Will San Juan continue burning coal? 

By Mona Blaber, communications director

Since July, New Mexico’s Public Regulation Commission has been questioning whether it should apply an energy law that would ease retirement costs for PNM’s San Juan coal plant, and now the commission’s staff is questioning whether PNM should be allowed to stop using the plant’s coal power at all.

The city of Farmington and a corporation called Enchant Energy have proposed to keep the aging San Juan plant running as a carbon-capture facility, an expensive and risky scheme. Carbon capture at a power plant has been done at only two power plants in the world, and the owners of those two projects have said they will never do another carbon capture project because of the large costs.  This summer, the Institute for Energy Economics and Financial Analysis released a report saying Enchant Energy’s carbon-capture pitch offers false hope to Farmington — as well as major fiscal risk.

Now, staff at New Mexico’s regulatory authority is opposing PNM’s plan to get out of San Juan by saying that PNM should have evaluated carbon capture in more detail.

If the Commission agrees with staff and denies PNM’s abandonment application, PNM would be forced to continue to run San Juan —meaning ratepayers would lose out on the nearly $400 million in savings from abandoning San Juan and replacing it with low-cost renewables and batteries. And denying abandonment could mean that PNM is forced to spend billions of ratepayer dollars to fund a risky carbon-capture project at San Juan.

Denying PNM’s request to exit the plant would also delay cleanup of San Juan’s pollution, deprive plant and mine workers of the funding and transition support offered by the Energy Transition Act and stymie New Mexico’s transition from dirty coal to renewable energy.

The other major question the Public Regulation Commission is considering, whether it will apply the Energy Transition Act law to the San Juan case, brought many New Mexicans out to a public hearing Dec. 9 to give heartfelt testimony on providing an equitable transition and putting an end to the plant’s deadly emissions.

Many New Mexicans spoke of the benefits of the ETA — not just its renewable-energy mandates but the refinancing it authorizes that will reduce ratepayers’ current costs and create severance and reinvestment funding for San Juan plant and mine workers and Four Corners communities.

Nearly every person who testified spoke in support of closing and cleaning up the plant and ending its deadly emissions.

Some opponents of the Energy Transition Act spoke about the pollution created by the coal plant, but it’s important to note that the Energy Transition Act does not limit PNM’s responsibility to clean up pollution at the plant.

PNM’s cleanup responsibilities will be determined separately by the Environment Department and EPA. The PRC will then decide how much of those costs will be borne by PNM shareholders or by ratepayers. The ETA does not limit PNM’s liability for those costs in any way. It allows PNM to sell bonds for $30 million in additional decommissioning funds, but that is a limit on what customers, not PNM, are responsible for. PNM already has a larger fund for decommissioning expenses, and if that fund and the additional $30 million are not sufficient to remediate the plant, PNM will continue to be liable until the EPA and Environment Department are satisfied.

Sierra Club and other groups have forced PNM through litigation to reduce its emissions and to remove coal-ash and other pollution around the plant. We will continue to hold the utility accountable for its messes.

If the commission decides not to apply the ETA law, the danger is that plant and mine workers will lose the severance and job-training funds the law’s securitization enables. The commission doesn’t have a way to require funding for mine workers or for the community. Sierra Club will continue to advocate for implementation of the ETA to ensure an equitable transition to a safer climate for our kids.

Testimony in favor of the ETA

The ETA brought together labor unions, environmental activists, the Navajo Nation, community organizations, businesses, and utilities in support of this landmark legislation. Like the innovative and forward-thinking ancestors of this land … we modern people are called to the same extraordinary vision of being deeply connected with all of creation.
— The Rev. Vincent Chavez, St. Therese Catholic Parish, Albuquerque

The closure of San Juan is a small but critical step in the right direction. Delaying that for any reason is foolhardy.
— George Weston

It is way past time to act boldly and put things right. … By using securitization, the San Juan Generating Station can be closed, the site can be cleaned up, workers retrained for jobs in renewable energy, local school districts supported, and ratepayers’ electricity bills reduced. This is amazing. Everyone wins in this scenario.
— Ruth Striegle, Interfaith Power and Light

I have been talking and listening to communities throughout the Navajo Nation, and there are a lot of needs being raised, things like healthier communities, job security. We know that the ETA’s not perfect, but it’s a step forward. We can use the $40 million to help our Diné communities start the transition. … The community truly wants to make sure that we get it right and we do the right thing. We support the ETA to ensure a healthier community.
— Joseph Hernandez, Diné energy organizer, Native American Voters Alliance

I support the Energy Transition Act as it is written.It is revolutionary, practical and urgent. The ETA, I believe, is our best hope moving forward.
— Carla Lanting Shibuya

The thoroughness of the process created a bill that provides a path which is realistic, doable, and just.
— Deborah Krichels

ETA was debated with great pain and compassion by the Legislature and passed with great difficulty. We should not be debating San Juan emitting CO2 again. We must act.
— Marlene Perrit, Sister of Mercy

It’s right to help our neighbors. And as New Mexicans, we have to be there for each other more now than ever.
— Derrick Toledo

Featured image by Camilla Feibelman. Nicole Hersehender of Tó Nizhóní Áni testifies at a December 9 hearing about the lack of on-the-ground transition support when other coal plants have closed. 

Will San Juan continue burning coal?