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PRC decision looms regarding PNM's San Juan Generating Station replacement power

Hannah Grover
Farmington Daily Times

AZTEC — With Public Service Company of New Mexico preparing to end its use of the San Juan Generating Station, the New Mexico Public Regulation Commission must decide how the utility will receive its power in the future.

The PRC will likely rule on how PNM can replace the electricity currently generated by the San Juan Generating Station this month.

Commissioners say if a decision does not come on April 22 it will likely be made the following week.

PNM has proposed a mixture of natural gas generation as well as solar and batteries to replace the power it currently receives from the coal-fired power plants.

However, Commissioner Stephen Fischmann said he does not believe PNM did enough to find generation sources within Central Consolidated School District boundaries as required by the Energy Transition Act.

Fischmann requested that the case be discussed during the April 15 meeting prior to the PRC hearing examiners presenting their recommended decision to the commissioners on April 22. The PRC meets at 9:30 a.m. Wednesdays. Instructions about how to participate in the meeting will be posted on the PRC’s website.

Fischmann said he has read through much of the testimony from the case as well as the recommended decision.

“There were a couple of concerns that came up for me,” he said.

The future of the San Juan Generating Station will be a driving factor in decisions in 2019.

The PNM proposal calls for 280 megawatts of natural gas in the CCSD boundaries. All solar arrays would be located outside of San Juan County. The natural gas power plant would be closed after about 15 years.

Fischmann said he supports approving two power purchase agreements for solar power from arrays located in McKinley County and on Jicarilla Apache lands.

“I do think however, that the process that was followed was not particularly thorough in terms of honoring the (Energy Transition Act) legislation and in terms of focusing on getting bids that were looking closely at the school district area that was specified in the legislation,” he said.

Fischmann said when PNM sent out a request for proposals the utility did not clearly inform bidders of a preference for resources in the CCSD boundaries and did not ask for economic data.

He suggested requiring PNM to ask for revised bids for any other resources needed to replace the power plant. Fischmann said the revised request for proposals should require economic data as well as a preference for location inside the CCSD boundaries.

“If we don’t ask for them to do that, there’s no one else out there to do it,” Fischmann said.

The San Juan Generating Station is pictured, Thursday, Nov. 14, 2019, from the San Juan Mine.

The goal of the Energy Transition Act was to provide a mechanism to help utilities transition away from coal while also minimizing the economic impact to the communities where the power plants are located. Its passage was spurred by the possible closure of the San Juan Generating Station in 2022. It may also be used when PNM exits the Four Corners Power Plant.

It included the preference for locating replacement generation sources within CCSD boundaries as an effort to address the loss of property tax revenue the district will face if the power plant closes.

More:Does the Energy Transition Act require 450 megawatts of replacement power in CCSD?

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 PRC has already approved PNM’s application to abandon — or end operations — at the San Juan Generating Station. However, PNM’s plans going forward do not impact the City of Farmington’s ability to take ownership of the power plant and transfer that ownership to Enchant Energy. Enchant Energy hopes to retrofit the San Juan Generating Station with carbon capture technology to keep it open after 2022.

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

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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