As the San Juan Generating Station closed in 2022, the Central Consolidated School District noted a significant increase in homelessness among its students. At the peak, the district noted a 700 percent increase in homelessness.

Now the school district is among the groups calling for the Public Service Company of New Mexico to install an additional 130 megawatts of replacement power within its boundaries.

District school board member Christina Aspaas said the increase in replacement power within CCSD will help mitigate some of the financial impacts of the closure, but will not fully make up for the loss of jobs and the decreased enrollment that the district is experiencing. She said the district’s most important source of funding is based on the number of students actively attending school.

Amid this backdrop a group of bipartisan legislators along with the advocacy group New Energy Economy have filed a writ of mandamus and asked the New Mexico Supreme Court to intervene in a recent case in which PNM requested approval of new battery storage and solar projects. The New Mexico Public Regulation Commission already approved these projects, but the legislators say that the regulators should reconsider that decision because the projects are not within CCSD boundaries.

The filing comes after the PRC rejected the legislators’ request to intervene in the case after a final order had already been reached and also rejected the legislators’ request that the state regulators reconsider the decision.

San Juan County and CCSD have also filed requests with the PRC to intervene and have asked the commission to rehear the case.

However, PRC staff argues that the commission does not have the ability to grant those requests.

“The law does not require that late-coming and aggrieved would-be parties be apprised or made to understand the potential repercussions of the proceeding referable to their specific interests, but only reasonable notice of the proceeding and an opportunity to participate, if they so elect,” the staff states in the case docket.

New Energy Economy is representing the 15 legislators and argues that the PRC “abdicated its responsibility” to carry out the will of the legislature when it accepted PNM’s assertion that the Energy Transition Act does not require that utilities seek approval for a substitute project should one of the selected replacement power projects default.

Replacement resources

New Mexico’s Energy Transition Act of 2019 required up to 450 megawatts of replacement power be located within CCSD to help offset the loss of property tax revenue to the school district. This was particularly important because CCSD, which primarily serves Navajo Nation students, received the vast majority of its property tax revenue from coal-fired power plants and coal mines, including the San Juan Generating Station and its associated San Juan Mine. The district had also issued bonds prior to 2017 under the assumption that the power plant would remain open until 2051.

“For me, I say PNM breached their contract with the community and they should have left in 2051,” Aspaas said.

PNM considered closing the plant even earlier than 2022 including discussion in 2012 that the generating station could shutter. Two of the four units ultimately did close earlier and the remaining two had new pollution control technology installed. Officials in San Juan County claim that those upgrades turned San Juan Generating Station into one of the cleanest coal-fired power plants.

Following the announcement that San Juan Generating Station was going to close, the PRC approved 430 megawatts of replacement solar and battery storage projects located in CCSD boundaries, but one of the projects—the Rockmont Solar Project—defaulted. That resulted in a decrease in 130 megawatts of replacement resources in CCSD boundaries.

Then, in October of last year, PNM filed an application with the PRC for new solar and battery projects. One of those projects, the Quail Ranch Solar Project, is similar in scope and size to the Rockmont project and a PRC staff member stated in a PRC document that it was intended to replace the Rockmont project. The utility never said that these projects are intended to replace the San Juan Generating Station. Instead, PNM argued that these new resources are needed to ensure grid reliability in the future. PNM has indicated that it may build more replacement resources within CCSD in the future.

“The undisputed evidence in this case is that the 2026 Resources are not replacement resources for San Juan; rather, they are intended to allow PNM to reliably meet PNM’s expanded load and 2026 summer peak demand in accordance with utility industry standards,” the utility states in documents filed with the PRC.

PNM also states that PNM’s resource needs are not a “zero-sum game” and that future development could include resources in CCSD boundaries.

“PNM has publicly confirmed that competitive bids for resources in the CCSD have been received and that PNM will submit CCSD resources for consideration by the Commission in PNM’s 2028 resource application to be filed this fall,” the utility states.

The PRC, in its ruling accepting the application for the new solar and battery storage projects, also rejected the notion that these are intended to replace the San Juan Generating Station or as a substitute for the Rockmont Solar Project.

Rep. Patricia Roybal Caballero, D-Albuquerque, was among the sponsors of the Energy Transition Act and is now one of the 15 legislators asking the Supreme Court to intervene.

She said in a press release that the Energy Transition Act “gave PNM enormous compensation for closing the San Juan Generating Station coal plant, because we wanted to spur a transition to clean energy in the electric sector and believe that climate disruption is real, negatively disrupting New Mexico: wildfires, flash flooding, heat waves.”

At the same time, Roybal Caballero said that lawmakers knew the closure meant a big loss in tax revenue for CCSD and, because of that, the law included the requirement that PNM locate replacement resources within the school district.

“PNM has now announced that it is going to locate new power facilities – which will replace what PNM lost when it closed San Juan Generating – in Bernalillo County,” she said. “How is this happening? Because PNM has labeled the replacement power as ‘system needs’, not ‘replacement power,’ but PNM needs this capacity because it closed the coal plant. This betrays the trust that the legislature placed in PNM when it passed the ETA.”

