PRC doesn’t clarify if energy act applies to San Juan plant
Order says issue will be decided during hearings on generating station’s closure
Teresa Becenti-Aguilar, who chairs the Public Regulation Commission, refused this week to formally clarify whether the state’s new Energy Transition Act will apply to Public Service Company of New Mexico’s plan to shutter the coal-fired San Juan Generating Station near Farmington.
An order signed by Becenti-Aguilar, D-Albuquerque, said the issue of whether the new law or previous statutes apply will be decided during hearings on San Juan’s closure and on proposed replacement power for the aging power plant.
But some parties involved in the issue say the commission’s stance throws a monkey wrench into New Mexico’s scheme for transitioning from coal to renewable energy sources.
At stake is whether the state’s largest utility will be able to finance the San Juan shutdown with bonds that would be paid off by ratepayers, a plan authorized by the law passed this year by the New Mexico Legislature. PNM wants to recover about $300 million.
The Energy Transition Act also calls for allocating about
$40 million for programs to mitigate the economic impact on the Farmington area from abandonment of the old plant and adjacent coal mine.
“At best it’s very inefficient,” said Steve Michel of Western Resource Advocates, a cleanenergy advocacy group that had requested clarification by the commission. “The worst-case scenario is that the PRC waits six months and decides the Energy Transition Act does not apply. Then presumably, it goes to court.”
Michel said that would delay funds for economic development and job training for displaced workers at the power plant and coal mine.
PNM spokesman Ray Sandoval said Friday the utility had supported Western Resource Advocates’ motion for clarification. He said the company believes the new law, which went into effect in June, applies to PNM’s current abandonment plans.
PNM had submitted an abandonment plan for San Juan before the Legislature passed the new energy law, and the commission on July 10 decided to consolidate the two cases.
The commission also decided to split upcoming proceedings into two parts: the financing of closure and the replacement power.
At that meeting, Commissioner Valerie Espinoza, D-Santa Fe, argued that reviewing the case under the old law would allow the commission more time, because the time line in the Energy Transition Act wouldn’t apply.
“Since the issues are critical to New Mexico’s future and since the replacement resources will be long-lasting — perhaps 20 to 30 years — and since the costs are going to be significant, I think it’s imperative that the commission have a complete and comprehensive understanding as possible,” she said, adding that the commission should have the maximum time possible to make its decision.
Commissioner Steve Fischmann, D-Las Cruces, the only commissioner to vote against hearing the case under the old law, said he worried about “getting bogged down” and “getting in a bunch of arcane arguments and probably not accomplishing much.”
“The Legislature has passed a law and that’s where they want to go under a policy perspective,” Fischmann said at the meeting. “I can image a million arguments from lawyers for all sides about which law applies when.” He predicted the courts will ultimately decide that commissioners should “just do what the Legislature asked you to do.”
The Energy Transition Act calls for New Mexico’s major electric utilities to get 100 percent of their power from carbon emission-free sources by 2045. PNM plans to be emission free five years before that date.