Update on San Juan Generating Station and New Mexico Public Regulation Commission Hearing

Update on San Juan Generating Station and New Mexico Public Regulation Commission Hearing

Post on City of Farmington Website, February 1, 2019.

Public Service Company of New Mexico (PNM) has proposed to close San Juan Generating Station (SJGS), and effectively San Juan Mine in 2022. Your local leaders have proactively been advocating to preserve the jobs and extend the life of the plant and mine. This includes vigorous intervention in the Public Regulation Commission (PRC) regulatory process, Legislature, and through Farmington’s efforts to market the plant to a new private owner. These measures to market the plant are ongoing, aggressive, and while uncertain, have a reasonable chance of success.

While we did not avoid the commencement of the abandonment case by the PRC, there was a beneficial outcome. The PRC validated many of our concerns regarding closure of SJGS and is providing all stakeholders with the ability to participate in a process that we hope will ultimately implement a balanced solution that mitigates impact to ratepayers and the region while also adapting to changing energy market conditions. The PRC order confirms our impact from the Integrated Resource Plan (IRP) case, essentially importing our central arguments on the need for community hearings, due process, economic impact modeling, stranded costs, and reliability. PNM has stated publicly that closure of the SJGS will increase customer rates. Closure of the plant and mine will also have a devastating economic impact on the state and region.

SJGS was recently retrofitted with millions of dollars of pollution control equipment— and along with the closure of 2 of 4 units, brought the plant into compliance with the stringent emissions standards proposed by President Obama in 2014. In fact, SJGS has lowered its overall emissions by over 60% and is one of the cleanest and most technologically sound coal plants in the Country and has several decades of functional life remaining.

The issue for the region doesn’t center simply on protecting coal, it centers on finding a balanced solution that mitigates the impacts a potential closure of the plant and mine will have on our families, our children, our schools, and our economy. The region embraces a responsible transition and would welcome large scale renewable power to be constructed locally and exported utilizing existing transmission infrastructure. The City of Farmington and the broader San Juan County are open for business and are committed to growing our economy and contributing to the quality of life of our citizens.

Representing you at the PRC hearings were Mayor Nate Duckett, City Councilors Jeanine Bingham-Kelly and Janis Jakino, and City Manager Rob Mayes. With them were Commissioner GloJean Todacheene and Doug Echols from San Juan County, Germaine Chappelle, as outside counsel, and Greg Allen of San Juan Safe Communities Initiative. A special thank you to State Representative Rod Montoya and Senator Bill Sharer, who also attended.

The Impact of PNM’s Plans on Tipping Point New Mexico

The Impact of PNM’s Plans on Tipping Point New Mexico

Listen to Germaine Chappelle’s discussion on the Rio Grande Foundation’s Tipping Point New Mexico Podcast. Germaine addresses a variety of issues with hosts Paul Gessing and Dowd Musca. Hear about the issues related PNM’s plan for San Juan Generating Station including “stranded costs”, the cost of adding “renewables”, how electric rates will be impacted, and how the plan will hurt the Four Corners region.

Tom Steyer’s Energy Orders – The Californian seeks to raise costs for the hoi polloi in other states

Tom Steyer’s Energy Orders – The Californian seeks to raise costs for the hoi polloi in other states

Wall Street Journal
By The Editorial Board
Updated Oct. 19, 2018 7:32 p.m. ET

Progressive money man Tom Steyer has many causes—impeaching Donald Trump, electing Senate Democrats, and this year ballot initiatives to impose renewable-energy mandates on voters who don’t realize how their electricity bills will rise.

Mr. Steyer’s NextGen Climate Action first targeted Michigan, where utilities agreed to higher renewable quotas if Mr. Steyer dropped his initiative. Next was Nevada, where referenda need to pass twice to become law. Nevada utilities are rolling over this year to save for a ballot brawl in 2020.

This year’s ground zero is Arizona, where Mr. Steyer’s Proposition 127 would require utilities to produce 50% of electricity from renewable sources by 2030. This would more than triple Arizona’s current mandate of 15% by 2025. The Steyer mandate would also bar utilities from counting obvious forms of renewable energy, such as nuclear (now 29% of the state energy mix) and most hydropower (6%).

The latter provision shows that Prop 127 is really one more subsidy for solar and wind power. Sunny Arizona is third in the country for solar power, according to the Solar Energy Industries Association, while it’s in the middle ranks for wind power. The strange hostility to nuclear would probably require the closure of the Palo Verde nuclear plant—the nation’s largest clean energy facility. Nuclear would have to be replaced with natural gas plants necessary to backstop intermittent wind and solar.

Hardest hit would be Arizona pocketbooks. Since the state adopted its current mandate in 2006, Arizona utilities have expanded renewable electricity to 7% from 1% of their electricity mix. But according to Energy Information Administration data, this has raised Arizona electricity prices by 30%—compared with 19% for the nation over the same time period. The Heartland Institute says that “at that pace, ramping up the mandate to 50 percent would cost the average household an additional $2,179 per year compared to present electricity costs.”

Read Entire Story Here

Prop. 127, Arizona’s renewable energy initiative, comes down to just 4 words

Prop. 127, Arizona’s renewable energy initiative, comes down to just 4 words

Editorial board, Arizona Republic Published 6:08 a.m. MT Oct. 25, 2018

Opinion: The debate surrounding Arizona’s Prop. 127 has been needlessly complicated. The clean energy mandate comes down to just four words: Right idea, wrong tool.

One day Arizona will be powered by the sun.

