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New tech a threat to utility status quo

Chairman of the New Energy Economy board Michael Mccally argues against PNM investing in more dirty energy and demands more transparency and honesty. PNM's plan doesn't add a single job or address the global demise of coal, and new federal funds are becoming available to support displaced coal workers and their families. Meanwhile, several recent examples show renewables being "seamlessly integrated" onto nearby utility grids at extremely low cost.

By Michael Mccally / Chairman Of The Board, New Energy Economy PUBLISHED: Thursday, July 16, 2015 at 12:02 am

Solar energy makes utility companies nervous.

New technologies in energy production and use, changes in the relative prices of gas, oil and renewable energy all threaten the 100 year-old utility business model.

Some investor-owned utilities like PNM are doubling down on the old model, arguing for a coal and nuclear-based status quo.

PNM is currently burning coal and nuclear 72 percent of the time while neglecting solar and wind.

PNM is proposing to buy more coal from fleeing co-owners who are exiting the plant at the San Juan Generating Station.

PNM wants us to focus on how much coal they are closing, which is good, but the case before the Public Regulation Commission is about PNM acquiring more coal for us. This is at a time when the coal market is collapsing. Stock prices of Peabody, Arch Coal and Alpha Natural Resources have fallen dramatically in the last 12 months, from more than $75 to about $1 a share.

PNM owns with its partners, Palo Verde 3 nuclear power plant in Arizona and would like to bring it into rates at more than two times what they can sell it for on the open market so that New Mexico utility customers would bear the burden of very high operating costs at the plant and the future expense of waste storage, clean-up and decommissioning.

Importantly, the New Mexico Environmental improvement Board and the U.S. Environmental Protection Agency did not approve PNM’s “plan” to add 132 megawatts of coal capacity from San Juan and did not approve PNM’s “plan” to move Palo Verde nuclear into rates.

PNM’s own testimony in the PRC case was that their “plan” would not create a single job. Coal workers in New Mexico as elsewhere in the country are at risk of losing employment as coal production and use continues to decline.

Federal funds are potentially available for support of distressed or displaced coal workers and their families. In February the Obama administration announced the Power+ plan to support communities undergoing coal job loss. Some funds have been released to Kentucky and West Virginia, and we believe Arizona. Appropriations to fully implement the program are likely in the near future.

Power + stands for Partnership Opportunity Work Force and Economic Revitalization and the plan has a number of elements including more than $1 billion for health care for coal workers, retraining for coal workers, clean up of closed mines and remediation of polluted waterways. Such funds could provide substantial support for distressed communities in the Four Corners and the Navajo Nation.

It is illogical to dismiss solar and wind just because it is not available 24/7.

Ample evidence exists that renewables have been integrated onto the grid “seamlessly” in Colorado, Texas and Nevada at incredibly low cost. New Mexico’s Southwestern Public Service Co. has an application before the PRC to buy 140 megawatts of solar at 4.2 cents to save customers money; Nevada Energy has just solidified a deal for 3.8 cents for 100 megawatts of solar energy.

Solar is a hedge against rising fossil fuel rates!

PNM’s data shows that San Juan has a history of very poor reliability, as publicly reported by PNM. In 2013 and 2014, this facility was not available for production 25 percent of the time.

Further, during the peak summer hours, when it is needed most to meet customer demands, it actually operated at 25 percent below capacity, meaning something broke at San Juan.

Yet, PNM’s own data shows that solar is a very solid resource to meet peak customer demands.

When the sun shines, air conditioners run, creating peak demand and strong solar power output.

PNM has never acknowledged the human health consequences of coal burning, the illness and disability well appreciated by residents of the Four Corners.

PNM never mentions the relationship between its operations, CO2 emissions and climate change. This acknowledgement is required by candor, common sense and public accountability.

Omission may be the worst kind of deception.

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