PNM’s last-ditch attempt to lock N.M. into aging coal plant

ALBUQUERQUE – On May 1, the Public Service Company of New Mexico filed a draft, non-binding coal supply agreement and ownership contract for the San Juan Generating Station. As support for the San Juan Generating Station continues to plummet, PNM is trying to fill the ownership void left by groups exiting the plant, becoming the perpetual owner of last resort and jeopardizing the financial security of New Mexico families for years to come.

In response, Nellis Kennedy-Howard, Senior Representative for the Sierra Club’s Beyond Coal campaign, issued the following statement:

“New Mexico families want and deserve clean air and clean energy, not more dirty, expensive coal-fired power. Yet PNM’s draft proposals will increase the risks and liabilities to New Mexico families by positioning the utility as the owner of last resort for the outdated, expensive San Juan Generating Station. PNM’s statements on their new draft proposals do nothing to address the already enormous cost increases of the plan, the plummeting support for their proposal, or resolve the questions over who will own the plant after 2022. Now, PNM wants to lock our communities into even more coal power. We deserve better.

Our public officials at the Public Regulation Commission should not tie our state to an increasingly expensive, increasingly risky coal-fired power plant that will threaten our health and our pocketbooks. With so much at stake, the PRC should not base these critical decisions that will impact the health and safety of our communities for years to come on last-minute, draft proposals that are far from a done deal. It’s time for the PRC to act and reject PNM’s risky plan for the San Juan Generating Station.”


Support for continued burning of coal at the San Juan Generating Station has fallen as admissions by the company have revealed serious financial risks for the future of the plant, including the uncertainty of where the plant will get its coal after 2017. In March, the home city of the plant, Farmington, New Mexico, announced it would not acquire an increased stake in the plant due to reliability concerns and the huge costs that would be passed on to the community. 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 and liabilities. The Albuquerque City Council passed a resolution on April 6 formally opposing PNM’s plans and urging the New Mexico Industrial Energy Consumers, of which the City of Albuquerque is a member, to withdraw its support.

In addition, PNM announced that the total bill for their plan had jumped by over $1 billion, with those costs likely being passed on to ratepayers. This comes just weeks after PNM introduced a rate proposal that if approved would result in nearly a $10 monthly increase to the average residential bill due to utility’s plans to continue burning coal at the plant for the foreseeable future.

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 … appears to significantly exceed the dollars saved.”

Featured photo by Alfred Palmer

PNM’s last-ditch attempt to lock N.M. into aging coal plant