The Public Regulation Commission voted unanimously Wednesday to approve PNM’s application for abandoning the San Juan Generating Station and using securitization bonds to recover some of the investment PNM will lose in the process.
The decision, which was widely expected, came after the state Supreme Court ordered the PRC to apply law changes made by the Energy Transition Act towards PNM’s exit of the coal-fired plant.
The ETA, which requires all the state’s utilities to transition to “net zero” electricity generation by 2050, enabled PNM to use securitization as a mechanism to help pay for its transition away from coal.
But PRC commissioners were previously hesitant to apply the new law to PNM’s plans for exiting the San Juan Generating Station. PNM announced its plan to close the plant in 2017, but didn’t submit the application to do so until after the ETA was in effect.
The PRC’s decision was widely lauded by a coalition of clean energy and environmental justice advocates who say the securitization will reduce customers’ utility bills, provide financial support to the coal-dependent communities in San Juan County, and help create new clean energy jobs.
“The economic assistance provided by the ETA and the lower electricity rates that will come when the plant closes are important to help support New Mexico families, businesses, and communities amid the current pandemic and economic downturn,” the coalition said in a statement.
“As PNM transitions to cleaner energy, the closing of San Juan Generating Station provides an opportunity to fundamentally re-define economic development to incorporate renewable energy in the Four Corners Region,” said Mike Eisenfeld, the Energy and Climate Program manager for the San Juan Citizens Alliance. “This decision by the PRC is progressive in identifying that coal-impacted communities need transition planning and resources now.”
PNM is now waiting for the PRC to make a final decision on how PNM can replace the power generated at the San Juan plant after PNM exits the plant. The commission has until October to make that determination.