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PNM agreement would lessen impact on ratepayers

ALBUQUERQUE, N.M. — Public Service Company of New Mexico announced a settlement agreement Wednesday afternoon with some key parties involved in the regulatory debate over the future of the coal-fired San Juan Generating Station near Farmington.

The agreement outlines significant concessions by the utility to lower costs to ratepayers for not just shutting down two of the four reactors at San Juan, but also for the fuels that will replace the lost coal generation. That includes 134 megawatts more of electricity that PNM would take from the Palo Verde Nuclear Generating Station in Arizona for use in New Mexico.

The plan also commits the company to consider adding more renewable energy to the grid than anticipated by PNM in its original proposals for San Juan replacement power.The settlement was signed by five groups who are intervening in the case at the New Mexico Public Regulation Commission, including the PRC’s utility division staff, the Attorney General, the New Mexico Renewable Industries Association, NM Independent Power Producers and Western Resource Advocates.

As a result of the agreement, if approved by the PRC, the costs for partially shutting San Juan will result in a approximately a 7 percent increase on the average PNM customer’s bill after 2018, or about $5.25 more per month. Prior to the settlement agreement, PNM had estimated cost to ratepayers at about $7.50 per month, or a 10 percent increase.”This is an important step forward toward final approval of a plan for San Juan that offers the best balance of reliability, affordability and environmental protection,” said PNM Resources Chairman, President and CEO Pat Vincent-Collawn in a statement. “It’s a clear demonstration of the value that is created by working together with our stakeholders to find a solution that maximizes benefits and lowers costs.”

Still, some environmental organizations and clean energy advocates abstained from signing the agreement, including the Coalition for Clean Affordable Energy, which represents 10 different groups, and New Energy Economy in Santa Fe. They remain opposed to key parts of PNM’s plan, particularly the utility’s intent to absorb 132 megawatts of additional coal generation in one of the remaining two reactors after some current owners vacate the plant. They also want PNM to forego additional nuclear energy from the Palo Verde and instead rely on more renewables to replace coal.