ALBUQUERQUE, N.M. — Public Service Company of New Mexico, the state’s largest electric utility, has withdrawn from regulatory consideration a plan to build a $100 million natural gas plant and pipeline in San Juan County.
In a conference call with investors last week, PNM said it was abandoning the proposal due to lower-than-expected energy demand projections.
“We’re finding the highest points are not as high as we had previously forecasted,” CEO and President Pat Vincent-Collawn said during the call. “As a result of this, we have decided to file a motion to withdraw the application.”
The company filed the motion with the New Mexico Public Regulation Commission on Friday.
The 80-megawatt plant was part of PNM’s plan to replace energy lost from the closure of half of the coal-powered San Juan Generating Station. PNM agreed to the closure as part of a 2015 settlement with the Environmental Protection Agency aimed at reducing air pollution in the Four Corners area.
In a statement, PNM spokesman Pahl Shipley said it is possible the company will revive the proposal in the future. PNM is currently evaluating its energy portfolio for the next two decades.
“The current forecast indicates PNM will need additional resources by 2020,” said Shipley. “We will continue to evaluate resource needs going forward and will file a new application with the commission if a new plant or other resources are required to serve PNM customers.”
In its motion to withdraw the plan, the utility said it would use market purchases to meet any energy needs in 2018 and 2019 that go beyond its current resources. The motion was unopposed by any of the intervening parties in the case.
PNM’s gas plan met the fiercest resistance from the advocacy organization New Energy Economy, which accused the utility of proposing an unnecessary project to justify increasing customer rates and the company’s profits.
“We are thrilled that PNM is dismissing their gas plant and gas pipeline case,” said Mariel Nanasi, New Energy Economy’s executive director, in a statement. “Consumer demand is actually going down, but despite this, PNM thought they could get away with even more bloat: $100 million for a superfluous gas plant and gas pipeline just to line the pockets of PNM’s senior management off the misery of the poor.”
Shipley declined to comment on Nanasi’s comments.
Though none of the intervening parties opposed PNM’s motion to withdraw the application, New Energy Economy opposed the utility’s request to halt the collection of additional documents and information from PNM as part of the legal process known as discovery.
PNM has reported a 16 percent net earnings drop to $40.9 million in the third quarter compared to the same time a year ago. The drop was due in part to decreased electric demand at Intel’s Rio Rancho plant, as well as a recent rate case decision that approved a customer rate hike far smaller than the one PNM had requested. The company’s third quarter earnings reflected $11.3 million in pre-tax regulatory disallowances and restructuring costs as a result of that decision.
PNM has said it will file a new rate case in December.