Unions representing San Juan Generating Station and San Juan Mine employees asked the state for about $6 million in energy transition funds to reimburse displaced workers for the out-of-pocket health insurance costs they have faced since being laid off. The funds would come from the New Mexico Department of Workforce Solutions.

This is especially important for the mine workers who lost health insurance at the end of the month that they were laid off. Power plant workers, on the other hand, have six months of health insurance following layoffs.

Layoffs at the mine began last year as the facilities prepared to close.

Stephen Curtis, a lawyer representing the unions, said that work at both the mine and the power plant was both dangerous and hard on the body. He said the loss of health insurance is one of the factors driving laid off workers to either leave the community in search of work or to accept “dead-end” jobs.

The energy transition funds come from securitized bonds that Public Service Company of New Mexico plans to issue to essentially refinance the past investments into the power plant. While PNM has not yet issued the bonds, it provided the $20 million to the state this summer. 

The Energy Transition Act of 2019 created the mechanism for PNM to access securitized bonds and required a portion of those funds to go to three state departments—Economic Development, Workforce Solutions and Indian Affairs—to benefit the communities and workers directly impacted by the power plant closure.

Of that funding, $12 million is available through the Department of Workforce Solutions to assist displaced workers. 

The Energy Transition Act Committee asked for information in 2020 on possible projects that could benefit from energy transition funding. 

The committee plans to submit recommendations to the three state departments. Those recommendations could include specific projects to support or areas like sustainable agriculture.

State law requires a formal request for proposals process that the state departments will go through, but projects that receive support from the Energy Transition Act Committee will have an advantage going into that process. However, if the committee recommends reimbursing insurance costs, funds could be distributed to qualified workers without going through the request for proposals process.

By the time the committee got to discussing the proposals they’d heard on Tuesday, the meeting was already running an hour over schedule and many members had left.

Many of those who remained supported reimbursing the mine workers for the insurance costs for up to 12 months. 

That would allow the workers to have continued coverage for themselves and their families as they transition into new careers or into retirement. Some of those who have chosen to retire do not yet qualify for Medicare but will soon become eligible. For those who have decided to pursue training that will help them enter new careers, the direct payments to reimburse insurance costs will help them maintain health coverage while seeking a degree or certificate. 

Tom Taylor, who serves as the convenor for the Economic Development Department, did not support the request and said the money should instead be used to support projects that will create jobs for those displaced workers.

Taylor, who formerly served in the state House of Representatives, suggested instead that the committee ask the legislature for an emergency allocation of funds to help the workers who are now either paying out of pocket for insurance or have chosen to go uninsured.

Rather than making a decision on Tuesday, the committee chose to meet once again when more committee members can be present and have an in-depth discussion about the proposed projects, including direct funds for insurance costs.

Jason Sandel, the convenor for the Department of Workforce Solutions, said the future meeting will likely occur during the first week of December.

Other projects

Throughout the meeting, Sandel stressed the need for projects that can provide assistance and jobs quickly. That could put projects like a proposed pumped hydro storage project at a disadvantage. 

While the pumped hydro project would create two reservoirs on Navajo Nation—one in Arizona and one in New Mexico—that could become tourism destinations and while the project would create thousands of construction jobs and more than 100 full time jobs, the funding requested would be used for studies required to get the project licensed by the Federal Energy Regulatory Commission. The job creation is likely still years out and the company proposing the project would need to provide more evidence that Navajo Nation not only supports the project but is willing to provide both the land and the water to make it possible.

And, while the Energy Transition Act does not allow economic development funding to be used on projects that involve hydrocarbons, at least two of the proposals involve natural gas. 

That includes San Juan College’s proposal requesting $1.4 million to train 55 workers in producing natural gas in a more environmentally friendly manner. 

There were also two proposals for hydrogen projects, however one of them—the Libertad proposal—switched from methane-based hydrogen to electrolysis, or using water to create hydrogen. When questioned about water rights, Joe Merlino, a managing partner for Libertad Power, did not directly identify a source of water. Like the pumped hydro project, the Libertad project is still in the process of conducting studies. Merlino said Libertad has not ruled out the possibility of using methane, but he said the energy transition funds would not be used in pursuing methane-based hydrogen.

Merlino said Libertad thinks that methane-based hydrogen may have a role to play in the energy transition, but is not sure at this time what that role will be.

He said the company’s switch to focusing on electrolysis is based on where the market appears to be heading.

Members of the public who provided comments urged the committee to support what they described as the community proposals. Those included four proposals to support traditional Navajo agriculture, a proposal for sustainable housing on Navajo Nation, a proposal to provide off-grid solar power to Navajo Nation residents who do not have electricity and a proposal to create a tourism center showcasing the region’s unique wild mustangs and training contractors to dart mustang mares with birth control to bring the population down to a sustainable level.

Committee member Joseph Hernandez commented on the proposals for agriculture, housing and off-grid power.

“We’re hitting everything that is needed within 100 miles,” he said, referring to the Energy Transition Act’s definition of impacted communities as being within 100 miles of the power plant.

Taylor said that the funding is coming into the community too late to prevent some of the consequences of closing the power plant.

“A problem already happened that we were supposed to be ready to kill,” he said.

Initially, the committee had hoped to have projects in place when the mine and power plant closed. That would have helped the workers who were displaced immediately transition into new careers. 

Some of the delays came from legal challenges to the Energy Transition Act while others were related to the COVID-19 pandemic.

A full list of project proposals can be found here.