ALBUQUERQUE, N.M. (AP) — The largest electric provider in New Mexico on Friday outlined the savings that customers will see from the closure of a coal-fired power plant as part of a filing mandated by state utility regulators.
The document was required to be submitted by July 1 as part of a financing order related to the San Juan Generating Station. The plant was set to shut down at the end of June, but regulators are allowing Public Service Co. of New Mexico to keep open one unit through September to meet peak summer demands.
The utility is appealing the final order, warning that applying the short-term credit now would result in higher rates later.
Consumer advocacy groups praised the Public Regulation Commission's decision to force the utility to apply the credit as the plant shuts down rather than wait for the next rate case.
They say the first rate credit would provide a reduction of about $1.76 for residential customers on their monthly bills. The second credit of about $6.43 would come in October when the plant is no longer producing electricity for PNM customers.
Under the commission’s ruling, utility customers would see a total rate reduction of about 10%.
Mariel Nanasi, the executive director of New Energy Economy and a consistent critic of PNM, said the credit allows customers to enjoy the rewards of moving from fossil fuels to solar and battery storage operations.
While New Mexico law requires investor-owned utilities to be carbon-free by 2045, Nanasi and others have pushed for a faster transition, arguing that customers would benefit from cheaper renewable generation.
However, supply chain issues have delayed the installation of the solar and battery storage systems that the utility had hoped to have online in time for the retirement of the San Juan plant.
PNM executives have described it as a significant challenge, saying nearly half of the solar generation and battery storage that was scheduled to be online by early next year likely won’t be available until after summer 2023.
The other problem is that additional solar generation expected to replace electricity that will be lost when leases expire for the Palo Verde nuclear plant in Arizona likely will be delayed until 2024.
PNM has warned regulators and customers of the potential for rolling blackouts this summer and in 2023.
Industry groups have complained that the solar sector is being slowed by supply chain problems due to a U.S. Commerce Department inquiry into possible trade violations involving Chinese products.
The Biden administration tried to address the problem earlier this month by declaring a two-year tariff exemption on solar panels from Southeast Asia. Some domestic producers have said the actions would help China’s state-subsidized solar companies at the expense of U.S. manufacturers.