PRC puts coal-to-clean path in doubt

By Camilla Feibelman, Rio Grande Chapter Director

Unexpected obstacles could derail implementation of New Mexico’s landmark clean-energy law, relief funds for coal workers and even the amount of renewable replacement in the retirement of coal-fired San Juan Generating Station.

Since Gov. Michelle Lujan Grisham signed the Energy Transition Act in March and it became law in June, a lot has happened.

The ETA set a requirement for 100% carbon-free electricity by 2050 with 50% renewables by 2030 and 80% renewables by 2040. The law also establishes a pathway, through low-rate debt financing called securitization, to lower rates and create an energy transition in the Four Corners by providing $40 million in relief to the coal workers and surrounding communities.

But in a blow to a speedy and equitable transition to renewable energy, some commissioners on New Mexico Public Regulation Commission are questioning whether they need to apply the law to PNM’s case.

PNM filed its case to abandon the coal plant in July, along with four suggested scenarios for replacement power, two of which are all or almost all renewable energy and the other two have different amounts of new gas. All parties are now required to file two sets of testimony, one as if the law applied and one as if it didn’t on both the case to shut down the San Juan coal plant and the replacement energy place. The process has been bogged down to the point that some federal tax credits for suggested renewable replacement power may expire or decline in value, making renewable options more expensive and less likely to be adopted, especially if the commission doesn’t apply the ETA’s strong renewables requirements.

Plant and mine workers, tribes and impacted communities lose access to the $40 million for job training, severance pay, economic development and assistance if the commission doesn’t apply the Energy Transition Act.

New Energy Economy, which opposes securitization, sought a writ at the state Supreme Court to declare the ETA unconstitutional, saying the PRC should decide how the plant shutdown will be paid for, among other arguments. On Oct. 1, the Supreme Court denied NEE’s petition. Unfortunately, on Oct. 3, the state Supreme Court also denied a request by the ETA coalition of groups asking the court to clarify that the PRC should apply the ETA to the abandonment proceedings.

The mine will start laying off workers earlier than the plant because of accumulated coal. Workers and their families need assurance that there will be a safety net for them when the coal jobs are no longer available. Tax credits for renewable and batteries are higher for projects that begin before the end of 2019 than for projects that begin in later years. The indecision and wasted time put renewable projects at risk by threatening the credit rating of PNM and solar projects.

Now, Public Regulation Commission staff is actually recommending that the plant remain open, and that “clean coal,” or carbon capture (which would then be used to aid oil extraction), a scheme that has failed over and over in the U.S., be used on San Juan.

The Sierra Club has intervened in the commission case, and our attorneys are working to make sure the PRC carries out its responsibility to implement laws passed by the Legislature, that San Juan coal plant stops polluting and that workers and the community aren’t left behind.

We also continue to carefully track PNM’s proposals for replacement. The utility has put forth four portfolios and recommended one (a “compromise” that sites a 280-megawatt gas plant in San Juan County, along with 490 MW of solar and wind and 130 MW of battery storage), and we are conducting our own modeling. The Sierra Club will push hard for as much of the replacement power to be provided by renewables and storage as possible.

We’ll continue to keep you posted on the news and opportunities to participate.

PRC puts coal-to-clean path in doubt