Hannah Grover, Farmington Daily TimesPublished 12:35 p.m. MT June 25, 2020 | Updated 3:11 p.m. MT June 25, 2020.
AZTEC — New Mexico Public Regulation Commission hearing examiners have recommended possible scenarios for replacing the electricity that Public Service Company of New Mexico currently receives from the San Juan Generating Station.
These scenarios include one that does not include options that use fossil fuels.
The coal-fired power plant located in Waterflow was scheduled to operate until 2023. Then, in 2005, PNM asked for permission to extend the plant’s life through 2053 following various upgrades. The PRC approved that extension. In 2017, PNM announced plans to close the power plant in 2022 despite having its life extended through 2053.
The recommended decision documents were posted on the PRC’s case lookup site on June 24. They are more than 180 pages long and detail the history of the case as well as the reasoning behind the recommendations.
The utility filed an application in July 2019 to replace the power from the San Juan Generating Station with a mixture of solar and natural gas.
A variety of organizations including environmental advocacy groups, Westmoreland Mining Co. and the City of Farmington, as well as San Juan County, intervened in the case. That allowed them to present arguments and provide testimony and witnesses in the case.
The Energy Transition Act, which provides a template for moving from fossil fuels to clean energy sources, also became law in 2019.
The new law means the PRC must consider different factors while deciding on the best portfolio for replacing the San Juan Generating Station.
The hearing examiners suggested two alternative approaches the PRC could follow. The first would prioritize locating resources in Central Consolidated School District boundaries in an effort to maintain the property tax base that CCSD relies on. It would have a secondary emphasis on environmental impacts while also considering cost and reliability.
“The cost has to be reasonable, but it appears to be a factor that can be outweighed by location, environmental impacts and reliability,” the recommended decision states.
The second approach would be to make a decision like the PRC traditionally has done in the past, prioritizing the lowest cost alternative that can provide reliable service to customers.
Under the first approach, the hearing examiners recommended a portfolio proposed by the environmental advocacy group Coalition for Clean and Affordable Energy. This proposal does not have any fossil fuel generation attached. Instead it calls for 650 megawatts of solar with 300 megawatts of battery storage. This would include 430 megawatts of combined solar and battery in CCSD, which would be a $447 million investment into the community. It also calls for solar and battery located in McKinley and Rio Arriba counties.
Using the same approach, the hearing examiners said one of PNM’s scenarios would rank second. That proposal would lead to 440 megawatts of natural gas generation as well as 100 megawatts of solar and 30 megawatts of battery storage within CCSD boundaries.
The hearing examiners stated that the natural gas units would continue emitting carbon dioxide, which makes the CCAE proposal more environmentally friendly. At the same time, the recommended decision states that the CCAE proposal would lead to ratepayers paying more for electricity than under PNM’s proposal.