SANTA FE, N.M. (AP) - New Mexico regulators on Wednesday gave Public Service Co. of New Mexico more time to ink agreements with a mining company, further delaying a decision that will affect the future of a coal-fired power plant that provides electricity to customers around the Southwest.
The Public Regulation Commission voted 4-1 in favor of an order that sets a new timeline for the utility to produce signed agreements. It’s possible for the utility to seek an extension until Aug. 1 but if it fails, it would have to file a new plan spelling out how it would fill the void left by closing a portion of the San Juan Generating Station.
The planned closure of two units at the plant is part of a settlement reached by state and federal officials and the utility to reduce haze-causing pollution in the Four Corners region.
While no one disputes shutting down two stacks at the plant, the utility, business groups and environmentalists have been feuding for more than a year over the best way to replace the power. Environmentalists are pushing for PNM to wean itself from coal, but the utility has argued that a mix of coal, nuclear, natural gas and solar power would be more economical for ratepayers and ensure reliability of the electric system.
It will be up to commissioners to decide whether to approve PNM’s plan, but a state hearing examiner has raised questions about the future makeup of ownership of the plant and a lack of a contract to supply coal to the plant beyond 2017.
PNM earlier this month submitted documents outlining a tentative agreement that would ensure a coal supply through 2022 and details about future ownership.
Commissioner Valerie Espinoza voted against the order to give the utility more time to finalize the agreements and suggested PNM was trying to submit new evidence in hopes of getting a different outcome.
“Really what we’re doing is delaying things and pushing things further and further,” she said. “I think it’s time to vote this thing down once and for all.”
Espinoza drew applause from the packed meeting room.
Commissioner Lynda Lovejoy, who represents the region where the plant is located, said many families have depended on jobs at the plant and adjacent mine for the last four decades. She said PNM needs to be sent a stern message that the utility will be to blame for destroying the region’s economy if it fails to come through.
PNM spokesman Pahl Shipley said the utility appreciates the commission’s willingness to take the coal and ownership negotiations into consideration. If finalized, he said the agreements would benefit ratepayers.
However, he declined to comment on whether PNM would meet the deadline.
“These negotiations are complicated. They involve a lot of money and a lot of logistics and it takes time to get it done,” he said.
Many investors have been steering away from coal-fired plants given increased pressure by the federal government when it comes to pollution controls and the threat of future regulations. This has positioned PNM and its ratepayers to absorb most of the liability at San Juan, said Steve Michel with Western Resource Advocates.
“I think this is just delaying the inevitable,” he said of Wednesday’s decision. “And it’s costing people a lot of money.”
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