Statement on San Juan Generating Station recommended decisions

Late Friday February 21, Public Regulation Commission hearing examiners issued recommended decisions supporting allowing PNM to exit its ownership and operation of San Juan Generating Station coal-fired power plant and allowing bond sales to recover the remaining debt in the plant, along with recovery funds for workers and the surrounding Four Corners community.

The Recommended Decisions now head to the NMPRC commissioners for a final decision.  Parties disagreeing with the hearing examiners’ recommendations will have an opportunity to with in before that final decision.  Recommendations are expected 4-6 weeks in the separate case on what mix of resources should replace the coal power.

In response to today’s recommendations, several intervening parties issued statements:

“This recommendation supports an end to the coal pollution that has been harming our people and lands for decades. Additionally, the hearing examiners supported advance distribution of a portion of recovery funds, which will help provide real economic relief, support, and opportunity to the impacted communities and workers of SJGS. It is encouraging that 100% of the pre-funding requested for Indian Affairs and Economic Development were affirmed.”
— Wendy Atcitty, Energy Organizer of Diné C.A.R.E.

“The recommended decision to allow PNM to abandon SJGS sets the Four Corners region on a path to equitable energy transition with funding, renewable energy replacement, job creation and diversification of our economy. It will be vital to site replacement renewable power in the Central Consolidated School District, utilizing stranded assets such as transmission lines and mined lands.”
— Mike Eisenfeld, San Juan Citizens Alliance

“Hearing examiners confirmed that retiring San Juan coal plant is in the public interest, that it benefits ratepayers and reliability. The examiners also noted the risks and likely high costs of keeping the plant operating as a carbon-capture facility.  Sierra Club will continue to advocate for an equitable transition for the Four Corners community and for our recommended scenarios of 100% renewable replacement energy and storage.”
— Camilla Feibelman, Sierra Club Rio Grande Chapter

Highlights from the recommended decisions:

The recommendation included confirmation that the low-rate bonds authorized by the Energy Transition Act will provide savings to PNM customers:

“The cost savings from abandoning San Juan Units 1 and 4 are large enough to offset the added costs of the (Energy Transition Charges) and PNM’s proposed portfolio of replacement resources.  Thus, the immediate impact of the securitization and abandonment should be a net savings in customers’ monthly bills. PNM estimates the savings for an average residential customer using 600 kWh per month and paying the $1.90 per month ETC should approximate $6.87 per month on their current monthly bill of $73.25.  Even the residential customer using 1,000 kWh per month and paying the higher $4.97 per month ETC should see a savings of $9.65 per month on their current monthly bill of $129.03 per month.”

The only party that recommended against allowing PNM to exit San Juan was PRC staff, claiming that PNM hadn’t sufficiently considered retrofitting San Juan for carbon capture, a technology that is running at only one, much smaller, power plant in the U.S. But hearing examiners pointed out that the technology for carbon capture is speculative and costs are high: “The modeling conducted by PNM also shows that the abandonment will cost substantially less than PNM’s continued operation of the plant retrofitted with carbon capture technology, and no party has presented contrary evidence.”

Statement on San Juan Generating Station recommended decisions