New Mexico utility regulators weigh costs of coal phase-out

SANTA FE, N.M. (AP) — Miners, environmentalists and utility customers weighed in Monday about the future of a major coal-fired power plant in New Mexico and a disputed financial plan to shutter the facility to make way for cleaner sources of electricity.

Hearings this week at the Public Regulation Commission have thrown into limbo much of a plan recently approved by state lawmakers to decommission the San Juan Generating Station near Farmington and move New Mexico toward cleaner sources of power.

The plan includes $40 million in aid to the workforce attached to the plant and local economy.

Daniel Harvey, a second-generation worker at the plant's companion coal mine, outlined the stakes in the deliberations.

“I'm grateful for what may be available to aid those workers in that transition, but what will we be transitioning to?" Harvey said. “Will my family need to move, will my children continue to attend the local elementary school? For some of us, they will not.”

The five-member commission is considering how to fairly divvy up roughly $360 million in coal-plant shutdown costs between utility investors at Public Service Company of New Mexico and its customers.

A decision has the potential to upstage portions of the so-called Energy Transition Act signed by Democratic Gov. Michelle Lujan Grisham that puts New Mexico on a mandated path toward zero-carbon electricity by 2045.

Leading Democratic lawmakers have accused the utility commission of overstepping its authority regarding the cost of the shutdown and decommissioning.

The state Supreme Court has twice declined requests that it intervene in the disagreement over constitutional authority. On Monday, the court received a new petition from Lujan Grisham, Navajo Nation President Jonathan Nez and legislative sponsors who accuse utility regulators of perpetuating “a regulatory atmosphere of uncertainty and risk.”

Upstart business Enchant Energy is proposing to transform the San Juan Generating Station into a carbon capture facility that disposes of carbon dioxide emissions underground. Miners including Harvey at Monday's hearing held out some hope for that proposal even as utility regulators weighed how to fairly pay to decommission the plant.

As part of the energy transition law, owners of San Juan can recover investments in the coal-fired plant by selling bonds that are later paid off by utility customers.

Advocates for utility customers say that repayment plan is skewed to the advantage of utility stockholders and are urging utility regulators to intervene. Advocates of the pact — including a long list of environmental groups — say owners of the plant are forgoing future profits.

PNM spokesman Ray Sandoval likened legislation for retiring the plant to a rapid mortgage payoff in which utility investors forsake profits they otherwise might have made on the property.

“Now that we understand that coal is no longer economically viable," he said, "we think that we did something responsible by offering up a refinance.”

Starting Tuesday, more than 30 witnesses and experts will be called to testify at hearings in the case. A recommendation by hearing examiners to the full commission is expected in the spring.

With Monday set aside for public comment in a packed auditorium, dozens of people spoke on how to proceed.

“My heart goes out to the coal workers but I think that the Energy Transition Act is a good compromise all around,” said Stefi Weisburd of Tijeras. “As a ratepayer, I am happy to share in some of the costs if it gets rid of coal.”