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PRC delays decision on San Juan Generating Station

In a 4-1 vote, the PRC voted to grant PNM a two month extension to ascertain the necessary coal contracts the commission says it needs to fully assess the replacement power stipulation. Lone dissenting voter Valerie Espinoza and other intervenors in the case say the PRC has been excessively accommodating to PNM already, having waited 18 months for any indication that coal is a viable economic option, which it clearly is not.

Posted: Wednesday, May 27, 2015 7:20 pm | Updated: 10:35 pm, Wed May 27, 2015.

By Steve Terrell The New Mexican

Public Service Company of New Mexico’s proposal to revamp the coal-burning San Juan Generating Station near Farmington is still up in the air after it received another reprieve Wednesday from a regulatory agency, rankling conservation groups and an elected official involved in the case.

The state Public Regulation Commission gave the utility up to another two months to complete a contract with a coal supplier and an ownership restructuring agreement for the plant.

The vote authorizing the delay for PNM was 4-1. Commissioner Valerie Espinoza, D-Santa Fe, cast the dissenting vote.

“I think it’s time to vote this thing down once and for all,” Espinoza told fellow commissioners. “It’s too important to the people of New Mexico to be granting exceptions.”

After the meeting, Espinoza said the extension “sends a bad message to consumers.”

One of the commissioners who voted for the delay also had harsh words for PNM.

“We need to send a very stern message to PNM,” said Commissioner Lynda Lovejoy, D-Crownpoint. “I strongly feel that PNM has not made a good-faith effort.”

Commission Chairwoman Karen Montoya, D-Albuquerque, said the normal procedure is for the commission to review proposals in which business contracts have been signed, and then vote on them. This is not what happened with PNM’s San Juan proposal, aimed at continuing to use coal at the power plant.

But later in the hearing, Montoya said she would support the extension for PNM. “It’s important all the information is vetted,” she said.

PNM is closing two coal-burning units at the San Juan Generating Station in 2017. But the company wants to increase the coal-burning capacity in the remaining units to help make up for the lost power from the two closed units. The company also proposes adding a natural gas plant, nuclear power from the Palo Verde plant in Arizona and some solar power.

In April, a hearing examiner for the Public Regulation Commission recommended the San Juan plan be rejected because PNM had not provided information on a supplier and a price on the coal it intends to use. Earlier this month, PNM announced that it had signed an “executed letter agreement” with Colorado-based Westmoreland Coal Co. and a proposed restructuring agreement with new co-owners.

PNM spokesman Pahl Shipley told The New Mexican after the hearing that the contracts — which have not been consummated — “make the PNM plan even more cost-effective for customers. We appreciate the commission’s efforts to thoroughly examine the plan in front of them.”

But conservation groups that have intervened in the case argue that these contracts don’t constitute a final, binding agreement for coal supply or an ownership restructuring agreement. At this point, the proposals are still confidential, not in the public record.

Chuck Noble, a lawyer for the Coalition for Clean, Affordable Energy, said after the hearing that the commission “has bended over backwards for PNM.” Noble said the majority on the commission had foreclosed the possibility of allowing for other resources to be used to create electricity.

Mariel Nanasi, executive director of New Energy Economy, agreed.

“It’s been 18 months,” she said, referring to the time that PNM first proposed the plan. “They still don’t have a price for the coal.”

Nanasi said reinvesting in coal or nuclear power does not make sense. By proposing coal-powered energy, she said, PNM in effect is offering a “1970 Pontiac, at twice the price, instead of a new hybrid.”

In a news release issued after the hearing, Nellis Kennedy-Howard of the Sierra Club’s Beyond Coal campaign said, “Rather than delaying this important decision any further, it’s time for the PRC to act and reject PNM’s risky plan for the San Juan Generating Station and demand that PNM create a sustainable plan to transition to clean energy that will create long-term certainty and spur economic development for the Four Corners region.”

Another conservation group, Juntos, released a similar statement, saying, ““It is disappointing that a majority of the commissioners voted to put PNM’s concerns above those of New Mexicans and give PNM yet another extension to finalize these contracts.”

The order approved by the commission gives PNM until June 3 to ask for additional time to submit signed agreements with the coal company and new owners. If the PRC grants additional time, the order says, “Under no circumstances will any extension extend beyond Aug. 1, 2015.” The utility had requested an extension with an Aug. 31 deadline.

Contact Steve Terrell at Read his political blog at


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