ABQ Times

In an unanimous decision, New Mexico’s Public Regulation Commission (PRC) has approved a plan by the Public Service Company of New Mexico (PNM) to abandon the coal-fired San Juan Generating Station by 2022, as well as paying for lost investment in the plant through low-cost bonds that will pass the cost on to ratepayers.

The authorization is for $361 million in securitization bonds, which would include all of the shutting down and decommissioning of the plant, including approximately $40 million for assistance to laid-off employees and economic development initiatives in the area.

The surcharge to repay the bonds will come to customers as an extra $1.90 per month on power bills under 900 kilowatt hours and a charge of $4.97 per month on bills over 900 kWh.

PNM has said that moving to cheaper forms of energy production will offset the increase to monthly bills to pay back the bond.

PNM is a subsidiary of PNM Resources, which has the highest paid CEO in the state for a publicly traded company. CEO Pat Vincent-Collawn’s total compensation comes to $4.4 million annually. That compensation as calculated by the Associated Press may include salary, bonus, stock awards, stock option awards, deferred compensation and other components that include benefits and perks.

PNM requested to make the move last July, but it took the commission almost a year to approve the request due to reluctance by commissioners over the repayment of bonds by customers.

The New Mexico Energy Transition Act (ETA) authorizes public utilities to use bonds to cover costs such as those involved in abandoning the San Juan coal-fired plant.

The ETA went into effect last June, and requires all of the state’s public utilities to reach a point where 50% of their power generation is from renewable resources by 2030. Additionally, the ETA requires the public utilities to be 100% carbon-free in power generation by 2045.

In January, the New Mexico Supreme Court ruled that the ETA is applicable in PRC proceedings, clearing the way for the 5-0 vote by the commissioners.

“We are pleased with the decision by the commission and the hearing examiners’ recommended decisions to approve the abandonment and securitization of San Juan,” Vincent-Collawn said in a statement. “Our customers, communities, and environment will benefit as we move to exit all of our coal-fired generation and replace it with lower-cost, clean energy resources.”

PNM is still awaiting a decision by the PRC as to what sources can be used to replace the San Juan plant. The proposal is for a mixture of solar, wind and natural gas generation.