Albuquerque drops support for PNM’s power replacement plan

Posted: Tuesday, April 7, 2015 7:00 pm | Updated: 12:43 am, Wed Apr 8, 2015.

ALBUQUERQUE — A plan by New Mexico’s largest electric provider to replace part of an aging coal-fired power plant with more coal generation and a mix of natural gas, nuclear and solar power has run into another roadblock.

Albuquerque city councilors voted 6-3 late Monday to adopt a resolution that calls for the city administration to withdraw support for Public Service Co. of New Mexico’s power-replacement plan. The city joins Santa Fe, the Albuquerque Bernalillo County Water Utility Authority and other groups that have voiced opposition to the plan in recent months.

Albuquerque’s resolution cites what it says are economic modeling mistakes by the company, and it raises questions about fuel costs. “The costs and economics of certain elements of the agreement have changed to the detriment of the city’s ratepayers,” the resolution reads.

Councilor Brad Winter proposed the resolution. His wife, Nann Winter, is an attorney who represents the water authority, which filed a brief with state regulators earlier this month in opposition to PNM’s plan to raise customer rates.

The state Public Regulation Commission has yet to make decisions on either the power replacement plan or the rate case.

PNM fired back Tuesday, saying its plan provides the most environmental protections at the least cost to customers.

“No one, including the city of Albuquerque, has offered a viable plan that provides the same level of benefits at a lower cost,” spokesman Pahl Shipley said. “It’s unfortunate that a majority of councilors approved a resolution not fully based on facts.”

New Mexico Attorney General Hector Balderas weighed in on the dispute Tuesday, saying state regulators need to act in the interest of ratepayers. His office has asked the state Public Regulation Commission to require PNM to submit a finalized restructuring agreement by May 1 or submit an alternate plan.

Two units at the aging coal-fired San Juan Generating Station in northwestern New Mexico are scheduled to close under an agreement with federal and state officials to curb haze-causing pollution in the Four Corners region. The power plant currently provides electricity for more than 2 million people in the Southwest.

PNM wants to replace the lost electricity with coal from one of San Juan’s other units, electricity generated by the Palo Verde nuclear plant in Arizona, a new natural gas-fired plant and more solar generating stations.

Environmentalists and consumer-advocacy groups argue the plan doesn’t do enough to wean the state’s largest utility off fossil fuels and that ratepayers could be locked in to coal and nuclear power for years to come.

More than 60 percent of electricity generated by PNM in 2014 came from coal. If regulators were to approve the power-replacement plan, the utility says coal generation would drop below 50 percent and nuclear would to increase to one-third. Renewables would total more than 11 percent.

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