Bill McCamley presented information about the new law to the Farmington City Council and San Juan County Commission.
- Jason Sandel emphasized that PNM will need to get bonds to fund the investments into the community.
AZTEC — There may only be three years left to prepare for the closure of the San Juan Generating Station, and the state is starting that process with a community advisory group.
This group will develop a plan for using funds made available through the Energy Transition Act to assist the community and workers that will be impacted by the power plant’s closure.
While the Energy Transition Act required the Department of Workforce Solutions, the Department of Economic Development and the Department of Indian Affairs to assemble community advisory groups, Workforce Solutions Cabinet Secretary Bill McCamley said the three state agencies chose to join efforts and create one large advisory group.
McCamley presented a brief overview of the Energy Transition Act and the state's next steps during a San Juan County Commission meeting and then a Farmington City Council meeting on July 23. The Farmington City Council meeting can be viewed online at fmtn.org.
The three state departments are each choosing a convenor. The convenors will set agenda topics and determine which people or groups need to be included in the conversation. The Energy Transition Act already specifies some types of people who must be included in the advisory group, such as representatives from the San Juan County municipalities and affected tribes as well as union representatives.
Taylor, Sandel to serve as convenors for community advisory group
The Department of Economic Development has chosen former state Rep. Tom Taylor, a Farmington Republican, to be its convenor on the advisory group.
Taylor said the group’s work will be important whether or not the power plant closes in 2022 because San Juan County has already faced economic challenges.
“I would imagine that there are a lot of things that are going to change in the next year and a half,” Taylor told the Farmington City Council. “The one thing that isn’t going to change is that previous to all this happening we lost about 6,500 jobs here in San Juan County. This is just insult to injury what’s going on with the plant. But really the serious injury that we survived started in 2008 when the natural gas prices went so low. So we have this big problem to start with and the fact of the matter is that it’s bigger than all of us to some degree. I’ve told a lot of people that we need to think about growing from here and not getting back to where we were because we’re not going to do that in the foreseeable future.”
Taylor said it is important for the group to focus on particular projects that will create infrastructure and lead to businesses for people to work in. He said the group must find ways to get new industries to locate in the community.
“It’s great to have a process where you can retrain people for jobs,” Taylor told the Farmington City Council. “But that means you have to have jobs in the community that you can train them for.”
He said that will require a lot of money and investment into infrastructure.
Meanwhile, the Department of Workforce Solutions has chosen former Farmington City Councilor and local businessman Jason Sandel to be its convenor.
“From my perspective, it’s about the community coming together and coming up with strong recommendations for how we are going to spring forward into a new economy,” Sandel said about the group.
The Department of Indian Affairs has not yet chosen its convenor.
Community assistance funding requires securitization
The Energy Transition Act created a financing mechanism that could help Public Service Company of New Mexico recover its past investments into the San Juan Generating Station. That financing mechanism — known as securitization — involves selling low-interest bonds. The sale of these bonds will also generate funds to assist impacted workers and communities.
However, the securitization must be approved by the New Mexico Public Regulation Commission. During a recent PRC meeting, the commission chose to hear PNM’s arguments for closing the San Juan Generating Station using a docket opened in January. One reason stated by Commissioner Valerie Espinoza was that the January docket would allow the PRC to hear the case without the Energy Transition Act applying. However, the order issued by the PRC following that meeting was unclear about whether the PRC would be applying the Energy Transition Act to the case.
Western Resources Advocates — a nonprofit environmental advocacy group — has filed a motion asking for clarification on that order.
Without the Energy Transition Act, PNM cannot sell the bonds that will generate the funds for the community.
Governor Michelle Lujan Grisham has said she is committed to ensuring the community and workers receive assistance, but it is unclear where that money will come from if the bonds are not sold.
Sandel criticized the PRC’s move while speaking during the County Commission meeting.
“Every hurdle that gets put into place preventing PNM from being able to (sell bonds) puts us further behind in being able to collect the money to be able to spend it to benefit the community,” he said.
He emphasized that the bonds are critical to providing assistance to the community and workers.
“It’s a little bit of a chicken and the egg,” Sandel said. “We can meet. We can come up with the best plan possible. The community can stack hands. We can be ready to move forward. But until those bonds are sold, there’s no money to be spent.”
There are different opinions about replacement power
One area that is being debated in the Energy Transition Act is the requirements for replacement resources.
PNM has created four separate scenarios to meet the various interpretations it anticipates could arise for the replacement resources.
The preferred scenario is a large natural gas power plant within Central Consolidated School District boundaries in San Juan County as well as solar farms in McKinley and Rio Arriba counties.
PNM has also created a scenario that looks at replacing all of the electricity from the San Juan Generating Station with natural gas power within the CCCD boundaries. This scenario would satisfy the interpretation that all 450 megawatts of replacement power be located within the CCSD boundaries.
San Juan County Commission Chairman Jack Fortner said that is how he interprets the Energy Transition Act and he hopes that is also how the state interprets the language in the law.
The other two scenarios do not include much replacement power in San Juan County and were created to satisfy various interests from the environmental advocacy community.
Farmington hopes to keep plant open
Councilor Sean Sharer said Farmington hopes its partnership with Enchant Energy will keep the San Juan Generating Station open after 2022. This would be done by investing about $1.3 billion to transform the power plant into a carbon capture facility.
“So when the state’s plan to destroy families — like the people who work at the mines and power plants — fails and we’re successful and keep this place open, what happens with the money?” Sharer asked.
Sandel said if Enchant Energy is able to convert the power plant into a carbon capture facility, a new plan will be developed for those funds.
Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at firstname.lastname@example.org.
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