Legislation approved late Tuesday by the House on a 44-25 vote would essentially give the Four Corners region a head start when it comes to landing a new energy-producing facility.
However, a coalition of seven environmental groups urged lawmakers Tuesday to oppose the bill, saying it should be studied more closely.
“The bill will govern the development of hundreds of millions of dollars of energy resources in New Mexico, and the implications of the bill should be fully understood before passage,” the groups, including Conservation Voters New Mexico and the local Sierra Club chapter, wrote in a letter to lawmakers.
Energy-reliant San Juan County has had a population decrease in recent years, due in part to a slowdown in the natural gas industry.
And local officials are bracing for another economic blow as Public Service Company of New Mexico, the state’s largest utility, now hopes to close the San Juan Generating Station, near Farmington, in 2022 – years earlier than previously planned.
“I don’t believe there’s anyone here who doesn’t know how badly hit San Juan County is going to be,” House Minority Whip Rod Montoya, R-Farmington, said during a hearing earlier this week at the Roundhouse.
A bill debated earlier in this year’s 30-day legislative session would allow PNM to recoup its investment in abandoned coal plants by issuing low-interest bonds that would be paid off by customers over a 20-year period.
But that bill has languished in the Senate, due to concerns that it would hurt customers and undermine the Public Regulation Commission, which regulates utilities.
That prompted Montoya to file the new legislation, House Bill 325, that does not include the PNM bond provision. The utility company has not taken a position on the bill, a spokesman said Tuesday.
Instead, the new measure would require a utility closing a coal power plant to build a new energy-generating facility within the same school district as the old one, as long as doing so would not impose a 10 percent or higher cost on customers than building the facility in a different location.
The law appears tailored to PNM and the San Juan Generating Station, as it would be triggered only if a coal plant’s closure would cause local property tax revenue to drop by at least $2.5 million a year. San Juan County will lose at least $10 million per year once the San Juan plant is closed, Montoya said.
He also said the legislation would not make it more costly for utilities to close coal plants and would only lead to minor increases in customers’ power bills.
But the bill hasn’t won over all skeptics, as some lawmakers pointed out it does not include a renewable energy requirement, only that a new energy plant must have a “minimized” environmental impact.
The measure still must gain Senate approval before the 30-day session ends at noon Thursday in order to make it to Gov. Susana Martinez’s desk.
“The Legislature cannot save everybody, and that’s what we’ve been doing this year,” said Rep. Eliseo Alcon, D-Milan, at one point during Tuesday’s meeting of the House Judiciary Committee.