As the northwest corner of New Mexico prepares for the closure of the San Juan Generating Station, at least one proposed project to help displaced workers could lead to increased natural gas extraction. Last year, the Energy Transition Act committee sent out a request for information on projects that could be funded through the portions of bonds that could be set aside for economic diversification, workforce training and assisting the Navajo Nation. This resulted in more than two dozen proposals, however the funding is not yet available due to a lawsuit that has postponed the sale of low-interest bonds.
The lawsuit in the New Mexico Supreme Court argues that shareholders should bear more of the costs of closing the power plant instead of ratepayers, who currently will pay for the bonds through a non-bypassable charge on their bills. The bonds will be sold by Public Service Company of New Mexico, the primary owner of the San Juan Generating Station, and will use $360 million of bonds to refinance past investments into the power plant and about $20 million of that money will be used to assist the communities impacted by the closure.
Jason Sandel, a convener for the ETA committee, said there will be a meeting this summer to discuss the proposed projects. A full list of projects submitted for funding consideration and details about each of the projects can be found at dws.nm.state.us/ETA.
Government entities, utilities and watchdog groups say a merger between Public Service Company of New Mexico and Avangrid could harm both ratepayers and the environment unless protections are included. These entities filed testimony in a New Mexico Public Regulation Commission case evaluating the merger. This merger is subject to the PRC approval as well as approval from the Federal Energy Regulatory Commission. PNM’s parent company, PNM Resources, is seeking to merge with Avangrid, a U.S. subsidiary of renewable energy giant Iberdrola, which is based in Spain. The PRC hearings related to the merger are scheduled to start on May 3 and testimony has been filed expressing a variety of concerns.
With a unanimous vote Wednesday morning, the New Mexico Public Regulation Commission (PRC) ended one piece of a year-long debate on the future of coal in the Four Corners region. The utility PNM, which is slated to exit the San Juan Generating Station in 2022, will now need to rely on 100 percent renewable energy and battery storage to replace the power generated at the coal-fired plant.
Commissioners were faced with the tough decision of weighing the economic future of the Four Corners area with the climate goals of the landmark Energy Transition Act (ETA), a 2019 law which mandates the state move to 100 percent carbon-free electricity generation by 2050.
“With all the facts put on the table, and all the facts that our hearing examiners worked on, we’re moving New Mexico forward,” said PRC chairperson Theresa Becenti-Aguilar during the meeting. “And the changing energy economy in the communities of the San Juan station—it’s happening, it’s moving today.”
The decision was lauded by a multitude of clean energy advocacy, environmental and grassroots community groups that called on the commission to approve the replacement power scenario proposed by the Coalition for Clean Affordable Energy. The proposal includes 650 MW of solar resources and 300 MW of battery storage resources, with 430 MW of solar and $447 million worth of capital investments located within the Central Consolidated School District in San Juan County. Another 520 MW of renewable energy and roughly $500 million of capital investment would be located in McKinley County and the Jicarilla Apache reservation in Rio Arriba County.
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.
RELATED: Natural gas will play a big role in state’s energy transition
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.
When Gov. Michelle Lujan Grisham signed the Energy Transition Act into law in March, she called the law “transformational” and “a really big deal.”
“The Energy Transition Act fundamentally changes the dynamic in New Mexico. This legislation is a promise to future generations of New Mexicans, who will benefit from both a cleaner environment and a more robust energy economy with exciting career and job opportunities,” she said at the time in a statement. But the first attempt to implement the new law hasn’t been smooth. The investor-owned utility PNM announced in 2017 that it planned to close the San Juan Generating Station, a coal-fired plant located outside Farmington. But PNM didn’t formally submit to the Public Regulation Commission (PRC) its consolidated application for abandonment, securitization and replacement power for the power plant until July 2019, weeks after the Energy Transition Act had been signed into law.
