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NM Advocates: PRC Delay of San Juan Coal Plant’s Replacement Decision is Unfortunate and Risky
The PRC’s delay in approving two low cost solar projects in McKinley and Rio Arriba counties puts those beneficial projects at unnecessary risk
Santa Fe, N.M. (April 29, 2020) – A large coalition of New Mexico community, faith, tribal, and environmental advocates today were disappointed by the New Mexico Public Regulation Commission’s (PRC) decision to delay approval of two very low cost solar and battery storage projects that would partially replace the electricity generated by the San Juan Generating Station.
These projects had record breaking low prices and would be located in rural New Mexico, creating hundreds of construction jobs in the area. Approval of these projects would have left plenty of room for additional projects to be built in San Juan County, which would support the Central Consolidated School District. With the bids for these projects due to expire tomorrow, April 30, the commission’s action unfortunately puts at risk these projects and their pricing.
While we recognize the commission’s desire to evaluate the entire resource portfolio before issuing any approvals, the hearing officers were right to recommend these projects first because of the exceptional opportunity they provided. These projects, and the recommended decision, were supported by nearly every participant in the replacement power case. Given the uncertainty in today’s economy, the more prudent course of action for the commission would have been to immediately approve the Arroyo Project, which includes 300 megawatts of solar and 40 megawatts of battery storage in McKinley County, and the Jicarilla Project, which includes 50 megawatts of solar and 20 megawatts of battery storage on the Jicarilla Apache Nation. These two projects have been among the lowest-cost clean energy projects in the country and would provide 700 construction jobs in economically struggling communities in northwest New Mexico.
Comments about rebidding the entirety of the San Juan resource replacements were particularly worrisome and dangerous, and were appropriately rejected by the other commissioners. A decision to rebid the replacement resources ignores that nearly 400 bids were already received and considered, including well over 100 bids for projects located near the current site of the San Juan Generating Station. The notion that a rebid, in the current economic climate, will result in better, lower cost projects is both misguided and naïve.
Further, with PNM’s exit from the San Juan Generating Station in mid-2022, restarting the bid process will make it nearly impossible to replace the electricity generated by San Juan in the time frame needed, jeopardizing service and rates. An optimistic timeline for a rebid would not allow new resources to come online until December 2023, 18 months after they would be needed to serve New Mexico ratepayers.
Despite today’s setback for these important projects, we hope that the developers of the Arroyo and Jicarilla projects will remain committed to these two solar and battery storage developments, and once the commission is presented with recommendations on a complete replacement portfolio, it will be able to quickly approve these two projects as recommended by their hearing examiners, along with very important replacement resources located in the Central Consolidated School District in San Juan County.
“The PRC decision is a missed opportunity to bring renewable energy projects to Northwest New Mexico and wouldn’t have precluded further investment of renewables in the Central Consolidated School District. It’s time to get serious about what PNM’s abandonment of SJGS means to the region.”
– Mike Eisenfeld, Energy & Climate Program Manager, San Juan Citizens Alliance
“Our state has depended on a legacy of fossil fuel and we have a chance to have our sun power us to a sustainable future. The decision of the PRC to not approve this low cost solar energy and battery storage for New Mexico, are steps moving us backwards in just transition to renewable energy in economic development and diversification.”
– Wendy Atcitty, NM energy organizer, Diné C.A.R.E.
“During these times of uncertainty there is no greater time than now to move forward on renewable energy projects. Education institutions like Navajo Technical University, which has an Associate of Applied Science degree in Energy Systems, teaches students the fundamentals of electricity, magnetism, photovoltaic electrical systems and wind generation. The Jicarilla and Arroyo projects have the potential to provide students with hands-on learning and research opportunities that reinforce their programs’ instructions. Today’s vote should not carry the message that we are not ready but that many communities are determined to be resilient. Projects like Jicarilla and Arroyo will plant the seeds to grow a strong workforce that will be represented by many of New Mexico’s Native American people.”
