February 8, 2018

New House bill would ease impact of power plant shutdown on county

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The San Juan Generating Station, flanked by its surface coal mines on the desert north of the San Juan River west of Farmington, New Mexico. Flickr cc

After a Senate committee last week poured cold water on a bill allowing Public Service Company of New Mexico to sell bonds to pay for the expenses of shutting down a coal-burning plant in San Juan County, a Farmington legislator has introduced a new bill aimed at easing the impact of the plant’s closure on county residents and government institutions.

House Minority Whip Rod Montoya, R-Farmington, told The New Mexican on Thursday that his legislation, House Bill 325, would require the state Public Regulation Commission to consider the economic effects on communities when deciding cases involving the shutdown of large power sources, such as the San Juan Generating Station.

The bill also would require a utility to build any replacement power source in the same community as the facility it is planning to close.

Many proponents of the original measure tied to PNM, Senate Bill 47, argued during a lengthy hearing Saturday that it would offer aid to residents of San Juan County who heavily rely on jobs at the power plant and a nearby coal mine that supplies it.

“The school district in Kirtland, New Mexico, gets about $37 million a year from the power plant,” Montoya said Thursday. “That’s about 45 percent of their tax base. Another eight percent comes from the coal mine, so that’s over 50 percent.”

Other local governments in the area also would be hurt by the plant closing, he said.

Montoya said his bill responds to complaints that the PNM bill would diminish some of the Public Regulation Commission’s power to regulate utilities. Under Montoya’s bill, he said, the commission would decide how much replacement power would be required following a plant shutdown, as well as which company would win the right to provide that power.

PNM would not be guaranteed selection to build new power plants.

The bill apparently has legs in the Legislature, which adjourns in a week. House Speaker Brian Egolf, D-Santa Fe, gave the measure only one committee assignment — a sign that legislative leaders are clearing a path for approval.

A spokesman for PNM said Thursday that the utility is not backing Montoya’s bill. “PNM is not affiliated with this bill and does not support it,” Ray Sandoval said. But he wouldn’t say whether the company will actively oppose the new measure.

PNM had strongly backed the bonding bill, arguing it would allow the utility to close the San Juan plant by 2022.

Leaders of two environmental groups said they are open to Montoya’s bill but want to review it before expressing a position. These are Mariel Nanasi, executive director of New Energy Economy, a clean-energy advocacy group, and Steve Michel of Western Resource Advocates.

Nanasi flatly opposed SB 47, saying it would give PNM a monopoly over renewable energy in the state.

Michel was part of a group that had negotiated with PNM over SB 47. Though he and other environmentalists won some concessions from the utility — including a requirement for PNM to supply 40 percent renewable energy by 2025 and 50 percent by 2030 — Michel said the version of the bill debated Saturday by the Senate Conservation Committee was not one his group could endorse.

The committee voted 5-4 to table SB 47, following a more than three-hour hearing, which drew a packed crowd to the Senate chambers. Though tabling usually means a bill is dead, committee Chairman Sen. Joe Cervantes, D-Las Cruces, encouraged PNM and the various parties to keep negotiating.

Cervantes is running for governor.

Michel said Thursday that there has been some discussions about the bill, but no real progress has been made in negotiations.

Contact Steve Terrell at 505-986-3037 or sterrell@sfnewmexica­n.com. Read his blog at www.santafenewmexican.com/roundhouse_roundup.