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PNM, critics reach deal on new San Juan plan

ALBUQUERQUE, N.M. — Public Service Co. of New Mexico and four other parties signed a new agreement on Thursday to end their dispute over the future of the coal-fired San Juan Generating Station near Farmington.
The settlement resolves all outstanding disagreements among the parties, potentially paving the way for the state Public Regulation Commission to approve PNM’s plan to shut down two of the power plant’s four generating units to meet federal haze regulations. Environmental, clean energy and consumer organizations had opposed PNM’s proposals for San Juan, largely because the utility and its parent firm, PNM Resources, wanted to acquire 197 megawatts of excess coal generation that will be left behind in one of the two remaining generators after some plant co-owners depart from the facility. Those groups wanted PNM to shut down more of the plant and require PNM to instead seek solar and wind power to replace the lost coal generation.
But the new accord ends that opposition, allowing PNM to take ownership of the additional 197 MW to keep San Juan’s two remaining units fully operational. In exchange, PNM has agreed to:
— a new PRC review in 2018 over whether more or all of San Juan should be shut down after 2022, when the current partnership among plant co-owners expires and PNM’s coal supply contract for the facility comes to an end;
— a simultaneous review in 2018 of alternative sources of energy to fully assess the costs and benefits for replacing more San Juan generation in New Mexico;
— a commitment by PNM’s parent firm not to acquire any more coal capacity at San Juan for sale on the open market apart from the excess capacity now being absorbed at the plant;
— procurement of renewable energy credits for clean power development equivalent to the 197 megawatts of excess capacity being absorbed at San Juan; and
— PNM acceptance of the net book value of $1,100 per kilowatt for 134 MW of extra power from the Palo Verde Nuclear Generating Station in Arizona that PNM plans to bring onto the New Mexico grid to replace lost generation after half of San Juan is shut down in 2017.

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