ALBUQUERQUE, New Mexico: The state’s largest electric utility is underestimating the costs that will be passed on to customers under a proposal to shut down part of an aging coal-fired power plant in northwestern New Mexico, according to a regulatory filing made by advocates of renewable energy.
The Santa Fe-based group New Energy Economy is accusing PNM of withholding from the Public Regulation Commission key information about the plan’s price tag.
The group contends PNM didn’t include more than a half-billion dollars of ongoing capital expenditures in the calculations and failed to weigh the costs of environmental regulations and the disposal of coal ash waste generated by the power plant.
“It’s about shifting these risks, whether it’s the environmental risks or decommissioning costs, from the shareholders to the ratepayers,” said Mariel Nanasi, executive director of New Energy Economy. “That’s really what this is all about. That’s why this is not just a climate issue. It’s an economic issue.”
New Energy Economy argues PNM’s plan to replace power lost by the shutdown relies too heavily on coal and natural gas, and not enough on alternative energies.
PNM says it stands behind the science it used to craft its plan, which is at the center of what many consider as a watershed public-utility case that will set the stage for energy policy in New Mexico for decades to come.
PNM is seeking approval for a plan to retire two units at the San Juan Generating Station near Farmington and replace the power with a mix of coal from one of the plant’s other units, electricity generated by the Palo Verde nuclear plant in Arizona, a new natural gas-fired plant and solar.
PNM’s regulatory filings estimate the cost over 20 years at more than $6.8bn. The utility says its plan — based on thousands of computer modelling runs and hundreds of risk assessments — represents the most cost-effective alternative for dealing with federal environmental mandates that call for reducing haze-causing pollution at San Juan.
Utility spokeswoman Susan Sponar said the plan also puts New Mexico on the path for compliance with proposed greenhouse gas emissions regulations because there would be an overall reduction in the use of coal with the closure of the two units.
New Energy Economy, the New Mexico Attorney General’s Office and others have asked state regulators to appoint an independent monitor to review PNM’s proposal to ensure the utility is choosing the most cost-effective new power sources to replace the capacity that will be lost when two units are closed at San Juan in 2017.
AP
