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San Juan Generating Station renewable energy plan gets approval from PRC

Hannah Grover
Farmington Daily Times

AZTEC — The New Mexico Public Regulation Commission unanimously approved a plan that would replace the electricity that Public Service Company of New Mexico currently receives from the San Juan Generating Station with 100% renewable energy.

These renewable resources include solar arrays and battery storage that will be located in San Juan, McKinley and Rio Arriba counties.

Commissioner Valerie Espinoza made the motion to approve the order drafted by general counsel Michael Smith. That motion was seconded by Commissioner Cynthia Hall.

Smith said the portfolio meets all the criteria specified in the Energy Transition Act, including locating 431 megawatts of replacement power in the Central Consolidated School District boundaries and investing $447 million into that school district in addition to the investment into surrounding communities in neighboring counties. There will be another $430 million of investment into Rio Arriba and McKinley counties. In addition, Smith said it has the least environmental impact and is cost-effective and reliable.

Espinoza called it a “win-win” scenario, something Commissioner Jeff Byrd disagreed with. Byrd said he still has questions about how reliable the 100% renewable replacement will be, but he still supported the plan.

“I do believe that this is the best bad idea that we have,” Byrd said.

The ruling came a little more than a year after PNM filed an application that called for a combination of natural gas in San Juan County and solar arrays with battery storage in McKinley and Rio Arriba counties.

"We are reviewing all options to implement this decision while maintaining reliable power for our more than 530,000 customers," the utility said in an email statement following the PRC meeting on July 29. "PNM is focused on strengthening our infrastructure to support the company’s transformation to a 100 percent clean energy portfolio. We are continuing to examine all options to optimize our future energy mix and invest in our infrastructure to ensure the reliability of new energy resources we integrate into our grid."

The 100% renewable portfolio that was approved by the PRC on July 29 was proposed by Coalition for Clean Affordable Energy.

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

Commission Chairwoman Theresa Becenti-Aguilar said the decision was a hard one. The decision leaves the door open for Enchant Energy to move forward with retrofitting the power plant with carbon capture technology.

“That’s the part that I like the most,” Becenti-Aguilar said.

She said her constituents in northwest New Mexico deserve a paycheck.

Enchant Energy Chief Operating Officer Peter Mandelstam praised the decision.

“Today’s unanimous vote after a very long and thorough process is a victory for New Mexico and the environment and Enchant Energy is very gratified that several of the commissioners in their remarks specifically said that they premised their positive vote on Enchant’s ability to move forward,” he said.

Nate Duckett

Farmington Mayor Nate Duckett said he was excited that the decision allows the city to move forward with its partnership with Enchant Energy to keep the San Juan Generating Station open after 2022.

He also viewed the solar array that will be built in San Juan County under the approved portfolio as a win for the community because it brings in temporary jobs as well as investment.

“This historic decision will benefit communities and generations in the Four Corners region for years to come,” said Robyn Jackson, energy outreach coordinator for Diné C.A.R.E., in a statement. “By unanimously agreeing to an all-renewables replacement of coal power with solar and battery storage within affected communities and the Central Consolidated School District, economic relief and renewal is possible. This decision is a solid investment in community health and future economic sustainability.”

The approved path forward would not locate the replacement resources directly at the San Juan Generating Station site, unlike the proposal that would have located natural gas generation at the power plant.

Report: As climate change contributes to drought, closure of coal-fired power plants may help

One of the solar arrays proposed would be in the Central Consolidated School District boundaries, which will preserve property tax revenue that the district depends on and currently receives from the San Juan Generating Station and its related mine.

The PRC decision will also provide investment into San Juan, Rio Arriba and McKinley counties.

County Commission Chairman Jack Fortner said that was one of the important factors for San Juan County. Fortner said the location of 430 megawatts of replacement power within the CCSD boundaries will help keep the property tax base intact for the district as well as the county.

"Obviously it doesn't replace the jobs," Fortner said. "But on the other hand it gives Enchant Energy the opportunity to go right in when PNM has to pull out."

While the decision will help maintain property tax revenue to the district and the county, Fortner said San Juan County will continue efforts to diversify the economy. This includes promoting outdoor recreation and trying to attract a petrochemical manufacturing company that could partner with the county to create a railroad spur to the Gallup area.

Plan draws mixed reviews

“Today is a huge day for our renewable, economic future,” said Sierra Club Rio Grande Chapter Director Camilla Feibelman. “The PRC decision shows that New Mexico can transition from dirty coal-fired energy to clean renewable energy, while providing investment and jobs for the impacted communities. The replacement power that the Commission approved will lead to thousands of construction jobs and $1 billion in investment in northwestern New Mexico. This is what the Energy Transition Act was intended to do: save rate payers money, move to renewables, help workers and communities transition all while investing deeply in the impacted community.”

More:Enchant Energy signs deal with Bank of America in San Juan Generating Station project

At left, New Energy Economy Executive Director Mariel Nanasi walks toward a sealed pond, on Monday, Oct. 28, 2019, while touring San Juan Generating Station in Waterflow.

But not everyone is celebrating this decision.

"Today’s decision shows exactly why we call New Mexico’s environmentalists radical. They are not satisfied with putting thousands of families out of work and draining millions from state revenues, it appears they won’t be happy until our country has lost our energy independence,” said Power the Future Western States Director Larry Behrens in a statement. “Forcing New Mexico to buy more solar panels from China not only puts our neighbors out of work, but also supports a country with an abysmal human rights and environmental record.”

Behrens said similar actions in Europe and California have led to higher electric bills and higher taxes. He said the jobs attached to the replacement power plan are temporary “but the damage from their actions are permanent.”

Larry Behrens

“The eco-left would have New Mexicans believe their renewable agenda is so affordable they need the government to force customers to buy it,” Behrens said.

Oftentimes natural gas is included as a stabilizing factor when utilities choose to transition away from coal-fired generation. PNM had argued that the natural gas was needed to provide reliability and stated that battery storage technology still needs to progress to provide long-term rather than short-term storage options. However, in past meetings the hearing examiners said there was enough evidence presented to convince them that the 100% renewable portfolio could meet reliability requirements.

When reached by phone, Feibelman acknowledged that the PRC decision does stand out in the utility world.

“This is an example of New Mexico leading,” Feibelman said. “This is a governor who demanded more of utilities than they ever thought they could do. This is a Public Regulation Commission recognizing that renewables, battery and efficiency are reliable. This is a region saying ‘we’re going to get ahead of the game on economic transition.’ This is an example for the entire country. New Mexico is leading. New Mexico is number one in a good way.”

Environmental advocacy groups celebrated the decision, which moves New Mexico closer to its goal of 100% clean energy.

Mike Eisenfeld

“We think it’s a historic decision for the Four Corners area and we’re very much in support of where this is going,” said San Juan Citizens Alliance Energy Coordinator Mike Eisenfeld.

Wendy Atcitty, the New Mexico energy organizer for Diné C.A.R.E., said in an emailed statement that the decision will also benefit the health of people on Navajo Nation.

"For decades, the Navajo Nation has been living in the shadow of San Juan Generating Station’s coal pollution sending energy to other communities," she said "The PRC’s decision today truly begins a Just Transition – we can lead the transformation to clean, renewable energy, bring opportunities and new jobs to our communities, and improve the health of our People."

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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