The New Mexico Public Regulation Commission expects to decide on what mix of new generation will replace the coal-fired San Juan Generating Station by July 29.
That’s critical, because contracts for two huge solar power plants with back-up battery storage currently under consideration must be signed with third-party developers by July 30 if commissioners choose to approve those projects.
Hearing examiners Ashley Schannauer and Anthony Medeiros on Tuesday morning presented their recommendations to commissioners on the best mix of generating resources to replace San Juan after Public Service Co. of New Mexico abandons the plant in 2022.
The examiners said the state’s new Energy Transition Act sets important policy goals for commissioners when selecting replacement power. That includes locating some new resources in the Central Consolidated School District in San Juan County to offset the loss of local tax revenue and jobs connected to the coal plant. It also emphasizes use of clean energy to reduce environmental impact from new generation.
Traditional concerns about reliability and cost are important but secondary under the ETA, although commissioners must decide how to fairly balance those issues when choosing a mix of new resources from an array of proposals discussed during a week of public hearings last January, the commissioners said.
Under the ETA, location in the school district is particularly important.
“Legislators made that abundantly clear in the ETA,” Medeiros said. “There’s no doubt legislators intended that as a priority, and possibly the highest priority.”
Based on ETA priorities, the examiners recommend an all-renewable portfolio of generation that would place 950 megawatts of new solar facilities with back-up battery storage in San Juan and neighboring McKinley and Rio Arriba counties, bringing at least $877 million in new investment to the region and about 1,200 construction jobs.
That would “essentially preserve” the tax base lost from the coal plant, Schannauer said.
If commissioners choose to prioritize cost, the examiners recommend a mix of solar and battery storage along with a new 200-MW natural gas plant in San Juan to provide back-up power when the sun isn’t shining.
Including natural gas might be cheaper than an all-renewable approach. But it would run counter to the ETA goal of achieving carbon-free generation by 2045, Schannauer said.
No commissioners voiced any preferences. But PRC Chair Theresa Becenti-Aguilar said location in San Juan County will be a critical priority in any decision, especially given the devastating impact of coronavirus in Northwest New Mexico.
“All decisions by the commission should take a humanitarian approach to help families there,” she said.