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PRC unanimously approves PNM ending operations of San Juan following meeting interruption

The PRC ruling will provide $40 million in assistance to workers and the impacted community

Hannah Grover
Farmington Daily Times
Two of the four units at the San Juan Generating Station have already closed as part of an agreement with the U.S. Environmental Protection Agency to cut emissions at the power plant.
  • The decision does not impact Farmington and Enchant Energy's plan to keep the San Juan Generating Station open through a carbon capture retrofit.
  • April 1 was the deadline for the PRC to issue a ruling on the application.
  • After shutting down the 9:30 a.m. meeting, the PRC reconvened and screened participants before letting them into the Zoom meeting.

AZTEC — After the initial New Mexico Public Regulation Commission was interrupted, the PRC reconvened its meeting and unanimously approved Public Service Company of New Mexico's application to end its operations of the San Juan Generating Station.

April 1 was the deadline for the PRC to make a ruling on the San Juan Generating Station abandonment case based on guidelines outlined in the Energy Transition Act. If it had not made a ruling, the application PNM filed on July 1 would have been deemed approved.

The PRC also approved a financing order that allows PNM to issue low-interest energy transition bonds as outlined in the Energy Transition Act that became law in 2019.

Those bonds include $283 million of refinancing of past investments into the San Juan Generating Station as well as $19.2 million for decommissioning of the power plant, $9.4 million for reclamation at the associated San Juan Mine, $20 million for job training and severance pay for workers at both the mine and power plant, $1.8 million for the New Mexico Indian Affairs Department, $5.9 million to a fund to help with economic diversification efforts in impacted communities and $12.1 million to help displaced workers.

More:Mayor says PRC hearing examiners' recommended decision in SJGS case is a positive step

Some of the money to assist power plant and mine workers will be available this year before the bonds are issued.

The energy transition bonds will be paid off by an energy transition charge on PNM customers' bills. For most residential ratepayers, that will be $1.90 monthly.

PNM Resources' Chairman, President and CEO Pat Vincent-Collawn said in an emailed statement that it is pleased with the commission's decision.

An employee watches screens inside the control room to ensure operations run smoothly at the San Juan Generating Station in this Sept. 25, 2019 file photo.

"Our customers, communities, and environment will benefit as we move to exit all of our coal-fired generation and replace it with lower-cost, cleaner energy resources," Vincent-Collawn said. "The use of securitization tool under the ETA provides $40 million to help workers and the communities affected by the closure. We will continue to look for the right opportunities to provide cost-effective, environmentally friendly energy to our customers."   

Enchant Energy COO praises PRC ruling

The PRC decision will not impact the ability of the City of Farmington to take ownership of the power plant following successful negotiations with the other owners. The city plans to transfer that ownership to Enchant Energy. The company hopes to retrofit the power plant with carbon capture technology and keep it open as a merchant plant, meaning it would sell electricity on the market to utilities in the western United States. The company would also sell carbon dioxide to be used in oil extraction or other industries.

Enchant Energy Chief Operating Officer Peter Mandelstam praised the PRC’s decision and said that it will help move the carbon capture project forward.

“Farmington and Enchant are pleased that this means that PNM and the other participant owners can now move forward with the transfer of the San Juan assets,” he said. “This is really the next logical step in the process to build carbon capture.”

Mandelstam said the coronavirus has not delayed the project and Enchant’s partners remain committed to the project.

Carbon capture critics have questioned the financial viability of the project as the oil prices have plummeted in recent months.

Mandelstam said the company has options in addition to enhanced-oil recovery and did anticipate wide fluctuation in oil prices. He added that even if the oil prices make it uneconomic to sell the carbon dioxide, Enchant Energy would still have the option to pump carbon dioxide into underground reservoirs for permanent storage. This would result in higher tax credits, but no revenue from the sale.

“Nothing about the current crisis puts this project in jeopardy,” he said. “Quite the contrary. We’re able to move through this current turmoil and finish developing this project and build it.”

Meeting interrupted 

The initial meeting at 9:30 a.m. was interrupted when a score of people who began playing music, cursing and speaking to the point that the PRC shut down the Zoom meeting.

The PRC was discussing Public Service Company of New Mexico’s application to abandon units one and four of the San Juan Generating Station.

Theresa Becenti-Aguilar

Chairwoman Theresa Becenti-Aguilar was speaking about San Juan County and about the coronavirus. She highlighted that both the county and the City of Farmington have passed declarations of public health emergency.

“As we are making a decision today, we are also dealing with an extraordinary time,” she said. "But we still have to move forward protecting the rights of the customers, PNM customers, their rights."

MORE:PRC set to issue final order April 1 in San Juan Generating Station case

A man interrupted and used a racial slur before saying "it doesn't matter, he doesn't have rights. Minorities don't have rights."

Becenti-Aguilar asked the man to identify himself and soon many other people were speaking at the same time or playing music. One person can be heard blowing their nose.

There were attempts to mute the interrupting parties but ultimately the PRC shut down the meeting.

MORE:Mayor: PRC examiners' recommended decision in SJGS case is positive step

In a phone call, Becenti-Aguilar said the PRC tried a different meeting ID and the meeting was sabotaged a second time.

"The disruption of the Public Regulation Commission meeting today shows us how vulnerable our democracy is to interference," said Camilla Feibelman, the director of the Rio Grande Chapter of the Sierra Club in an emailed statement.

"We applaud the PRC for attempting to move forward on the urgent business of taking action to address the climate crisis and to protect workers and communities. The Sierra Club condemns any individuals or groups that attempt to interfere with public processes. We also condemn the racist terms used in the hack." 

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