– Joseph Hernandez, Dine’ energy organizer, Native American Voters Alliance Education Project
“It is hard to fathom a PRC that within a week of the 50th anniversary of Earth Day would choose to reject some of the cheapest solar and battery projects in the country. It’s worse that in McKinley County, where the Escalante coal-fired power plant is closing, workers can’t count on the 500 construction jobs that the Arroyo project would create. Commissioners Espinoza, Byrd and Becenti Aguilar have failed the climate, workers and New Mexico today. We are deeply disappointed.”
– Camilla Feibelman, director of the Rio Grande Chapter of the Sierra Club
“We understand this is a tough decision for the Commission, and that they are giving careful consideration to doing right by the Consolidated School District. The Jicarilla and Arroyo PPAs are the cornerstone of nearly every cost-effective portfolio, they bring down the costs of replacement resources for ratepayers by reducing the overall cost of any portfolio that includes them. Located in McKinley and Rio Arriba Counties, they would provide hundreds of much-needed construction jobs to the affected communities. There were so many bids in the Consolidated School District that a rebid is unnecessary and could prove more costly. We hope the Commission will reconsider its decision, and approve the Arroyo and Jicarilla PPAs.”
– Stephanie Dzur, attorney, Coalition for Clean Affordable Energy
“The Commission’s decision today to defer the projects that would have propelled New Mexico’s clean energy economy forward is deeply disappointing. We’re frustrated that Commissioners Espinoza, Becenti-Aguilar, and Byrd didn’t join Commissioners Hall and Fischmann in seizing this moment to approve a significant renewables investment. The ETA sets New Mexico on a course for a future primarily powered by wind and solar energy, and the PRC needs to get us moving in that direction sooner rather than later.”
– Ben Shelton, political and legislative director, Conservation Voters New Mexico
“While we are disappointed by the commission’s decision, we hope they will swiftly approve the Arroyo and Jicarilla projects — in addition to other clean energy projects — upon seeing a complete portfolio of replacement resources. New Mexico families, businesses, and electricity providers need certainty right now, and we urge the PRC to quickly move forward with this case to ensure reliable, clean, low-cost power for New Mexicans.”
– Maria Nájera, government affairs director, Western Resource Advocates
“It’s extremely disappointing to see the PRC fall into the partisan squabbling that dominates our political landscape at every turn. The citizens of New Mexico, the workers and students who are waiting for the PRC to fulfill their duty to enact the ETA and their failure to do so today only hurts those stakeholders.”
– Lucas Herndon, deputy director, ProgressNow New Mexico
“The “T” in the ETA stands for transition. The law sets out a pathway for shifting electric generation in New Mexico from dirty fossil fuels – not just coal but natural gas as well — to clean energy. The PRC needs to recover from this missed opportunity and make sure going forward that all of the projects it approves to replace retiring coal are solar with storage plus more energy efficiency in the region.”
– Thomas Singer, senior policy advisor, Western Environmental Law Center
“The PRC majority missed an undefended layup. The hearing officers’ well-reasoned decision today would have allowed New Mexico energy customers to benefit from some of the cheapest solar power ever seen anywhere in the world. No one benefits from this indefensible fumble.”
– Noah Long, senior attorney, NRDC
About the Energy Transition Act:
Labor unions, environmental advocates, the Navajo Nation, community organizations, businesses, and utilities came together in 2019 to support passage of the ETA. The law paves the way for the retirement of the San Juan Generating Station and will ensure that 50 percent of investor-owned utilities’ electricity is renewable by 2030 and 100 percent is carbon-free by 2045. The law also provides $40 million in economic assistance for coal miners, San Juan plant workers, and the affected region, and encourages placing up to 450 megawatts of replacement power in San Juan County, an investment of hundreds of millions of dollars that could help restore lost property taxes after coal plant retirements. Under the law, future energy generation projects will be required to hire apprentices from diverse and disadvantaged backgrounds, supporting local workforce and economic development efforts. In 2023, the first full year after the San Juan Generating Station’s expected retirement, the ETA will save the average PNM customer about $80 or more on their annual utility bill.