The state Legislature needs to do what it can to soften the economic blow to northwestern New Mexico caused by the winding down of the coal-fired San Juan Generating Station, says the co-chairman of the legislative Water and Natural Resources Committee.
Public Service Company of New Mexico shuttered half the power plant in December and plans to close the facility altogether in June 2022. The plant and its neighboring coal mine employ about 450 people, down from about double that in 2013.
This week, the Water and Natural Resources Committee will hold a hearing in Farmington on the fallout from the plant’s closure.
“We wanted to hear from the local people what the issues were and what we can do to help them from the Legislature. That’s what we’re all about,” says Rep. Bealquin Bill Gomez, the committee’s co-chairman.
“It’s pretty grim up there,” says Gomez, a Democrat from La Mesa in Doña Ana County. “I hope we get something done.”
The Water and Natural Resources Committee will meet Thursday and Friday at San Juan College.
The committee will hear about retraining power plant and mine workers, the loss of local tax revenues due to the plant closure and efforts by San Juan County to diversify its economy. The county, long reliant on extractive industries, also has been hit hard by a downturn in the natural gas industry.
The Water and Natural Resources Committee also will consider draft legislation that would pave the way for PNM to recover from customers some or all of the value of the plant, as well as costs associated with the decommissioning of the facility and reclamation of the mine.
The legislation would require PNM to seek approval to replace the lost coal-fired power with power produced from resources located in Central Consolidated School District, the same school district as the San Juan Generating Station. That could mean the construction of a gas-fired plant, solar fields or wind turbines.
Also under the bill, local authorities would receive money to help fund efforts to diversify the economy.
Similar legislation died during the Legislature’s session this year. It was one of the most controversial bills of the session.
Critics called it a bailout of the utility’s investment in coal energy. Supporters said the state needs to help northwestern New Mexico weather the closing of the San Juan Generating Station.
Rep. Matthew McQueen, co-chairman of the Water and Natural Resources Committee, says the panel hopes to hear from supporters and critics of the legislation at the Farmington hearing.
“Hopefully we set the stage for a constructive dialog,” says McQueen, D-Galisteo. “I certainly expect legislation” to be introduced when the Legislature reconvenes in January.
The San Juan County economy has been on the ropes in recent years, in large part because of lower natural gas prices, the cutback at the San Juan Generating Station and a partial shutdown of a second coal-fired power plant operated by Arizona Public Service.
The New Mexican reported last month that the number of people employed in San Juan County has shrunk by more than 5,000 since October 2008. The county population dropped by an estimated 6,000 people between 2012 and 2016, the most recent year for which there is an estimate from the U.S. Census Bureau.
The closure of the San Juan Generating Station and the job losses will mean less tax revenue for local and state governments. In 2016, the plant alone paid $5.1 million in property taxes, according to PNM. The tax money goes to the state, county, town of Kirtland and local schools.
PNM shuttered two of the plant’s four generating units last year to comply with federal haze regulations.
The utility says customers will benefit economically from closing the plant altogether in four years and replacing the coal power with electricity generated by natural gas units and nuclear, wind and solar power.