PNM seeks to extend life of San Juan power plant

Feb. 18—The San Juan Generating Station will blow smoke three months longer than expected, according to a plan unveiled this week by Public Service Company of New Mexico.

PNM and its ownership partners in the coal-fired San Juan power plant in northwestern New Mexico intended to close it at the end of June. But replacement energy sources haven't come through, and PNM expects to keep the plant open long enough to get through the peak demand summer months. Without it, the prospect of rolling blackouts is real, PNM has said.

PNM said the New Mexico Public Regulation Commission still must approve the plan before it can be put in place.

The issue has worsened hard feelings between PNM and the commission, which two months ago rejected a major merger plan from PNM. Everyone agrees, however, they want to get through the summer without rolling electricity blackouts.

Attorney General Hector Balderas this week accused the commission of delays and inaction.

"Most troubling has been the Commission's failure to act in a timely fashion to approve additional electric generation capacity that would serve New Mexico customers, including during recent and upcoming summer peaking periods," Balderas said in a letter to the commission.

Others see PNM as responsible for the situation.

Stephanie Dzur, a former attorney for the Coalition for Clean Affordable Energy, said some of PNM's filings with the commission are convoluted.

"I put a lot less blame" on the commission, said Dzur, who is in private practice in Albuquerque.

"PNM never files anything that's straightforward," she said. Instead, Dzur added, commissioners must "go through all this gobbledygook" in PNM proposals.

A PNM executive said keeping San Juan open for three months was a hard decision.

"This wasn't the path that we would have preferred," said Tom Fallgren, PNM's vice president for energy generation. Without San Juan, PNM has no energy reserves for the summer and in fact faces a deficit, he said.

PNM offered a replacement energy plan in 2020 that included natural gas, but the commission steered the company toward solar energy projects. The supply chain crisis then hit, and the contractors for those projects said they couldn't get the supplies to build projects rapidly enough to generate electricity by summer 2022.

PNM has said if it had been allowed by the Public Regulation Commission to follow the course it desired, it wouldn't be in this situation.

But Commissioner Stephen Fischmann of Las Cruces said this week PNM sat on bids for replacement projects for 18 months without taking action.

"If they had acted promptly on those bids on those projects, we would have gotten an early start and we would never have been facing the supply chain issues that we're facing now," Fischmann said. He added, "Let's just sit down and fix stuff."

Fallgren said Fischmann was off base. It took 12 to 18 months to get through the bid process, he said, which is fairly normal.

The matter prompted enough concern for several Republican lawmakers in the House to push a bill allowing the power plant to stay open until at least early 2025. The House rejected the legislation this week.

Some environmental groups said they could live with keeping the San Juan Generating Station open for a brief time under the circumstances.

Noah Long, a senior attorney with the Natural Resources Defense Council, said it was unfortunate but not surprising.

"It's the least bad outcome," said Long of Santa Fe. The supply chain crisis "caused a delay that nobody expected."

The Sierra Club's Camilla Feibelman said in news release, "Keeping San Juan running an extra three months may be necessary to keep PNM's reserve margin high enough until replacement resources start coming online in September."

Steve Michel, an attorney with Western Resource Advocates, said: "We understand the supply chain situation."

He added, "We're not thrilled about more fossil [fuel] generation, but we understand it may be needed over the summer."

Reporter Robert Nott contributed to this story.