Posted: Tuesday, January 20, 2015 8:00 pm | Updated: 9:28 pm, Tue Jan 20, 2015.
Two renewable energy groups are pulling out of an agreement signed last year with Public Service Company of New Mexico regarding the utility’s plan to replace coal power at the San Juan Generating Station near Farmington.
The Renewable Energy Industry Association and the New Mexico Independent Power Producers withdrew their support for a stipulation signed Oct. 1, in part because PNM underestimated the cost of coal in its original power replacement plan.
Several parties and PNM agreed in the stipulation on a number of issues related to the utility’s request to abandon two of four coal-fired units at San Juan and replace the power with other sources.
A hearing before state regulators over the power replacement plan began Jan. 5 and will continue through Friday.
In an earlier setback for PNM, the city of Farmington and its utility, which own a portion of the San Juan Generating Station, decided not to buy any additional capacity that will be available when other partners leave the power plant in 2017.
Steve Michel, an attorney for Western Resource Advocates, an environmental law and policy nonprofit that also signed the stipulation, said his group is concerned about both the Farmington decision and the withdrawal of the renewable energy groups and is “in the process of evaluating how it may respond.”
PNM said it still believes the power replacement plan presented to state regulators remains the best option for customers and investors, according to spokeswoman Susan Sponar. The plan proposes adding nuclear power, natural gas and 40 megawatts of solar power in addition to more coal capacity at San Juan. The plan will reduce coal power, reduce pollution and water use, reduce financial risks and provide reliable power to customers, Sponar said.
The stipulation reduced the plan’s cost to customers and increased the amount of renewable energy by an additional 50 megawatts, Sponar said. The stipulation also extends a program that benefits customers with rooftop solar for three years after it was to end in 2016.
In its motion to withdraw, the Renewable Energy Industry Association said that “PNM understated the fuel cost for coal.” The group also is angered over PNM’s announcement in a recent rate case that it would seek to charge people with rooftop solar an “access fee” for hooking into the electric grid. PNM’s promise to extend the rooftop solar program while charging rooftop solar owners an extra fee in a separate rate case “smacks of bad faith,” the motion said.
In a document filed Tuesday with regulators, Robb Hirsch, executive director of Independent Power Producers, said the group had signed the stipulation largely to protect its right to protest coal issues later. He said the organization also was withdrawing, given new information about the costs of PNM’s plan.
Renewable energy advocates and environmental groups believe PNM can replace the coal power at San Juan with a combination of natural gas, wind and solar at an affordable price.