Investigation & Cost-Benefit Analysis Before Any Further Investment in San Juan


On March 17th a San Juan Coal Generating Station Unit 1 coal silo collapsed causing an explosion and fire. Since that date Unit 1 has been inoperable. Public Service Company of New Mexico (PNM) plans to repair that 45-year-old coal unit and ultimately have New Mexican ratepayers pay to fix it.

Last week organizations from throughout the state joined filed a Joint Petition calling for a NM PRC Investigation into PNM’s San Juan Generating Station Unit 1 Coal Silo Collapse & Explosion

See the Press Release HERE.

Read the Farmington Daily Times Article HERE.

Read the Santa Fe New Mexican Article HERE

Read the Albuquerque Journal Article HERE.

New Energy Economy, on behalf of nine other Native, Hispanic, health, and environmental organizations, filed a Joint Petition requesting that the New Mexico Public Regulation Commission investigate the cause of this collapse, an explanation of how much replacement energy will cost ratepayers now and in the future, and most importantly a comprehensive cost benefit analysis to determine if any further investment in San Juan is reasonable and consistent with the long-term financial well-being of ratepayers compared to an investment in other energy resources.

According to PNM, the San Juan coal plant is not cost-effective for ratepayers after 2022. In fact PNM has already testified that purchasing energy on the open market is cheaper today than energy costs from San Juan.

Before PNM invests any more millions of dollars shouldn’t there be an adequate financial analysis to determine if ratepayers would save more money investing in alternative energy sources? If continuing to purchase on the open market is cheaper? PNM should have to prove that additional capital (repair) expenditures are worthwhile. 

In addition to an investigation into the cause of the coal silo collapse and explosion, this joint petition requests that PNM evaluate and report on all viable alternative options before investing millions of dollars into San Juan. 

PNM claims that their insurance and current operation and maintenance budget will cover the costs of repair such that ratepayers will not experience another rate increase due to this coal silo collapse and explosion. Its common sense that when an incident of this magnitude occurs, standard practice would be to re-evaluate the investment in and extension of the life of the plant given the availability of cheaper and less harmful alternatives.

Millions of dollars for ratepayers are at stake. Regardless of whether or not its in the budget - the PRC should require PNM to spend our money wisely - those millions could be spent on renewables and create savings for all of us.