PNM, opponents debate partial shutdown of San Juan coal plant

san juan coal plant

SANTA FE (KRQE) – A controversial plan over how PNM will generate a lot of your electricity is up for debate and the outcome could have a big impact on New Mexicans’ electricity bills.

Board members for New Mexico’s Public Regulation Commission opened hearings on the future of PNM’s San Juan Generating Station on Monday. PNM is seeking to reduce pollution coming out of the plant. However, the project’s outcome will likely mean multiple rate hikes for customers.

PNM wants to cut the amount of coal it burns from the San Juan coal plant by 30 percent in the next couple years. However, opponents say the proposal is expensive and not the cleanest plan that the utility could have picked.

“Customers are looking at rate shock, you know, not only this case, and the rate hike that they’ve just filed, but there’s going to to be at least another one in 2017 and perhaps many many more, because coal and nuclear and big expensive behemoth plants,” said Mariel Nanasi, executive director of the New Energy Economy Group.

Nanasi’s group is one of a handful now fighting PNM’s proposal for the San Juan coal plant. PNM needs the approval of the PRC in order to move forward with its plan.

As part of the plan PNM wants to shut down two of the four coal-fired boilers at the San Juan coal plant near Farmington. In exchange, the utility wants to buy nuclear power from Arizona, construct new natural gas power plants, and more solar panels.

However, the utility still owes about $200 million on the coal plant. If the state approved PNM’s plan to shut down part of the coal plant, they’ll ask rate payers to make up the money faster in about 20 years instead of about 40 years.

The utility already has a pending rate hike proposed that’s worth about $10 a month for the average customer. Under PNM’s San Juan plan, they’ll be on track to ask customers for another rate hike in 2017 that would go into effect likely in 2018. There’s no word yet on how much PNM could ask for.

At Monday’s hearing, PNM’s vice president of regulatory affairs, Gerald Ortiz tried to defend the utility’s actions when questioned by numerous groups fighting the proposal.

“You can minimize the amount of carrying cost that you collect by shortening the life but then the rate payer impact can get very large, and so 20 years seems to be a good balance,” said Ortiz.

Many environmentalists are upset with PNM’s proposed plan, saying it doesn’t go far enough to wean the state’s largest utility off fossil fuels. Others argue the plan will be bad for the economy in the Farmington area because jobs will be lost if two boilers are shut down.

The PRC hearing is expected to last the rest of this week and may go into next week. If the PRC gives PNM the go-ahead, the utility would start making changes at the San Juan plant before the end of 2017.

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