Coal plan opponents challenge legality of documents PNM gave PRC

New Energy Economy asked the PRC to strike PNM's "unsigned, tentative, unapproved and subject-to-change" coal contract with Westmoreland Coal Company from the record.

Posted: Friday, May 15, 2015 7:00 am | Updated: 12:38 am, Sat May 16, 2015.

Two environmental groups are calling on the state Public Regulation Commission to reject Public Service Company of New Mexico’s agreement with a company that would supply coal for the San Juan Generating Station near Farmington.

The groups contend that documents submitted by the utility are not legally binding.

PNM is closing two coal-burning units at the San Juan station in 2017. But the company wants to continue burning coal in the remaining units. Those plans hit a bump last month when a hearing examiner for the regulation commission recommended the San Juan plan be rejected because PNM had not provided information on a supplier and a price on the coal it intends to use.

This week, PNM announced that it had signed an “executed letter agreement” with Colorado-based West Westmoreland Coal Co.

“The combined new coal supply and [San Juan Generating Station] ownership restructuring agreements will save customers approximately $300 million in fuel costs over the next six years,” PNM said in a news release.

Opponents dispute the $300 million figure and say the deal could lead to layoffs.

Earlier in the month, PNM filed a confidential unsigned draft of the coal agreement, along with other documents, and asked the commission for conditional approval until the coal contract and ownership documents are made final Aug. 31.

But on Friday, the environmental organization New Energy Economy formally asked the Public Regulation Commission to strike all those documents filed May 1, saying none of the agreements are binding.

“Despite the creation of a media bonanza when PNM filed the documents claiming that the documents ‘secured longevity’ for San Juan coal, the truth is that all the public got was spin,” Mariel Nanasi, executive director of New Energy Economy, said in a news release. New Energy Economy has intervened in the case.

Nanasi said the draft agreements submitted earlier in the month were “confidential, conditional, unsigned and undated.” In order to review them, she said, she had to sign a confidentiality agreement.

Her organization said “the filings by PNM are outside the legal record.” If the Public Regulation Commission relies on them, that would be grounds for a court to overturn the decision, New Energy Economy said.

Western Resource Advocates has also intervened in the case. In a similar filing this week, it wrote: “The documents PNM has filed are merely drafts of agreements that may or may not be finalized. As the commission and parties have painfully learned throughout this case, PNM’s claims of near-finality cannot be relied upon. … The notion that these unsigned, tentative, unapproved and subject-to-change documents should be relied upon to make any decision involving hundreds of millions of dollars defies reason.”

But in a statement Friday, PNM spokeswoman Jodi McGinnis Porter said that “the filed letter agreement with Westmoreland Coal Company is a signed and binding agreement. … Some opponents are focused on their own agenda, misrepresent the facts and do not address the needs of New Mexicans. The PNM plan is open, transparent and public. It’s in the best interest of customers and will provide additional savings over and above what is already recognized in the record.”

A decision by the regulation commission could come as early as this month.

The city governments of Santa Fe and Albuquerque, as well as Santa Fe and Bernalillo counties, have objected to PNM’s San Juan plan.

Contact Steve Terrell at sterrell@sfnewmexican.com. Read his political blog attinyurl.com/roundhouseroundup.

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