PNM looks at possible power plant closure in 2022

FARMINGTON – Public Service Company of New Mexico announced today that it has conducted a preliminary analysis of its future energy-providing options, and said the analysis indicates that retiring the two remaining units of the San Juan Generating Station in the Farmington area in 2022 could provide long-term benefits to customers, according to a PNM news release.

"I want to stress that this is only a preliminary finding regarding our San Juan Generating Station," said PNM Resources President and CEO Pat Vincent-Collawn in the release. "No decisions have been made. We have a lot of work to do and will be having discussions with the other owners and considering public input before the (Integrated Resource Plan) is finalized and ready to submit to the PRC."

The preliminary analysis also indicates that retiring the station would provide PNM with a chance to increase renewable energy production, as well as provide operational flexibility.

The analysis is part of an ongoing process to create the Integrated Resource Plan, or IRP.

PNM is required to file an IRP every three years, in which it analyzes a range of future energy supply options and identifies a resource portfolio that will most effectively balance reliability, affordability, and environmental responsibility.

The process involved in putting together the IRP, which looks ahead 20 years, includes seeking public input through open meetings and evaluating large amounts of data. The IRP also includes a detailed action plan for the next four years.

PNM spokesman Dan Ware repeated to The Daily Times in an email that no decisions have been made.

"Operations at the plant will continue as normal at least through 2022, as stipulated by our current operating agreement and coal sales agreement," said Ware.

Environmental groups are applauding the findings of PNM's preliminary analysis.

"PNM's announcement about possibly closing the San Juan coal plant in 2022 is a clear sign that coal is not economically sustainable," said Camilla Fiebelman, director of the New Mexico chapter of the Sierra Club, in a release. "Now is the time to focus on an economic transition for the hardworking families in northwestern New Mexico. Fortunately, there is vast solar resource potential and a massive transmission network that can be used to create clean-energy jobs that can provide affordable, reliable energy to the region. This will require immediate and thoughtful action from PNM, the state, local government, and other local stakeholders."

Mariel Nanasi, executive director of the environmental group New Energy Economy, provided a similar reaction via a news release.

"It's critical that some of this renewable energy transition take place to benefit San Juan County where the plant is closing," she said. "It's also really important that PNM take responsibility for cleaning up and remediating the toxic coal plant and mine, assisting workers, and doing its fair share on all the financial issues around closure."

San Juan County CEO Kim Carpenter expressed a much darker view regarding a possible plant closure.

"It's going to be a major blow to this area, as seven out of 10 taxpayers in San Juan County are related to the power industries," he said. "We're staring at losing hundreds of hundreds of jobs."

Carpenter expressed doubt that any sort of renewable energy replacement developed by PNM would be constructed in the county.

"They will have to look at where big populations of their customer base are," he said. "It's just really hard at this point in time to know what to anticipate."

Carpenter said that environmental groups such as the New Energy Economy are a negative factor for the local economy and for the job situation.

"These people are so radical, they're ruining people's lives and distorting facts. There needs to be a balance," said Carpenter.

Carpenter did express some hope that the discussion might turn back to finding ways to keep the plant open prior to the five-year deadline suggested by the preliminary PNM analysis.

"There's still a lot of time to see where everything will hit," he said. "PNM's been a great partner in the community and I would hate to see them go, We understand business is business, but hundreds of families will be affected by this, and it will also have a devastating effect on the Navajo Nation."

PNM is already scheduled to retire units two and three at the San Juan Generating Station by the end of this year while continuing to operate units one and four until at least 2022.

PNM will be holding additional public advisory meetings before filing the IRP with the PRC in July.

"It's vital for the public to be involved in this collaborative planning process, and we will continue to need their input as we look to finalize the IRP by this summer," said Vincent-Collawn. "We understand and recognize the fact that retiring the station would impact not only the local economies of Farmington, San Juan County and the Four Corners, but the state of New Mexico as well."

More information about the IRP process can be found at https://www.pnm.com/irp.

Leigh Black Irvin is the business editor for The Daily Times. She can be reached at 505-436-0853.