PNM shareholders want resolution on coal waste

The passage of the Energy Transition Act in this year’s Legislature was hailed as a dramatic advance toward an environmentally responsible, fair and economically reasonable energy future for the state of New Mexico. As investors in PNM Resources, ratepayers of Public Service Company of New Mexico and citizens of the state, we fervently hope so.

However, the past history of PNM and common sense strongly suggest that close attention needs to be paid to the details of this transition. PNM’s main responsibility is to its shareholders. The role of the New Mexico Public Regulation Commission is essential in protecting the interests of ratepayers and the economic well-being of the state as a whole. In this regard, recent attacks on the PRC, as well as the ill-advised attempt to induce the PRC to reconsider its recent Facebook decision, have been unfortunate.

One issue of great importance that

will likely come before the PRC in the near future will be PNM’s petition to close the remaining two units of the coal-fired San Juan Generating Station. One of the questions will be how much money PNM must contribute to the decommissioning and reclamation of the site.

A certain amount of these funds will be provided, by ratepayers, through the securitization process created in the Energy Transition Act. Questions remain, however, as to PNM’s responsibility for contamination at the site itself and for the coal combustion waste that was used as backfill at the adjacent mine.

PNM has continued to maintain that it does not bear responsibility for the coal combustion waste because the mine belongs to another company and that the material does not present a hazard.

But the coal ash placed in the mine without safeguards other than a cap of topsoil is an absolute hazard. Though in a vitrified form that requires time and water to release, fly ash contains a toxic soup of concentrated heavy metals. Mine spoils will pollute groundwater as they returns to the dewatered mine. Whether or how or when those toxins might find their way into the groundwater and the San Juan River are questions of great importance to the health and safety of the public, and of financial consequence to the company.

Companies are not always able to avoid financial responsibility by passing on to third parties the harmful byproducts of their economic activity. Furthermore, while coal combustion waste storage as backfill in mines is currently unregulated, there is no certainty this will always be so. And in the wake of catastrophic events such as the Duke Energy and Tennessee Valley Authority coal ash pond spills, consciousness is growing nationally of the threat posed by improperly stored coal combustion waste, as is a consensus that the only “safe” storage of coal combustion waste is in properly lined and covered pits.

As investors in PNM and citizens of New Mexico, we have this year submitted a shareholder resolution to be voted at the annual meeting May 21, which asks that PNM Resources prepare a report on how the company plans to deal with the risks posed by coal combustion waste, both to public health and to the reputation and finances of the company.

We hope that whatever the outcome of the shareholder voting, PNM will demonstrate its new commitment to environmental responsibility by engaging with coal combustion waste contamination in a candid and public fashion — as is warranted by the trust the public has demonstrated in PNM’s good faith by the passage of the Energy Transition Act.