Energy engineer and consultant David Schlissel questioned some of the claims presented by Enchant Energy and consulting firm Sargent & Lundy on the feasibility of retrofitting the San Juan Generating Station with carbon capture system technology. PNM, the majority stakeholder in the plant, plans to shutter the facility by 2022 as part of the utility’s wider goal of ending all coal-fired power generation in its portfolio by 2031. That strategy aligns with Gov. Michelle Lujan Grisham’s Energy Transition Act (ETA) law, which would require 50 percent of the state’s electricity generation to come from renewable energy sources by 2030.
Enchant Energy has proposed acquiring 95 percent of the coal-fired San Juan Generating Station to install a carbon capture system that it says would offer a cost-effective, low-emission solution to keep the coal-fired plant open beyond 2022. Schlissel testified his concerns about the proposal before the Public Regulation Commission in response to the recent testimony of PRC staff witness Dhiraj Solomon, acting engineering bureau chief of PRC’s utility division. Solomon argued that a carbon capture system would enable the plant to operate within the emission requirements of the ETA.
Sierra Club filed Schlissel’s testimony with the PRC late last week.
Enchant Energy, the company that plans to turn the San Juan Generating Station near Farmington into the world’s largest carbon capture system, responded to criticisms made in a recent report, blasting the proposal. NM Political Report spoke with the Institute for Energy Economics and Financial Analysis (IEEFA) report author Karl Cates about his concerns for the proposal last month. RELATED: Energy think tank blasts carbon capture proposal for San Juan coal plant
Enchant Energy addressed a number of issues raised by the IEEFA report in a document posted to the company’s website in late July. The company reiterated its belief that the proposed carbon capture system offers a cost-effective, low-emission solution to keep the coal-fired San Juan Generating Station open. “Contrary to the IEEFA assertion, Enchant Energy is not making hard and fast ‘presumptions,’” the company said, pointing to a pre-feasibility study the company commissioned earlier this summer from global engineering firm Sargent & Lundry.
An energy market think tank has dubbed the carbon capture proposal for the San Juan Generating Station, the Northwestern New Mexico coal-fired power plant which is closing soon, a “false hope.”
The Institute for Energy Economics and Financial Analysis (IEEFA), an Ohio-based energy think tank, recently published a scathingly critical report about Enchant Energy’s proposal to use carbon capture technology to keep the coal-fired power plant open and operating. PNM, the majority stakeholder in the San Juan plant, plans to shutter the facility by 2022 as part of the utility’s wider goal of ending all coal-fired power generation in its portfolio by 2031. That strategy aligns with Governor Michelle Lujan Grisham’s Energy Transition Act (ETA) law, which would see the state generate 50 percent of its electricity from renewable energy sources by 2030. The City of Farmington announced in February that it reached an agreement with Enchant Energy to keep the plant open. The company is an unknown firm in the energy sector and a newcomer to the state.
The Legislature has moved to Gov. Michelle Lujan Grisham’s desk a controversial bill designed to dramatically increase the amount of renewable energy used to produce electricity in New Mexico while also helping the Public Service Company of New Mexico recoup its investments in the coal-burning San Juan Generating Station near Farmington. Following a three-hour debate Tuesday, the House passed Senate Bill 489 by a margin of 43-22. It was a mostly party-line vote, with almost all Democrats in favor of the bill and almost all Republicans voting against it. The measure goes now to Lujan Grisham, who has enthusiastically supported it. How PNM’s electrical rates will be affected was a major point of contention during debates over the bill in the Legislature.
A bill aimed at shutting down the coal-burning San Juan Generating Station and strengthening New Mexico renewable energy standards survived a rambling 3 1/2-hour filibuster and other parliamentary maneuvering by opponents in the state Senate on Wednesday night. But one victim of the games on the Senate floor was the annual House vs. Senate basketball contest at the Santa Fe Indian School gym, an annual benefit for the University of New Mexico’s Comprehensive Cancer Center. The Senate team had to concede and return to the Capitol, some members arriving in the Senate chamber still wearing basketball gear, because the debate on Senate Bill 489 — dubbed the Energy Transition Act — went on well into the night. State Sen. Cliff Pirtle returned to the Senate floor wearing his jersey for the House-Senate basketball game and the rules-mandated tie.