The PRC granted PNM an extension to finalize the necessary contracts to continue operations at the San Juan coal plant, with an absolute deadline now set for August 1st. The commissioners have expressed frustrations at PNM's lack of follow through but still say they need all the evidence to make a decision in the case, despite the fact that most intervenors in the case believe PNM does not deserve any further extension.
State regulators voted 4 to 1 on Wednesday to give Public Service Co. of New Mexico more time to finalize an ownership restructuring agreement and coal supply contract before deciding on the utility’s plan to shut down half of the coal-fired San Juan Generating Station near Farmington.
PNM now has until July 1 to submit final contracts for review by the Public Regulation Commission. That deadline could be extended to Aug. 1 if PNM requests it by June 3, although other parties would then be allowed to comment on PNM’s request, with a commission ruling by June 17.
And if granted, that would be the last extension, said PRC General Counsel Mike Smith.
“That would be the drop-dead deadline,” Smith told commissioners.
The extension provides only a partial reprieve for PNM, which had asked the PRC in early May to immediately approve its plans for San Juan on condition that it finalize new plant ownership and coal agreements by Aug. 31.
PNM wants to shut two of San Juan’s four generating units and add pollution controls to the remaining ones to meet federal haze regulations. It would add more nuclear, natural gas and solar generation to the grid to make up for lost coal capacity.
Most parties in the case — which was reviewed in lengthy public hearings last January — support that basic plan. But most also oppose PNM’s proposal that it and its parent firm, PNM Resources, absorb nearly 200 more megawatts of capacity in one of the remaining San Juan units to pick up the slack from other co-owners who will abandon the plant after 2017.
PRC hearing examiner Ashley Schannauer recommended in April that commissioners reject that part of PNM’s plan, largely because the lack of final ownership and coal agreements make it difficult to assess the costs and benefits of PNM’s proposals.
PNM said in early May it had reached “substantially final” agreements on both those matters, including an accord with Colorado-based Westmoreland Coal Co. to buy the San Juan Coal Mine from current owner BHP Billiton to continue supplying the plant through 2022. PNM said the new contract would save ratepayers 15 to 20 percent compared to its current contract with BHP.
The company said it’s grateful for the extra time granted to finalize accords.
“We appreciate the commission taking every opportunity to examine the benefits,” said PNM spokesman Pahl Shipley.
But other parties in the case said the extension is unfair, since PNM has already missed deadlines for those agreements and the record in the case is now closed.
“The rules don’t seem to apply to PNM,” said New Energy Economy Executive Director Mariel Nanasi.
Steve Michel, chief counsel for Western Resources Advocates, said the extension puts extra burden on other parties to review and comment on the final contracts.
“We already spent tons of resources litigating this case, and now we’re faced with the possibility of having to start all over again,” Michel said.
Commissioners also expressed frustration.
“We need concrete evidence — signed contracts — to make a decision in this case, and we’re out of time,” said Commissioner Sandy Jones.
Commissioner Linda Lovejoy said PNM apparently hasn’t made a good-faith effort to abide by rules and procedures.
“PRC staff and this commission have worked very hard throughout the whole hearing with the entire process dedicated to responding to PNM’s piecemeal documents, and they still are not providing the information needed,” Lovejoy said.