The New Mexico Public Regulation Commission is preparing to take up what some energy experts have called a watershed utility case that could set the stage for energy policy in the state for decades to come.
The commission on Monday will begin a two-week hearing on a proposal that calls for closing part of the San Juan Generating Station, a coal-fired power plant that serves more than 2 million customers in the Southwest.
The terms of the proposal were negotiated in 2013. The U.S. Environmental Protection Agency, the state attorney general’s office, the New Mexico Renewable Industries Association and others have already signed off, but the agreement still requires commission approval.
The proposal is aimed at balancing the need to cut haze-causing pollution with keeping rates reasonable for customers.
PNM has proposed doing that by shutting down two units at the power plant and replacing the lost power with a mix of coal from one of the plant’s other units, electricity generated by the Palo Verde nuclear plant in Arizona, a new natural gas-fired plant and more solar generating stations.
PNM’s regulatory filings estimate the cost over 20 years at more than $6.8 billion. The utility says its plan represents the most cost-effective alternative for dealing with federal environmental mandates that call for reducing emissions at San Juan.
The environmental group New Energy Economy has accused PNM of withholding from the commission information about the plan’s price tag. The group contends PNM failed to weigh the costs of environmental regulations and the disposal of coal ash waste generated by the power plant.
New Energy Economy also has filed a motion seeking the recusal of Commissioners Patrick Lyons and Karen Montoya from deliberations. The group claims phone calls and emails between the commissioners and PNM have created at least an appearance of a conflict of interest, a claim the commissioners deny.
It wasn’t clear when a decision on the motion would be made.
PRC officials did not immediately respond to emails or phone calls seeking comment.
New Energy Economy executive director Mariel Nanasi said the motion should be addressed before the hearing begins Monday in Santa Fe.
“If one commissioner is biased and he or she sits for an agency decision, it taints the entire decision,” she said.
Environmental groups and consumer advocacy organizations are planning to rally outside the hearing.