ALBUQUERQUE, N.M. — The state Public Regulation Commission voted unanimously Wednesday to reject a plan by El Paso Electric Co. to build a new $160 million, 228 megawatt natural gas power plant to serve utility customers in southern New Mexico.
The five-member commission accepted a hearing examiner’s recommendation that approving the plant would violate New Mexico’s Energy Transition Act, which requires the state’s public utilities to convert their grids to 50% renewable resources by 2030, 80% by 2040 and 100% carbon-free generation by 2045. The examiner, Elizabeth Hurst, said EPE didn’t adequately consider renewable alternatives.
In addition, if approved, the gas plant would have a 40-year service life after coming online in 2023. That would extend plant operations nearly two decades beyond the state’s 2045 non-carbon target date, potentially strapping New Mexico customers with a stranded asset if EPE seeks full investment recovery in the future.
“EPE failed to consider the Energy Transition Act,” Hurst told commissioners. “It had time to do that, but it chose not to.”
EPE said it must replace three aging gas turbines at its Newman Generating Station in El Paso to help meet future demand with a modern, efficient generating unit that could cut costs while also lowering emissions. It also needs reliable back-up generation as it adds 250 MW of new solar and battery storage in New Mexico, which the PRC previously approved.
The company, which serves about 430,000 customers in southern New Mexico and West Texas, already received approval from regulators in Texas, where about 80% of its consumers are based. And, according to PRC attorney Russell Fisk, EPE said it would build the gas unit even without PRC approval, suggesting the PRC follow the lead of Texas regulators by letting the project move forward.
“Texas has different laws, and it’s asking us to simply follow a decision based on Texas law,” Fisk told commissioners.
PRC Chair Stephen Fischmann noted, “They said they already started it. They assume it will get approved. I find that problematic – the idea that they could force the commission into approving a project that in many respects is contrary to New Mexico law.”
Commissioner Jefferson Byrd said he didn’t think the gas plant necessarily violates the energy act, because it would help lower emissions by replacing aging gas units that emit a lot more pollutants. But he voted against approval because EPE didn’t adequately assess other alternatives.