ALBUQUERQUE, N.M. (AP) - New Mexico regulators on Wednesday green-lighted an application by the state’s largest electric utility to abandon its interest in a major coal-fired power plant as the state works toward emission-free mandates and more renewable energy.
The Public Regulation Commission voted unanimously in favor of letting Public Service Co. of New Mexico divest from the San Juan Generating Station. The panel also approved an order allowing the utility to issue $360 million in bonds that will be repaid by customers to fund decommissioning costs, severance packages for displaced workers and job training programs.
The votes came after a delay in the online proceeding that resulted from an outburst by a group of young people that included epithet-laden chat messages and rap music.
The incident highlighted one of the pitfalls that officials face as public meetings, news conferences and other business is having to be conducted online or through virtual meeting apps due to the limits on public gatherings and the need to encourage more social distancing as the number of coronavirus cases grows.
The San Juan case has taken many twists and turns in recent months, ending up at one point before the New Mexico Supreme Court, which ordered regulators to apply the state’s new energy transition law to their decision making.
Wednesday marked the last day the commission could vote on PNM’s application to abandon the power plant. The decisions chart out how liability will be shouldered by PNM customers and utility shareholders.
Chairwoman Theresa Becenti-Aguilar said many public hearings were held, hearing examiners carefully prepared their recommendations and commissioners have asked many questions.
“As we’re making a decision today, we’re also dealing with an extraordinary time but we still have to move forward, protecting the rights of PNM customers,” she said before being interrupted by the outburst.
Becenti-Aguilar and other commissioners wanted to ensure the panel could still balance the interests of both customers and shareholders in future rate cases and would have the authority to determine whether PNM requests to recover costs are reasonable and prudent.
San Juan would be just the latest coal-fired power plant in the U.S. to close as regulatory pressures mount and New Mexico and other states enact more ambitious renewable energy targets. PNM plans to replace San Juan with a mix of natural gas, wind, solar and battery storage, but regulators have yet to sign off on that plan.
PNM Resources’ chairman, president and CEO Pat Vincent-Collawn was pleased with the votes.
“Our customers, communities and environment will benefit as we move to exit all of our coal-fired generation and replace it with lower-cost, cleaner energy resources,” she said in a statement.
As part of the financing scheme, about $40 million will go to help workers and the communities in northwestern New Mexico that will be affected by the planned closure in July 2022, she said.
PNM has proposed collecting a monthly energy transition charge from customers over a 25-year period to cover the debt service payments on the bonds. The monthly charge would be either $1.90 or nearly $5 depending on how much electricity is consumed, with higher users paying more.
Despite the new charge, commission staff, the utility and environmentalists all have said customers should see an overall savings once the plant is no longer part of PNM’s portfolio.
There is an initiative by the city of Farmington and a private company to install carbon-capture technology and keep operating the plant. Commission staff confirmed the orders approved Wednesday would not affect those efforts.
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