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Another battle over closing San Juan

ALBUQUERQUE, N.M. — A new battle is brewing at the Public Regulation Commission on plans to close the San Juan Generating Station near Farmington.

The PRC will discuss whether to immediately open formal proceedings on the issue during Wednesday’s public meeting or wait for Public Service Co. of New Mexico to file for the plant’s abandonment in the spring.

Immediate proceedings could potentially derail a PNM-backed legislative initiative to help finance plant closure and mitigate the economic impact on local communities because the Legislature can’t approve things that may directly alter management of a regulatory case that’s already underway.

PNM says there’s no urgent need to open proceedings now, since the plant would not close until 2022, and the PRC should let the Legislature do its job.

“It’s not the PRC’s role to set policy,” said PNM Vice President for Public Policy Ron Darnell. “To the extent that their actions impede legislation, it’s not in the best interest of New Mexicans.”

Environmental groups are divided on the forthcoming legislation, which would allow PNM to recover 100 percent of its investment in San Juan by selling low-cost bonds that utility customers would pay for through a surcharge on their bills. The money raised would then help finance renewable energy replacement power, while providing resources to mitigate impacts through economic development projects.

But opponents call it a bailout for the utility, which might not receive full recovery for its coal investments if left to the PRC, which must balance the costs of early plant closure between utility customers and PNM shareholders.

Some environmental groups fear some commissioners may deliberately want to interfere with the legislation. Western Resource Advocates and the Coalition for Clean Affordable Energy, which may support the PNM-backed bill once filed in the session, wrote briefs questioning PRC motivation.

“It is absurd to assume that the commission can bootstrap authority to itself, that it would not otherwise have, by opening a docket contrived to preclude legislative action,” WRA said.

CCAE called it a “pre-emptive” action by the PRC that may be intended to “prevent the Legislature from taking any action related to the San Juan plant during the 2019 session.”

Commissioners, who voted 5-0 on Jan. 10 to consider immediate proceedings, said it’s their job to review the issue, independent of what the Legislature does.

“I was aware it could impact legislation on San Juan, but it’s up to the lawyers to determine that,” said Commissioner Stephen Fischmann. “It’s careless and unwise for us to make decisions speculating about what happens on legislation when so many dollars are at risk.”

PRC Vice Chair Valerie Espinoza said there’s nothing unusual about opening a hearing to get all the facts on the table.

“Why wait on legislation?” Espinoza said. “We don’t even know if it will be passed.”

New Energy Economy, which opposes the legislation, said it’s the PRC’s “constitutional duty” to move forward.

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