Legislators discuss priorities as generating station closure looms

FARMINGTON — State Rep. Rod Montoya, R-Farmington, said he wants community members to know their local legislators are committed to fighting to keep the San Juan Generating Station running or viable for an operator to run.

Montoya said he thinks a recent meeting of the state Economic and Rural Development interim legislative committee in Farmington marked the first time state lawmakers heard the issues that the local delegation believes are the most important for San Juan County’s future.

“Jobs are the number one priority,” Montoya said when reached by phone Thursday.

He said the second priority is the tax base.

If the San Juan Generating Station closes, San Juan County will lose $2 million in property tax revenue and the Central Consolidated School District will lose $3.6 million in property tax revenue. Those statistics were presented to the visiting legislative panel by Sally Burbridge, the senior vice president of economic development for Four Corners Economic Development.

The two main owners of the generating station — Public Service Company of New Mexico and Tucson Electric Power — have said they plan to close the power plant when its coal supply agreement ends in 2022.

The committee chairwoman Rep. Debbie Rodella, D-Española, changed the committee’s schedule to bring it to San Juan County.

Legislation introduced this year did not pass

Last legislative session Sen. Steve Neville, R-Farmigton, and Sen. Jacob Candelaria, D-Albuquerque, sponsored Senate Bill 47, which would have provided local funding for economic development and allowed Public Service company of New Mexico to recover some of the money the company has invested in the coal-fired power plant that it hasn’t yet recouped from ratepayers.

The bill ultimately failed.

“This isn’t a problem we can absorb by doing business as usual,” Candelaria said on Tuesday.

Candelaria said the reality of what San Juan County is facing when the power plant closes should “strike fear into every member of the legislature.” He added that it is a “moral call for all of us.”

Legislators outline priorities

Montoya joined Neville and Sen. William Sharer, R-Farmington, highlighting priorities the delegation has for the next legislative session in terms of the San Juan Generating Station during the committee meeting

The top priority on the list is keeping the San Juan Generating Station open until 2027 or 2032. While that decision ultimately lies in the hands of the Public Regulation Commission, which regulates private utilities, Montoya said the legislature could pass bills that would essentially ensure the generating station closes in 2022.

Montoya explained that the PRC could ask PNM to submit alternatives, including ones that would require the company to look for new buyers.

Montoya said local legislators are working to prevent the permanent closure of the San Juan Generating Station, including finding potential buyers for the facility.

Replacement power could help with property taxes

If the generating station does close, Montoya said they want to ensure the replacement power is built within San Juan County, and specifically within the Central Consolidated School District.

Neville said natural gas and solar facilities could be built in San Juan County.

“The tax base would be somewhat shored up,” he said.

However, Neville said those facilities would not completely replace the tax base from San Juan Generating Station.

Leaders ask for funds for economic development

Senate Bill 47 proposed $19 million of funding for economic development in San Juan County.

Burbridge said $19 million would barely scratch the surface of what is needed to diversify the economy and attract new businesses.

For example, the city of Farmington is looking at spending $3.45 million on work at the Four Corners Regional Airport to enable the airport to attract commercial air service after the sole commercial airline serving Farmington left last year.

Burbridge said other needs include expansion of fiber infrastructure countywide and creating buildings ready with utilities for new businesses to inhabit.

Montoya said the funding should also include money to help Farmington Electric Utility System recoup the $30 million of investments it has made into the San Juan Generating Station that will be lost if the power plant closes.

He said $19 million is not enough.

“$50 million would be a better starting point,” he said.

Other priorities include rail, natural gas

Other priorities include bringing railroad back to San Juan County as well as pipelines to ship natural gas out of the area.

He said the state should pass legislation to incentivize school districts, municipalities and counties to transform their vehicle fleet to run on natural gas.

“That’s something that is produced in New Mexico,” he said.

He added that natural gas is at the core of the San Juan County economy.

In addition, Montoya said increased natural gas production would mean more severance tax for the state.

Possible 2019 legislation already in the works

Proposed legislation presented last month to the Water and Natural Resources interim committee called for replacement power not producing more emissions than a clean natural gas plant. Neville said that would essentially destroy the ability of the San Juan Generating Station operating again. The local leaders are trying to find buyers for the San Juan Generating Station.

The proposed legislation also calls for a 50 percent renewable portfolio standard for Public Service Company of New Mexico.

Neville criticized having a renewable portfolio standard that only applies to PNM when the state renewable portfolio standard is scheduled to expire. He said legislators will need to decide in the upcoming legislative session if the state will extend the renewable portfolio standard.

“In my mind, it would be better to deal with renewable portfolio issues in that legislation,” he said.

The proposed bill would not address job loss, Neville said. When the generating station closes, the associated coal mine will also close. Local leaders estimate 1,500 people will lose their jobs. Neville said it takes 30 to 40 people to run a natural gas generating station.

“All this would do as far as San Juan County and Central Consolidated School District’s concerned would deal with the property tax issue,” Neville said.

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