Economic challenges

The case opened old wounds for the community in northwestern New Mexico where some of the biggest economic development news is that a McDonald’s may soon be opening in Kirtland.

Mark Duncan, a Republican, serves as a state representative and the mayor of Kirtland. He is one of the legislators who asked the PRC to reconsider its decision on the new solar and battery storage, though he argues that new solar projects in San Juan County are not enough to make up for the closure of the power plant. This is because the jobs associated with solar power are primarily temporary in nature.

The lack of jobs is causing people to leave the area, Duncan said.

“We’ve watched as families have left here and had to go elsewhere to work,” he said. “Their kids are staying with their grandparents.”

San Juan County is a place where fossil fuels transformed the community. The orchards that once lined the rivers have virtually vanished as oil, natural gas and coal provided opportunities for higher paying jobs. Now it is facing uncertainty amid a transition to cleaner energy sources that do not require large amounts of labor or fuel. 

The problems go beyond the closure of the San Juan Generating Station. Prior to San Juan’s closure, the Navajo Generating Station nearby in Arizona closed. 

The county is also bracing for the 2031 closure of the Four Corners Power Plant and its associated Navajo Mine. Already the owners of the Four Corners Power Plant have cut its operations to the point that it is only generating electricity during the summer months.

The jobs that are disappearing tend to be Navajo workers who use the salaries to support sometimes multiple generations.

Duncan said the mine and power plant provided about 1,500 direct jobs.

“Those are good jobs,” he said. 

Duncan said that since the closure no one has been able to replicate the labor intensity and wages of the power plant and mine.

“Nobody has come in and said, ‘Hey, I’m willing to offer $85,000 and you come work for me.’ And we just don’t have those jobs. Those jobs disappeared,” he said.

Because of the loss in residents and the decline in student population, Aspaas said most of the school buildings are at 45 percent of capacity and the district is considering combining some of the schools.

PNM has stated that the decision to close the power plant was made based on economic assessments and was not about emissions or climate change or pressure from environmentalists. The utility had also committed to closing the power plant prior to the passage of the Energy Transition Act and the law attempted to mitigate some of the impacts by including the replacement resource location requirements as well as creating funds to assist the community.

“The ETA was a bailout for PNM, in exchange PNM pledged specific obligations to the affected community,” Rep. Rod Montoya, R-Farmington, said in a press release. “Our residents are suffering because of the significant job losses caused by the premature closures of San Juan Generating Station and San Juan Coal Mine. Now, significant tax deficits are affecting Central Consolidated School District because of PNM redirecting new infrastructure projects outside of the affected community. PNM has a legal obligation under the ETA and a moral obligation to the employees who worked for them for decades. The PRC has an obligation to follow the Energy Transition Act and ensure that jobs and revenue are located in the Central Consolidated School district. The ETA is settled law!”

Intervention request

While the PRC has already denied the 15 legislators’ request to intervene in the case after a final ruling was issued and denied a request to rehear the case, that hasn’t stopped other similar efforts. San Juan County and CCSD submitted motions to intervene and asked the PRC to reconsider the approval of the new projects.

One reason that the PRC denied the legislators’ request to intervene was that the deadline for parties to intervene in the case was in February and, because only parties to the case could request a rehearing, the commission determined that the legislators did not have the standing to ask for reconsideration of the decision.

Both PNM and the PRC staff argue that CCSD and San Juan County were properly informed and given the chance to intervene earlier in the case.

In documents filed with the PRC, PNM states that it informed CCSD and the district’s attorney of the application for the new resources in October of last year when it requested PRC approval of the new solar and battery projects. Additionally, PNM states that the attorney was given a copy of the PRC’s initial order in the case, which set the deadline to intervene as Feb. 20.

PNM argues that the school district was “fully informed, through its counsel of record, of the existence of this case, the issues in this case, the deadline for intervention, the status of the San Juan replacement resources, including the termination of the Rockmont Project, and the bi-weekly video conference calls. CCSD offers no explanation why it chose not to act on any of this information or seek to timely intervene in this case.”

Likewise, PNM states that an attorney representing San Juan County was also given a copy of PNM’s application and pre-filed testimony in the case. That pre-filed testimony included details about bids the utility received for projects within CCSD boundaries and why those projects were ultimately not selected.

San Juan County argues that the notices regarding the case did not reference Rockmont and that the county did not know until after the final order was issued that it was a case that might warrant intervention. 

While the county acknowledges that PNM is looking at future resources that in the future could be located within CCSD boundaries and that the utility has not stated that any of the newly approved resources are intended to replace the San Juan Generating Station, the county states in documents filed with the PRC that it disagrees with an assertion that “ PNM’s obligations under the [Energy Transition] Act disappear when an approved replacement resource cannot be placed into service.”

The county states that it is not asking the PRC to revoke the approval of the Quail Ranch project.

“The County simply seeks to clarify that the provisions of the Energy Transition Act govern future approvals of substitute resources for the Rockmont Solar Project,” San Juan County states.

But, PNM argues, that should be done in a different docket.

“This case has nothing to do with replacement resources for San Juan or the Rockmont Project and is, therefore, not the proper case to litigate and address the issues that SJC is attempting to raise on intervention and rehearing,” the utility states.