Victory in Albuquerque: City opposes PNM’s replacement power plan

June 2014

Albuquerque Joins Coalition for Energy Transformation: Economic Drivers Central to Decision

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Albuquerque has joined a growing coalition that opposes PNM’s replacement power plan. Now official policy, bill R-14-59 objects to PNM’s proposed plan to further invest in coal and nuclear energy to replace the closing San Juan coal plant Units 2 & 3 and calls to reduce or deny the request for unearned profits of $250 million dollars (the amount the company expected to make on units 2 & 3, closing per EPA mandate). The bill outlines Mayor Berry and the City of Albuquerque’s intention to take proactive stances to transition our energy dependence from climate-destabilizing resources to renewables.

In June, the Albuquerque City Council voted 5-4 to approve this bill, urging the New Mexico Public Regulation Commission to modify PNM’s replacement power plan and claims for cost recovery.

The Council’s vote came after a public hearing, which saw high levels of public participation. Thanks to all who gave persuasive and passionate testimonies, especially to our friends at 350-NM, Center for Civic Policy, Conservation Voters of New Mexico, Sierra Club, and the Albuqerque Climate Coalition. At the time of the vote, the Councilors had received hundreds of letters from petitioners in support of the resolution and heard from public health advocates, doctors, local business owners, teachers, students, religious leaders, environmentalists, solar CEOs and installers about why they should support the resolution. Reasons stated include: the need to move away from coal because of impending escalating price increases due to environmental standards for carbon, coal ash, mercury, effluent water, all which impact air and water quality; the environmental, health and financial risks of nuclear energy; public health costs of coal; and concern for the financial exposure associated with both coal and nuclear investment.

PNM seeks to replace power from the closure of SJGS units 2 and 3 by purchasing 132 MW of additional coal capacity in SJGS Unit 4, importing 134 MW from Palo Verde 3 nuclear power into rates (heretofore specifically denied by the NM PRC), reinvest in SJGS units 1&4 by adding pollution controls, at a cost of $82 million, instead of setting dates certain for their closure. In addition, PNM seeks to build a 177MW gas plant in Farmington and 40 MW of solar. PNM also seeks to “recover its undepreciated investment” in SJGS units 2 &3 which translates to an additional $250 million charged to ratepayers.

The bill directs the Mayor to urge the PRC to:

  • Require that PNM’s replacement power plan include as much renewable energy as is technically and economically feasible;
  • Deny or reduce PNM’s claim for un-depreciated “stranded” assets;
  • Require that PNM reduce carbon-dioxide emissions associated with its utility service in amounts consistent with what the vast majority of climate scientists conclude is necessary to avoid the most severe impacts of climate change;
  • Consider in their analyses the total environmental, health and societal costs of coal produced energy.

The City of Albuquerque joins a growing coalition of organizations and public agencies who are concerned that PNM’s proposal does not offer the least cost scenario for ratepayers, nor the best outcome for the environment, or New Mexicans’ health. New Energy Economy is leading the development of an alternative proposal based on solar and wind energy that will boost the state’s renewable energy portfolio to 30%.

New Energy Economy is leading the development of an alternative proposal based on solar and wind energy that will save the ratepayers hundreds of thousands of dollars and will take us from 7% (2% solar, 5% wind) to 30% renewables. This is not only the most cost-effective option, but it will create thousands of family-supporting jobs, drastically reduce water consumption, and be better for the environment and health of our children.

A particular concern, raised by a number of the public spokespersons, is the enormous water use required for coal and nuclear energy production. The source for Albuquerque’s drinking water is the San Juan River, the same source for PNM’s San Juan coal plant.

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