By now, you may have heard about a bill moving through the New Mexico legislature that addresses the closure of the coal-fired San Juan Generating Station (SJGS) and is garnering a lot of much-deserved attention. Senate Bill 47, called the Energy Redevelopment Bond Act, was proposed by PNM, New Mexico’s largest electric utility.
The bill (and its companion House Bill 80) deals with a financial tool called “securitization” that makes it easier for utilities to close aging coal plants early by allowing them to recover a percentage of what they expected to make during the life of the plant. Providing this incentive is important because it guarantees that the utility will commit to closing the plant, rather than seeking buyers to keep the plant up and running. The Trump administration is hell bent on keeping coal plants going, and we don’t want them to consider SJGS an opportunity to do that.
Overall, it is cheaper for ratepayers to securitize a portion of PNM’s lost revenue from the old, expensive coal plant and build clean, cheap renewable energy to replace it than it is for PNM to continue to operate the nation’s most polluting coal plant. And when you factor in the environmental and public health costs, it benefits the state even more.
Our legislative team first saw a draft of SB 47 in December of 2017. Closing the nation’s most polluting coal plant is not only good for public health and our climate, it creates a huge opportunity to transition to clean energy in our state, generating the clean energy jobs and sustainable economic growth we need. But PNM’s bill misses this opportunity and instead only looks to protect their financial bottom line. PNM’s decision to shut down the San Juan Generating Station by 2022 – three decades earlier than originally planned – is driven by the fact that the coal plant can no longer turn a profit for them.
However, what’s been lost in PNM’s bottom-line decision is the bottom line of families living in the Four Corners region, many of whom are Navajo. When SJGS closes, it should be replaced with local clean energy production. We want a good deal for the people of the Four Corners, who have worked for generations to provide energy for New Mexicans. We can’t leave them behind.
The first version of the bill did not guarantee closure of San Juan Generating Station, did not provide any meaningful support for San Juan County when the plant does close, did not provide an assurance that replacement energy would come from renewable energy sources and did not protect ratepayers.
In response to the first version of the bill, Speaker Brian Egolf asked us to come to the negotiating table with PNM and see if there was a version of the bill that allowed us to seize the opportunity to close the San Juan plant.
Our legislators must not pass a bill that only protects PNM shareholders. In order for the conservation community and statewide allies to consider supporting a securitization proposal, it must include:
- A community-driven transition plan for the Four Corners area that will both diversify the local economy and ensure that the area isn’t left behind in the transition to a clean energy economy. The community needs the space and opportunity to determine their own solutions.
- An open and transparent plan for transition to the post-coal clean energy future of New Mexico, featuring solutions that support a robust and independent renewable energy sector.
- The assurance that New Mexico ratepayers directly benefit from the savings of transitioning to a renewable energy economy, while guaranteeing that the Public Regulation Commission’s ability to hold PNM accountable remains intact.
Due to exceptional opposition from all sides, PNM has had to make concessions. We have participated in negotiations that have failed to lead to consensus so far. The bill is headed to its first committee hearing at 9 a.m. Saturday in the Senate Conservation Committee. Stay tuned as we learn what is in PNM’s most recent proposal and we’ll ask you to raise your voice before Saturday’s hearing.
We recognize the gravity of the decision to close the San Juan coal plant and its widespread impacts to the health, economy and future of the Four Corners area and our entire state. That’s why we worked to get the best deal for Four Corners’ families and New Mexico. We’ve been in the State Capitol full time since day one of this session and every session for the past 12 years. We’re representing your values in these negotiations and we hope you’ll continue to support us in this work for the next 15 days and beyond!
