PRC scheduled to issue final order April 1 in San Juan Generating Station case

Hannah Grover
Farmington Daily Times
Steam billows from smokestacks, Monday, Oct. 28, 2019, at San Juan Generating Station in Waterflow.

AZTEC — A final order in the ongoing New Mexico Public Regulation Commission case related to the abandonment of the San Juan Generating Station is expected April 1.

The case stems from Public Service Company of New Mexico applying to abandon its interest in the power plant. That means, if approved, PNM would no longer operate the facility after mid-2022.

PNM’s announcement that it planned to cease operations at the power plant led to the passage of the Energy Transition Act in 2019. This case is the first time the Energy Transition Act is applied. The Energy Transition Act provides a mechanism know as securitization to refinance past investment into the plant and to recover the costs of closing the power plant, including decommissioning, using low-interest bonds.

The hearing examiners have recommended that the PRC approve both the abandonment application and the securitization application. They stressed that approving abandonment does not mean the power plant will close. Farmington and its partner, Enchant Energy, could continue operating the San Juan Generating Station following a carbon capture retrofit.

The PRC commissioners’ main concerns when the hearing examiners presented the recommended decisions during the March 18 meeting were the impacts on ratepayers.

The San Juan Generating Station is seen, Friday, Nov. 9, 2018, from Twin Peaks in Kirtland.

One of the concerns expressed centered on the energy transition charge that all customers will have to pay if securitization is approved. This is a non-bypassable charge on each customer's bill for 25 years. 

The money generated by that charge will be used to pay the bonds. If securitization is approved, the PRC will have little control over the energy transition charge. PNM will be required to file information about the bonds and the energy transition charge every six months, and the PRC could choose to adjust the utility's base rate during rate cases if it finds the utility is not using the revenue from the energy transition charge in a prudent manner.

The PRC meeting can be viewed online at

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

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