Generating Station vote set for mid-December

James Fenton
The San Juan Generating Station as seen on Sept. 30 in Waterflow.

FARMINGTON — The state Public Regulation Commission on Monday set a date of Dec. 16 for a final vote on a case that likely will determine whether the San Juan Generating Station remains in operation.

The five-member commission heard testimony, during a meeting in Santa Fe, from a PRC hearing examiner on his 130-page Nov. 16 order recommending that the case be approved.

The case centers on a plan by Public Service Company of New Mexico, or PNM, to retire two units at the aging coal-fired generating station by the end of 2017 so the plant complies with federal regulations intended to reduce haze in the region. The lost power would be replaced by power from another of the plant's coal-fired units, from the Arizona-based Palo Verde Nuclear Generating Station, and from additional natural gas- and solar sources. The plan was developed as a compromise after utility officials said complying with federal Clean Air Act regulations would be too expensive and result in the plant's closure.

Ashley C. Schannauer, the hearing examiner for the PNM plan, said in the order that the amended plan is "fair, just and reasonable and in the public interest."

"I've read your decision," Commissioner  Patrick Lyons, R-Cuervo, told Schannauer at the meeting, which was broadcast as a live video feed on the PRC website. "I may or may not agree with it. But it's been a long process, and everybody certainly agrees to that."

The application requesting commissioners' approval was originally filed with the PRC nearly two years ago on Dec. 20, 2013.

Two exceptions to Schannauer's order were filed by the deadline, which was 5 p.m. Monday — one from Western Resource Advocates and the other, a 44-page exception "and request for oral argument," from New Energy Economy.

NEE, a Santa Fe-based environmental group, cited four "exceptions" to the plan, notably the uncertainty of costs the power-replacement plan represents over time as well as the lack of a more thorough investigation into further alternatives for the generating station.

"(PNM and Schannauer's recommendation) ask the commission to simply stick its head in the sand and assume, without proof, that more environmentally friendly alternatives ... are currently not feasible and available to PNM to satisfy its service needs after 2017," Mariel Nanasi, the group's executive director, said in Monday's exception.

Some of the commissioners voiced their eagerness to hold a final vote on the PNM case before the end of the year. PNM's coal supply agreement with Colorado-based Westmoreland Coal Company goes into effect Jan. 1, 2016. Westmoreland is also expected to finalize the purchase of the San Juan Mine, the sole supplier of coal to the generating station, by then.

Responses to the exceptions are due by Dec. 4, according to Carlos Padilla, PRC spokesman.

The commissioners asked Schannauer during the meeting whether a vote on the case could be scheduled as soon as Dec. 9, but settled on an additional week to ensure enough time to consider the new filings.

"They wanted to make sure that everyone will be here on the 16th," Padilla said. "It's too big of a case for anybody to miss."

James Fenton is the business editor of The Daily Times. He can be reached at 505-564-4621.