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PRC official recommends acceptance of PNM plan

A hearing examiner for the state Public Regulation Commission has recommended that the agency accept an integrated ...more
A hearing examiner for the state Public Regulation Commission has recommended that the agency accept an integrated resource plan from the Public Service Company of New Mexico that calls for shutting down the San Juan Generating Station.
Daily Times file photo

Story highlights

  • San Juan County, Farmington and local legislators asked the PRC to reject the integrated resource plan.
  • Commissioner Sandy Jones says the PRC needs to take a leadership role in considering economic impacts.
  • The hearing examiner said impacts should be considered in a future case.
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Utility's plan calls for closure of San Juan Generation Station

FARMINGTON — A hearing examiner for the New Mexico Public Regulation Commission has recommended that the agency accept the Public Service Company of New Mexico’s integrated resource plan.

The plan has generated controversy partially because it calls for closing down the San Juan Generating Station in 2022.

There were 15 entities that intervened in the case, including San Juan County, the local state legislative delegation and the city of Farmington.

San Juan County entities ask PRC to reject plan

The PRC likely will take action on the plan during its meeting on Dec. 19 in Santa Fe. The local entities have asked the PRC to reject the plan or delay making a decision on it until after PNM files to close, or abandon, the San Juan Generating Station.

The San Juan County entities have argued that the statewide and regional economic impacts of closing the generating station must be considered in the integrated resource plan process.

"PNM’s request to abandon (the San Juan Generating Station) is a matter of statewide importance with huge financial impacts and complex factors that could create unintended consequences for years to come that are detrimental to the state, to the San Juan region and to PNM’s ratepayers: since the overarching goal of the applicable statues is balancing public interest, if ever there was a time not to employ 'check the box' regulation this is it," the entities wrote in a response filed with the PRC.

PNM officials voiced support for the hearing examiner's decision and stated in a response to the San Juan County entities that the law does not require evaluation of economic impacts while drafting an integrated resource plan.

Hearing examiner says economic impacts are not in the case's scope

“This case is replete with opinions on what PNM could have done or should have done or what somebody else might have done,” hearing examiner Elizabeth Hurst told the PRC during its weekly meeting Wednesday. The meeting can be viewed online at nmprc.state.nm.us.

While Hurst recommended accepting the plan, she said there were concerns brought up that will need to be addressed in future cases. The concerns she cited included the economic impacts that closing the generating station will have on San Juan County.

Hurst said those impacts were not within the scope of an integrated resource plan case and should be argued in an abandonment case or a certificate of convenience and necessity case.

She described the integrated resource plan as a road map that shows the direction that PNM wants to take.

“But it’s only a snapshot of the road map at a particular time,” she said. “Because, as well all know, the planning can and will change.”

“Applying incorrect standards in this case might somehow potentially cause problems if and when the commission does actually have an abandonment case in front of them,” Hurst said.

If PNM chooses to close the San Juan Generating Station, it will be required to file an abandonment application with the PRC. The utility has stated it will file for abandonment next year.

“I do not believe that acceptance (of the integrated resource plan) should be interpreted by anyone as commission approval for any action that is contained in this plan,” Hurst said.

Commissioners discuss economic impacts to San Juan County

Commissioner Lynda Lovejoy, who represents northwest New Mexico, asked if the economic concerns could be adequately addressed in future cases.

Hurst said she believes the processes are set up so that the concerns about the economic impact can be properly considered in the future abandonment proceedings.

Commissioner Sandy Jones further pushed Hurst for information on the abandonment proceedings and potential economic impacts to San Juan County.

Neither Jones nor Lovejoy will be serving on the PRC when PNM has indicated it will file the abandonment case. Both commissioners lost their re-election bids. Theresa Becenti-Aguilar will represent northwest New Mexico next year, and Steve Fischmann will replace Jones on the commission.

Jones said there is some question about whether the PRC has the authority to consider the economic impacts. He said the PRC will have to decide whether PNM customers in southern New Mexico should offset the planned move's economic impacts to San Juan County.

San Juan County is not served by PNM. Instead, most of the county receives electricity from the Farmington Electric Utility System, which is a partial owner of San Juan Generating Station unit four. The portion that is not served by Farmington receives power from the city of Aztec. Aztec had a contract to purchase power from PNM until 2016, when the contract expired. Instead of renewing the contract with PNM, Aztec contracted with Guzman Energy to purchase electricity. 

Jones said there needs to be a solution that minimizes the economic impacts on San Juan County, but he said he does not know what the PRC can consider within its statutory limits.

Jones said New Mexico has an obligation to take care of people.

“We sure take care of a utility,” he said. “That’s in statute. But I’m not sure the people who have their life savings in a place are at the table.”

Jones said the PRC needs to take a leadership role in considering economic impacts rather than a wait-and-see approach.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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