PNM looks to close coal-fired San Juan plant (if they get a rate increase from the PRC)

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Santa Fe, NM –  PNM is beginning the process to plan for a permanent shutdown of the coal-fired San Juan Generation Station by 2022. The SJGS is responsible for generating nearly 60% of the state’s power, but it relies on coal power and a nearby coal mine PNM purchased last year to support it.

PNM proposed two scenarios for future power production: one to keep the plant in operation after 2022, the other to close it and shift to a larger renewable portfolio.  But, PNM added a catch: the scenarios supporting closing the plant are tied to PNM’s latest rate increase request to the PRC which asks for electricity rates to increase by as much as 14% for New Mexico customers.

“I want to stress that is only a preliminary finding regarding our San Juan Generating Station,” Vincent-Collawn told the Albuquerque Journal. “No decisions have been made. We have a lot of work to do and will be having discussions with the other owners and considering public input before the IRP is finalized.”

But that power has come at a cost. Western Resource Advocates note that, “since it began operation in the 1970s, the four coal-fired boilers have been the largest source of air pollution in the state and have impacted Arizona, Nevada and Colorado in the Four Corners area. The plant releases over 13,000,000 tons of carbon dioxide a year and contributes to haze pollution, acid rain, and health issues in the region.”

In a press release received from New Energy Economy, rate hikes, environmental impact, and an urgency to move toward renewable sources of energy, are all cited as grounds for the decision.

SANTA FE, NM – Today, PNM has announced that it will finally retire the coal behemoth in the Four Corners area, the 1800 MW San Juan Generating Station (SJGS). This is a victory for the people of New Mexico who have been expressing outrage at PNM’s continuous re-investment in coal that has had serious deleterious impacts on public health, our economy and the environment.

“The economic handwriting has been on the wall for a long time for PNM’s coal plant. What’s key now is what so many New Mexicans have been telling the company and PRC all along: that we need to not only move off coal but also make the switch to 100 percent renewable energy because that’s what’s best for our local economy, our water, our climate and affordable electricity. It’s critical that some of this renewable energy transition take place to benefit San Juan County where the plant is closing. It’s also really important that PNM take responsibility for cleaning up and remediating the toxic coal plant and mine, assisting workers, and doing its fair share on all the financial issues around closure. Today’s news is a milestone for sure, and now there’s more to do ahead to get where we need to go,” stated Mariel Nanasi, Executive Director, New Energy Economy.

NEE cited the declining costs of renewable energy as a major contributor to PNM’s decision to close its fossil fuel generating base.

There are cleaner alternatives already being adopted by other energy companies in New Mexico. Southwest Public Service’s (SPS) has installed two new solar facilities: 70 MW in Roswell and another 70 MW in Chavez County that went into production in 2016 at a cost of 4.2¢/kWh that will save consumers $84 million net present value (NPV) over the life of the project. SPS had 700 MW of wind approved as a system resource by the New Mexico PRC at cost of 2.3¢/kWh, that will save ratepayers $590 million NPV.[1] In 2014, El Paso Electric (EPE) is getting 50 MW of solar energy from the Macho Springs Solar facility, located in Luna County, at a price of 5.8¢/kWh and costs have continued to decline since.[2] When PNM issued an all-source request for proposal in 2016 for 50 MW of powers it received market bids for a market price of 4.2¢/kWh[3] for solar and a market price of 3.3¢/kWh wind,[4]both significantly below current costs of coal (7¢/kWh)[5] and nuclear (9.5 ¢/kWh).[6] PNM declined to purchase any renewable energy even at these low costs. Reliably integrated renewables are cheaper for customers, better for our health and environment!

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This issue has a storied history, with push back from elected officials and numerous municipalities, calling for PNM to “clean up” its act. 

With renewable sources such as wind and solar not only being healthier for the environment but the consumer as well, power generated by the burning of coal seems to be headed out of the equation for powering New Mexico’s future. As contracts regarding the operation of the SJGS currently approach their end, ProgressNow NM will keep our eyes on decision makers who directly affect our air and water, our natural resources and our health.

New Energy Economy also notes that the plant has had a history of environmental compliance issues. One report from New Mexico’s Environment Department shows that the coal plant was sited for nearly 60,000 violations between 2005 and 2008.

The plant employs hundreds of local workers, however, and it was not clear what plan PNM would have for transitioning those workers to other jobs. In 2016, Congressman Ben Ray Lujan joined Sen. Udall and Heinrich to announce new economic development funds for the Four Corners Economic Development Foundation to assist in job training and small business start up.  PNM also pledged $1 million to the organization to assist with Navajo job training programs to retrain coal mine workers and plant workers who transitioned to other jobs when PNM closed some generation capacity in 2015.


About New Energy Economy 

New Energy Economy is a registered nonprofit organization established in 2004 to create economic opportunity in New Mexico with less carbon pollution and more clean energy. New Energy Economy works in partnership with diverse allies to encourage job growth, investment and innovation in a more efficient, sustainable and equitable energy sector. New Energy Economy grounds its work in the research and findings of the world’s leading scientific and technological authorities. Learn more at