PRC extends PNM deadline for post-San Juan plan

The PRC voted to give PNM an extension to file its final coal contracts and San Juan restructuring agreement. Though PNM claims it will have all documents submitted by August 1st, the more important issue remains that the plan is not cost effective. Commissioner Sandy Jones of District 5 has decided to call together a voluntary settlement negotiation between all parties, with the intention of avoiding another fully litigated hearing. 

Written by  on June 26, 2015 

The New Mexico Public Regulation Commission on Wednesday granted the Public Service Company of New Mexico an extension to file its final agreements and contracts for its proposed deal to restructure the use of the San Juan Generating Station.

The PRC has over many months heard PNM’s case for its plan to restructure the ownership of two remaining units at the San Juan station after the impending shutdown of the other two. PNM has not yet presented signed agreements as to who will purchase remaining ownership of the two stations after four other potential owners backed out. In addition, they have not yet confirmed future supply of coal to the San Juan Generating Station.

However, PNM feels confident that they will have these agreements signed by August 1 — extended from July 1 by the PRC on Wednesday.

According to Jodi Porter, a PNM public information officer, the utility will have all of the correct contracts signed by August.

“We intended to file executed coal agreements by July 1 and file the agreements related to ownership restructuring by July 1,” Porter said. “The remaining portion that will be filed by August 1 is essentially just signature pages that the participants at (the San Juan Generating Station) needed additional time to gain approval from their necessary governing bodies and boards.”

According to Porter, majority shareholders that will sign agreements as of July 1 are PNM, PNMR Development, Tucson Electric Power and the City of Farmington. She said these entities will represent 92 percent ownership as of January 1, 2018. The rest of the entities planning to sign by August 1 are Southern California Public Power Authority, City of Anaheim, the Incorporated County of Los Alamos, M-S-R Public Power Agency from California, Tri-State Generation and Transmission Association Inc. and Utah Associated Municipal Power Systems.

Although PNM plans to have all agreements signed by August 1, some opponents to the company’s plans are not so sure.

Mariel Nanasi, executive director of the nonprofit organization New Energy Economy, said PNM has taken months to finalize these agreements, and keeps asking for extensions. She said throughout the course of the case, PNM has promised to have restructuring agreements in place, but then fail to produce evidence of said agreements.

“All their promised dates have been broken,” Nanasi said. “Nineteen months later they are more equivocal than ever.”

This time, however, she said they have no longer “promised” anything. Instead, “they say they will reaffirm their commitment,” Nanasi said.

The signed restructuring and coal contract agreements are not Nanasi’s only concern.

She said PNM claims the restructuring of the ownership of the San Juan Generating Station will be the most cost-effective plan for its ratepayers. Yet Nanasi points out wind and solar power would be much cheaper than PNM’s current plan.

If PNM were to invest in building solar and wind power plants it could save the consumer population between $26 million and $80 million, she said. Nanasi argued that coal power, in general, is not a feasible financial purchase — which is why at least four entities backed out of purchasing more shares at the San Juan plant.

“Basically the whole financial market for coal is collapsing,” Nanasi said. “(PNM should not) invest in more coal because it will create an economic nightmare for ratepayers.”

The ultimate decision, however, will rest with the state’s Pubic Regulation Commission.

District 5 PRC Commissioner Sandy Jones, who represents southwest New Mexico, said he thinks PNM has had enough time to get restructuring and coal supply contracts signed.

“Obviously I voted for the extension sort of under protest,” Jones said. “I’m still under the opinion that PNM has had ample time.”

Yet, to date, PNM has no contracts signed for the PRC’s review, he added.

“PNM runs out and has a press conference saying they have this all done when they don’t,” Jones said.

However, Jones said he believes PNM and its partner entities are very close to finalizing plans.

“I’m drafting an order to designate a facilitator to voluntarily bring parties together to negotiate a settlement,” Jones said.

Failure to sign the agreements by August 1 “could trigger a fully litigated hearing — which could take months,” Jones said. “The best thing people can do is to work together.”

Stewart McClintic may be reached at

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