By Nellis Kennedy-Howard, Senior Beyond Coal Campaign Representative
PNM continues to scramble in a last-minute attempt to finalize agreements that would allow for the continued burning of coal at the San Juan Generating Station.
The Public Regulation Commission (PRC) voted 4-1 to allow PNM additional time to file signed ownership agreements and coal-supply agreements with the commission, extending PNM’s deadline to Aug. 1. Commissioner Valerie Espinoza dissented, saying it’s time to reject PNM’s plan.
In May, PNM filed draft, non-binding agreements, which if finalized would lock the utility and its ratepayers into San Juan Generating Station for the foreseeable future. Under the draft coal-supply agreement with Westmoreland Coal Company, a Colorado-based mining operation, the prospective buyer would only continue operations at the San Juan mine until 2019 and proceed to close the mine and dismiss the workforce after the draft contract expires.
Meanwhile, PNM’s plan to continue burning coal at the San Juan Generating Station continues to face hurdle after hurdle.
Most recently, the Albuquerque Bernalillo County Water Authority challenged PNM’s ability to acquire coal capacity interest from exiting owners without seeking prior approval from the commission. As a public utility, class transactions involving the purchase of securities or other ownership interests are subject to commission approval.
PNM’s plan to continue burning coal at San Juan Generating Station remains risky, unreliable and expensive. The cost of PNM’s plan has risen by more than $1 billion. Stakeholder after stakeholder has indicated opposition to PNM’s plan, and the City of Albuquerque has passed a resolution formally opposing PNM’s plan. In his recommendation to the PRC commissioners, Ashley Schannauer, the independent hearing examiner overseeing PNM’s request to the commission, also expressed his concern that customers would be harmed by PNM’s plan. “The stipulation as a whole does not produce net benefits to the public,” said Schannauer. “The dollar impact of the risks, however, appears to significantly exceed the dollars saved.”
The recommendation highlighted the risk that customers may be left holding the bag for a plant that is proving to be a far greater liability than previously disclosed.
“PNM’s increasing ownership and responsibility for San Juan may pressure PNM to continue to act as the owner of last resort, absorbing exiting owners’ shares to protect its investment even if the plant has become uneconomic — in a version of the ‘too big to fail’ syndrome,” Schannauer continued.
The writing is on the wall. PNM’s plan for San Juan is unreliable, risky and expensive.