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Our view: PNM support waning in Albuquerque?

Posted: Thursday, April 2, 2015 7:22 pm | Updated: 12:20 am, Fri Apr 3, 2015.

The New Mexican | 3 comments

Albuquerque’s City Council is considering a resolution Monday that could affect Santa Fe — indeed, all of New Mexico that relies on the Public Service Company of New Mexico for its electricity.

The council — with a resolution introduced by Republican Councilor Brad Winter — could decide to withdraw support for a stipulated agreement on the future of the coal-fired San Juan Generating Station, which produces electricity for PNM customers. The agreement was designed to bring the plant into compliance with federal haze regulations.

That deal, announced in 2013 by Gov. Susana Martinez, PNM and the Environmental Protection Agency, has been losing support as more has become known about the long-term costs of the plan. (The city of Santa Fe has been opposed to PNM’s replacement plan from the start.)

In the original deal, PNM agreed to close the San Juan Generating Station Units 2 and 3, install pollution controls on Units 1 and 4 and reduce state permit levels for nitrogen oxides and sulfur dioxides. At the time, it was seen as a big step forward in controlling air pollution and ensuring PNM’s energy sources for the future — the replacement plan is a mix of coal, natural gas and renewable energy sources. That has changed.

According to the new resolution, Albuquerque’s City Council originally supported the deal because it seemed to represent the cheapest alternative for ratepayers. Since PNM’s cost figures have changed, the city of Farmington has withdrawn its intention to acquire an additional 65 megawatts in the San Juan Generating Station’s Unit 4 (the PNM parent company, PNM Resources, could pick up the slack). Other supporters of the deal are backing away, making their disapproval known to the State Public Regulation Commission, which regulates utilities.

The New Mexico Independent Power Producers, which initially supported the deal, made it clear in January testimony to the PRC that it believes the portions of the stipulated agreement are unraveling — and that PNM seems to be increasing its commitment to coal as others step back from the San Juan Generating Station.

The issue, of course, is what ratepayers will pay in coal cleanup costs over the long term, not to mention concerns about air pollution.

Much is at stake — clean air, the reliability of future energy sources, cost to ratepayers. Albuquerque’s withdrawal of support would be a clear signal that this stipulated agreement needs to be improved.

We hope the City Council of Albuquerque pulls its support, and that PNM is listening — so that a better strategy can be set for all of its customers.


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