We enjoy such abundant natural light that we seem destined to throw a harness around the sun and use it to pull the greater share of our state economy.

But that day is not here. Not yet.

For now we are moving in the direction of the sun with new knowledge and new technology.

Crusaders for clean power have put on this year’s ballot a proposal to massively accelerate Arizona’s ascension to virtually 100-percent clean energy. But there are reasons to doubt it.

What would Proposition 127 do?
Utilities are now under Arizona Corporation Commission mandate to produce 15 percent of their electricity from renewable sources by 2025.

Proposition 127 would bump up those requirements to 50 percent by 2030, an increase the utilities say would greatly increase costs that would then be passed on to ratepayers.

Opponents, led by APS, contends the proposal’s economics would force the closure of Palo Verde Nuclear Generating Station, which produces power for about 4 million people.

Read Entire Story Here

PNM plant closure will raise rates

PNM plant closure will raise rates

This appeared as a guest column in the Albuquerque Journal | By Nate Duckett / Mayor, City of Farmington, and Kim Carpenter / County Executive Officer, San Juan County, Saturday, October 6th, 2018

We are responding to PNM executive Ron Darnell’s “for the children”-themed op-ed (Sept. 14 Journal). We believe PNM is using this angle to misguide the public on a number of issues surrounding its decision to close the San Juan Generating Station 30 years early.

As fathers and community leaders we care deeply for our youth and are gravely concerned about the impact PNM’s closure of the San Juan Generating Station will have on the well-being, education and future opportunities of our state’s children. Our state already struggles with one of the highest rates of childhood poverty in the country. We take it personally that PNM is willing to so cavalierly turn a blind eye to the real impact its plans will have on our children.

PNM has already publicly stated its plan to close the San Juan Generating Station will increase electric rates. Skyrocketing electric rates in California have already been created by actions like those proposed by PNM. Increased electric rates disproportionately impact those on fixed or low incomes.

PNM’s plans, as advanced by Darnell, will cost all of us, especially our children, in the state of New Mexico plenty in the form of fewer jobs, higher electric rates, reduced tax revenues for schools and diminished ability of parents to support their families. Furthermore, this closure will no doubt lead to further migration of our working class to states that have more robust job opportunities and diversified economies.

PNM has admitted publicly there will be statewide and regional impacts caused by its decision to close the San Juan Generating Station. PNM has also admitted in a proceeding before the Public Regulation Commission that delaying the closure will decrease costs to customers and mitigate impacts. If PNM cares so much about our state’s children, please ask yourself why it isn’t interested in working to create a more workable and prudent transition plan that mitigates these impacts?

In 2015, PNM initiated its plan to close two units of the San Juan Generating Station. PNM asserted that in order to keep the remaining two units open decades longer, extremely expensive pollution control equipment was needed. In reliance on PNM’s stated commitment to continue operations, over $37 million in bonds benefitting schools in our area were issued.

In 2017, after installing this equipment and using assumptions that have been aggressively challenged and largely discredited, the company stated its intention to close the remaining two units of San Juan Generating Station.

Why the sudden change in strategy by PNM? We believe this decision is profit-driven:

• Even though PNM has volunteered to close the plant prematurely, it wants customers to pay PNM shareholders for shutting down a completely viable resource.

• PNM also wants customers to pay for brand-new replacement generation resources, which guarantees dramatic increased profit to PNM and its shareholders.

• PNM wants the state Legislature to expand the amount of renewable energy it uses to 50 percent. This creates a legislative mandate to overbuild resources, which further increases profit to PNM and its shareholders at the expense of ratepayers.

PNM is advocating that the California approach be adopted by New Mexico public officials. Under California’s approach, electric rates have skyrocketed and utility profits have soared. If New Mexico goes along with PNM’s plan, rates in New Mexico will also skyrocket.

Higher electric bills hurt poor families the most. However, higher electric rates do support increased executive bonuses and dividends to mostly wealthy, out-of-state shareholders.

Does New Mexico really want to go along with PNM’s plan to increase electric rates? We need economic growth and to diversify our economy.

With PNM’s plan, higher electric rates will give businesses fleeing California’s disastrous business climate another reason to keep driving straight through New Mexico on Interstate 40 to Texas. Meanwhile, huge numbers of New Mexicans will be forced to pay unnecessarily higher electric bills, impacting government, business, families and yes, our children.

Commentary: Coal plant retirements could devastate power grid resiliency

Commentary: Coal plant retirements could devastate power grid resiliency

Farmington Daily Time, Matthew Kandrach, Consumer Action for a Strong Economy Published 4:43 a.m. MT July 25, 2018

There is growing alarm over the loss of America’s baseload sources of electricity. Coal and nuclear power plants are being pushed off the grid by a three-headed monster of heavily-subsidized renewable energy, the legacy effects of overzealous regulation, and a glut of natural gas.

Since 2010, more than 600 coal-fired generating units in 43 states have retired or announced plans to retire. Nearly 70 Gigawatts of coal capacity (enough to power 50 million homes) has already been retired, and half of the nation’s commercial nuclear fleet is facing financial pressure.

While wholesale electricity costs have actually fallen in some regions of the country over the past few years, it appears we’re reaching a tipping point where a further loss of coal and nuclear capacity could impose a huge financial burden on consumers.

A new case study by Energy Ventures Analysis (EVA) examined the potential cost of early retirement for three coal plants operating in the nation’s largest electricity market.

The study found that the cost of retiring these three plants would be 15 times higher than providing support to keep them operating. The costs from premature retirement would exceed $2 billion per year.

Read Entire Article Here

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