PNM defends $300M outlay

Hearing, expected to last into next week, begins on utility’s plans to abandon outdated coal-fired facility

The term “net public benefit” dominated parts of a virtual hearing Tuesday before a state Public Regulation Commission official about Public Service Company of New Mexico’s application to leave the Four Corners Power Plant.

PNM hopes to abandon the Four Corners plant in northwestern New Mexico at the end of 2024. It plans to then turn its share of the coal-fueled plant over to the Navajo Transitional Energy Co., which intends to continue operating it, at least on a seasonal basis.

One the first day of what is expected to be an eight-day hearing rife with complexities, questions about the environmental impact of PNM’s departure and the financial

effect on the electric utility’s customers came up frequently.

PNM executives Mark Fenton and Tom Fallgren fielded questions about how PNM could present its departure from the Four Corners plant as environmentally sound when it intends to turn the plant over to a company that will keep it running.

At different times, Fenton and Fallgren said they expect Four Corners to operate only seasonally under the plan. This, they said, would reduce pollutants and emissions by 20 percent to 25 percent.

Jeff Albright, an attorney for Bernalillo County, said operating a coal-fired plant seasonally is like “the difference between smoking three packs of cigarettes a day and smoking two packs of cigarettes a day.”

Kyle Tisdel, an attorney who represents community groups in Northern New Mexico, asked Fenton if the Public Regulation Commission should consider in its “net benefit” formula the coal ash, air pollution and greenhouse gases emitted by the Four Corners Power Plant.

“Has PNM attempted to quantify the harm” from those operations? Tisdel asked.

Fenton said he didn’t know, but the commission should consider the cost effectiveness and improved carbon footprint. “We’re getting out of coal,” Fenton said.

PNM owns 13 percent of Four Corners and the Navajo Transitional Energy Co. owns 7 percent. The primary owner of the plant is Arizona Public Service, which has a more than 60 percent share.

Another key element of the hearing Tuesday involved $300 million in costs, mostly from PNM’s capital investments in Four Corners, which largely will be covered by PNM customers after the proposed transaction.

PNM critics say those expenditures were inappropriate, or “imprudent,” considering the antiquated state of the Four Corners plant.

PNM routinely has said customers already have started paying down that amount and the company will get a far lower interest rate than before as a result of the state’s 2019 Energy Transition Act.

Other factors, including using cheaper sources of energy than the power plant, mean customers will save $30 million to $300 million in the deal, Fenton said.

Hearing examiner Anthony Medeiros chastised two attorneys participating in the hearing before it started Tuesday.

First, he criticized Mariel Nanasi of Santa Fe, leader of the nonprofit New Energy Economy, for the way she submitted some of her documents. He called them a “jumbled mess that I have in front of me.” He also said a filing by Nanasi was nearly identical to one from the Sierra Club, and he wanted only one version.

Medeiros then expressed displeasure with PNM attorney Ryan Jerman, whose audio in the Zoom hearings produced an echo when he spoke. He threatened to suspend the hearing over the issue.

The problem apparently stemmed from the fact that Jerman and Fenton were sitting in the same room. Jerman apologized and moved into a different room, ending the feedback problems.

The hearing is expected to conclude Sept. 10.