Farmington, Enchant Energy say PNM could force San Juan Generating Station closure

AZTEC — The City of Farmington and Enchant Energy allege that Public Service Company of New Mexico may try to force the San Juan Generating Station to close in 2022 despite efforts to retrofit the power plant and keep it open.

This comes as the Federal Energy Regulatory Commission is considering a pending merger between Public Service Company of New Mexico’s parent company and Avangrid, a subsidiary of the Spain-based global energy company Iberdrola.

The City of Farmington and Enchant Energy have filed a motion to intervene in the merger case that is currently before the FERC. 

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The city and Enchant Energy have requested an evidentiary hearing to address the concerns expressed in the motion to intervene.

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PNM is the majority owner and operator of the San Juan Generating Station, however Farmington owns a share of unit four at the power plant. A partnership agreement between the various owners allows Farmington to acquire the San Juan Generating Station from PNM. The city hopes to transfer the majority ownership to Enchant Energy. Negotiations for the transfer of ownership are still ongoing.

Several studies done on behalf of PNM, including a transmission study and a market power analysis, did not consider the impact of continued operation of the San Juan Generating Station.

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This has led Farmington and Enchant Energy to be concerned that PNM and Avangrid intend to force the San Juan Generating Station to close. This could be done by failing to reach a transfer agreement with the City of Farmington. Additionally, Farmington and Enchant Energy expressed concerns that, even if they successfully negotiate a transfer agreement, the San Juan Generating Station could be cut off from the transmission infrastructure needed to sell the power it would generate.

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They allege that forcing the closure of the power plant could benefit PNM and Avangrid by stifling competition and freeing up transmission capacity. 

PNM denied the allegations that Enchant and Farmington made in the motion to intervene.

"The PNM-Avangrid merger has no impact on the potential Farmington-PNM negotiations related to the San Juan site," PNM said Thursday night in an emailed statement to The Daily Times. "There are no changes to the form, structure, or rights in the current negotiations impacted by the merger."

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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