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Regulators kick San Juan shutdown into gear

ALBUQUERQUE, N.M. — The countdown to closure of the coal-fired San Juan Generating Station near Farmington has begun, now that four of the plant’s five utility owners have officially confirmed plans to exit the facility in 2022.

With the clock ticking, the New Mexico Public Regulation Commission on Thursday ordered regulatory proceedings on the shutdown to begin immediately, rather than wait for Public Service Co. of New Mexico, which operates the plant, to file for approval to abandon San Juan in the spring.

The commission voted 5-0 to start gathering input this month from all intervening parties and the public.

“Why kick the can down the road for six more months until PNM files for official approval to abandon the plant?” PRC Vice Chair Valerie Espinoza said. “We want to get the wheels rolling now.”

The commission was responding to PNM’s Dec. 31 “compliance” filing regarding the future of San Juan, something PNM was required to submit to the PRC following the 2017 closure of two of the plant’s four generating units to comply with federal pollution controls. The other two units were to continue operating until at least mid-2022, when the current coal supply contract ends, as well as the operating partnership among the five plant owners.

The co-owners had agreed to define their post-2022 plans by mid-2018 for PNM to then report back to the PRC on the plant’s future by December. In its compliance filing, PNM said four of the five owners want to abandon San Juan. Only the City of Farmington, which owns an 8 percent share in one of the two operating units, said it wants to continue after 2022.

But Farmington has made no effort to acquire ownership from the other utilities, and no other buyer has appeared, forcing the plant partners to begin planning for San Juan’s “orderly shutdown” in 2022, PNM Vice President of Generation Thomas Fallgren said in the utility’s December filing.

PNM had already expressed its intent in 2017 to abandon San Juan and replace electricity from the plant with cleaner, cheaper resources, including solar, wind, natural gas and nuclear generation. It released a request for proposals for replacement power in fall 2017, with nearly 40 bidders submitting 345 potential projects that the utility is reviewing.

PNM planned to seek official PRC approval to abandon San Juan and acquire replacement resources in a single filing by mid-2019. But on Thursday, the PRC expedited the process, immediately opening its own docket to begin proceedings.

The Santa Fe environmental group New Energy Economy praised the PRC action.

“A lot of issues must be vetted, including decommissioning, reclamation, cleanup, replacement power and financial costs,” said NEE Executive Director Mariel Nanasi. “We have to roll up our sleeves and get to work.”

Replacement resources will attract special attention, saidChuck Noble, attorney Coalition for Clean Affordable Energy attorney Chuck Noble.

“The big issue for us is how much of that coal generation can be replaced with renewables,” Noble said.