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Hard choices ahead on carbon in NM

A new analysis by Western Resource Advocates on the potential impact of proposed federal carbon regulations shows New Mexico is well positioned to meet the rules, but it may have some hard choices ahead to fully comply.

The rules, which won’t be finalized until June 2015 following a year of public comment, call for all states to reduce their carbon emissions from existing fossil fuel power plants by 30 percent below 2005 levels by 2030.

The U.S. Environmental Protection Agency has set specific reduction goals for each state based on total emissions from local power plants and the amount of carbon emitted from all generation statewide. It used that to calculate current levels of carbon emissions per megawatt hour for each state and then set reduction amounts needed to meet the proposed regulatory targets.

For New Mexico, the rules as written call for cutting emission rates 34 percent by 2030, based on the state’s carbon output in 2012, which the EPA used as a base year. That means New Mexico needs to cut its emission rate from an estimated 1,585 pounds per mwh now to 1,048 per mwh.

The EPA included eight natural gas generators and two coal-fired plants in its calculations for New Mexico. The coal plants include the 1,700 MW San Juan Generating Station run by Public Service Company of New Mexico and the 257 MW Escalante plant owned by Tri-State Generation and Transmission. PNM also owns three of the natural gas generators, with three more run by Southwestern Public Service Company and one each by El Paso Electric Company and the city of Farmington.

Western Resource Advocates estimates that, under current PNM plans to cut coal generation at San Juan – plus all renewable electricity and energy efficiency measures that have either already been implemented or are planning to be implemented in New Mexico – the state will achieve about 84 percent of the EPA mandate by 2030.

But while the additional 87 pounds per mwh needed to reach the target is relatively minor, it may mean adding a good deal more renewables to the grid than are currently planned, or cutting more coal-fired generation than anticipated now under PNM’s plan to close two of the four generating units now operating at San Juan.

If the state relied, for example, on just adding more renewables to the grid to meet EPA mandates, Western Resource Advocates’ analysis shows New Mexico would need between 500 and 700 MW more of solar or wind generation than is currently planned to get below the 1,048 pounds per mwh mandated by the EPA.

Alternatively, if the state relied on vacating more coal generation at San Juan, the analysis shows that another 300 MW would need to be cut to meet EPA’s 2030 emission target, above and beyond the 838 MW currently slated for shut down.

PNM says such analysis is premature because EPA’s rules call for statewide plans in which all utilities bear responsibility for either lowering power plant emissions or adding more renewables and energy efficiency to their electric plans going forward. In addition, EPA rules won’t be finalized until next year, and the mandates could change.

“We don’t yet know the full impact of new carbon regulations for New Mexico, but we believe the actions PNM is already taking to shut down two units of its coal plant will put our state well down the path for complying,” Maureen Gannon, PNM executive director of environmental services, told the Journal.

But Steve Michel, chief counsel for Western Resource Advocates, said PNM likely will bear the highest burden, given that it operates the largest coal generator in New Mexico and three of the eight natural gas plants included in the EPA regulations.

“Based on our calculations, PNM is in a worse position than the state as a whole,” Michel said. “El Paso Electric and SPS are much more compliant in New Mexico with proposed regulations. Their carbon footprint is much lower.”

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