Facts on the future of coal-fired San Juan Generating Station

For decades, PNM’s San Juan Generating Station – a coal-fired power plant near Farmington, New Mexico – has threatened our air, land, and water with toxic pollution. From soot and smog to arsenic and mercury, the harmful pollution from the plant has endangered the health and well-being of families throughout the Four Corners region. Today, our state and public officials face a choice: prolong the life of one of our region’s greatest public health threats or take this opportunity to transition to clean renewable energy.

PNM’s Plans To Burn More Coal

Following an order by the U.S. Environmental Protection Agency for PNM to reduce dangerous emissions from the plant, PNM announced a plan to comply involving the retirement of two units at the plant and installing expensive and less effective pollution controls on the remaining units of the plant.

To replace the “lost” power from the San Juan Generating Station as a result of retiring two units, PNM has proposed to invest in a combination of other expensive fuels and even increase their reliance on one of the remaining coal units at the San Juan Generating Station, which would lock PNM into burning coal at the plant for years to come.

Today, PNM’s plans to replace the power at the San Juan Generating Station are being considered by the New Mexico Public Regulation Commission under what is called an “abandonment case.” The New Mexico Public Regulation Commission will decide whether to approve PNM’s plans to pursue this menu of replacement power options or whether other cheaper, safer and cleaner options must be considered.

The Risks of Continuing To Burn Coal At The San Juan Generating Station

In addition to the public health threats of continuing to burn coal, enormous financial risks to PNM’s plans have emerged.

Earlier this year, PNM acknowledged that due to an accounting error, the cost estimate for their plan to continue burning coal at the San Juan Generating Station and to spend money on other expensive fuels had increased by over $1 billion. This comes just weeks after PNM introduced a rate proposal that, if approved, would result in nearly a $10 per month increase to the average residential home bill due to utility’s plans to continue burning coal at the plant for the foreseeable future and other utility costs. According to a report from the Santa Fe New Mexican, the costs of the overrun will fall to ordinary New Mexico ratepayers.
In addition to the growing financial costs and risks to ratepayers, the question of where the plant will get its coal after its contract runs out in 2017 remains. The San Juan Generating Station is what is known as a “mine mouth plant,” which means it procures all of its fuel from the adjacent San Juan Coal Mine. Late last year, the current owner of the San Juan mine abandoned the mine, leaving it without an owner and the San Juan Generating Station without a fuel supply after 2017.In December, Tucson Electric Power in Arizona, a part owner of the plant, said that it would not purchase the San Juan coal mine, placing more risk on PNM to either purchase an expensive, dirty coal mine or construct a new mine to provide fuel to the plant.

Support for continued burning of coal at the San Juan Generating Station has fallen as admissions by the company revealed serious financial risks for the future of the plant, including the uncertainty of where the plant will get its coal after 2017 and who will own the plant after an ownership contract runs out in 2022. Of the nine parties that originally supported PNM’s proposal to continue burning coal at the San Juan Generating, over half of the original supporters (six organizations), including clean energy and environmental advocates, have pulled their support for the proposal. Other New Mexico stakeholders have also pulled away from an agreement that would continue PNM’s use of coal at the plant, citing the overall uncertainty about San Juan’s operations. The home city of the plant, Farmington, New Mexico, announced earlier this year that it would not acquire an increased stake in the plant due to concerns about the plant’s reliability and the huge costs that would be passed on to the community.

What’s Next?

The New Mexico Public Regulation Commission is expected to make a decision on PNM’s proposal sometime this spring. In addition to the “abandonment case” that will be decided this spring, PNM also has what is called a “rate case” before the PRC. A rate case is where the PRC will decide how much PNM can charge for its energy and different projects, including the utility’s plans to continue burning coal at the plant. If the PRC approves PNM’s plans for the San Juan Generating Station under the “abandonment case,” the costs of the plan would then be factored into the “rate case” for the PRC to decide whether ordinary New Mexico ratepayers will be liable for the huge costs of continuing to burn coal at the plant and invest in other expensive fuels. Along with the costs of PNM’s proposal to continue burning coal at the San Juan Generating Station, PNM also wants to tax rooftop solar users through a monthly solar charge and elimination of a banking option for energy generated.

What can YOU do?

This is a critical time for our community to stand together and urge our public officials that the time is now to protect New Mexico families and start building a clean energy economy that puts New Mexico families over big polluter profits.

Clean energy isn’t just the safe choice – it’s the smart one. New Mexico can and should be a national leader in wind and solar. Wind already powers the equivalent of more than 200,000 homes in New Mexico – but if the state embraced its full potential, it could meet its energy needs more than 70 times over just with wind.

By increasing the amount of power we get from clean energy like wind and solar, we can create good jobs for workers, protect families and small businesses from expensive coal rate hikes, and secure a stronger future for our communities. All while reducing our risky dependence on dirty, expensive coal-fired power plants.

Go to sc.org/PNMRiskyPlan and tell the PRC to protect New Mexico ratepayers and reject PNM’s plans for more dirty, expensive coal pollution.

Camilla Feibelman, Rio Grande Chapter Director:

Featured photo by Señor Codo

Facts on the future of coal-fired San Juan Generating Station