Navajo-Coal Plant

The Four Corners Power Plant in April 2006. The plant is now slated to close down in 2031 instead of 2038.

A bevy of organizations filed briefs this week to express dissatisfaction with Public Service Company of New Mexico’s plan to leave the Four Corners Power Plant.

Their latest submissions in the case before the New Mexico Public Regulation Commission follows a hearing examiner’s recommendation that mostly supported PNM’s plan to abandon the coal-fueled power plant in northwestern New Mexico.

Nine entities filed objections, although some of those were only partial objections that didn’t oppose abandonment of the plant at the end of 2024. Nevertheless, most offered criticism of the plan and of hearing examiner Anthony Medeiros’ 0ov0erall support of it.

Medeiros, a quasi-judge to the Public Regulation Commission, only has authority to make recommendations; the ultimate decision will be made, probably next month, by the five-member commission. After that, the case could be appealed to the New Mexico Supreme Court.

Commission staffers argued in a filing: “Instead of allowing this cynical cash grab, the Commission should simply deny PNM the authority to abandon the FCPP [Four Corners Power Plant] at this time.”

Some critics, including PRC staff and San Juan County, said PNM has failed to show how it would replace the energy left behind at Four Corners. The primary job of an electric utility is “keeping the lights on,” commission staff said, and PNM “fails this test because it did not identify sufficient generation resources to replace the facility.”

PNM argues, on the other hand, it has balanced the interests of the public, the environment and the Navajo Nation, where the plant is located. Medeiros agreed, saying the plan has a “net public benefit.”

Key elements of PNM’s proposal to leave Four Corners Power Plant include:

u Withdrawing its part ownership of the plant at the end of 2024.

u Paying Navajo Transitional Energy Co. $75 million in shareholder money to take over PNM’s 13 percent of the plant.

u Issuing about $300 million in 25-year, low-interest bonds through the state’s 2019 Energy Transition Act. The money would help cover capital investments already made in the plant and smaller allocations for a workers assistance fund, financing costs, plant decommissioning and other things. The bonds would be paid by PNM customers.

Some opponents, such as the Sierra Club and New Energy Economy, say ratepayers shouldn’t have to fund capital investments PNM made several years ago in a fading coal plant. They call those investments “imprudent,” or unwise. The plant is supposed to close by 2031.

They also contend PNM’s plan does little for the environment because, while the company would get out of the plant, pollution would keep spewing. Further, the hand-off to the Navajo Nation could prolong the activity of the plant, they say, because the nation has so many jobs there.

Medeiros’ findings on PNM’s Four Corners departure contrast with those of another PRC hearing examiner in PNM’s proposed merger with Avangrid of Connecticut and Iberdrola of Spain. In the latter case, numerous parties have ultimately supported the merger proposal, but hearing examiner Ashley Schannauer criticized the plan as not being in the public’s interest.



On the Four Corners proposal, Medeiros agreed with PNM and accepted the utility’s assertion the proposal would save customers $30 million to $300 million compared to the cost if it stayed in the plant until 2031. The Attorney General’s Office, which gave early support to the merger proposal, expressed contempt for the plan to issue some of the $300 million in bonds for the Four Corners abandonment.

Approving some of the capital expenditures “risks an outcome that is manifestly unjust, contrary to the public interest,” the Attorney General’s Office wrote.

The plan calls for seasonal operation of Four Corners. This, PNM said, would reduce emissions by 20 percent to 25 percent.

Medeiros said the transfer to NTEC would “strengthen the Navajo Nation’s position in determining the future of a plant that, it should not be forgotten, has been operating on its sovereign soil and producing electricity for non-Indigenous consumers and far-flung communities for nearly sixty years.”

PNM contends a similar deal with another company isn’t likely if the commission vetoes the giveaway to NTEC and that PNM could then remain stuck in the polluting plant until closure.

PNM spokesman Ray Sandoval wrote in an email Wednesday: “The current proposed plan was a very delicate negotiation that took the better part of three years to finalize. There are no assurances that the unique opportunity in front of the commission to provide these benefits can be modified, extended, or reoccur at a future date.”

One element on which Medeiros agreed with opponents is a clause stating PNM couldn’t vote for closure of the plant while it’s a part owner.

Opponents say this could prolong the working life of the plant, and Medeiros said the clause should be removed.

So PNM will have to reengage in negotiations with NTEC, which currently has a 7 percent share of the plant.

Besides PNM and NTEC, the owners of the plant are Arizona Public Service (63 percent), Salt River Project (10 percent) and Tucson Electric Power

(7 percent).

A joint report by Bernalillo County and the Albuquerque/Bernalillo County Water Utility Authority said the PRC’s approval of the Four Corners plan “would impose a grave injustice on ratepayers, who must rely upon the Commission to balance their interests with those of PNM.”

“The only transition to carbon free energy will be on paper, from PNM’s generation portfolio, with no measurable reduction in carbon dioxide” emissions,” the report said.

(3) comments

Mike Johnson

Again, we are a capitalist society, and these PNM capitalists (executives, employees, and shareholders) need to be held accountable for their mistakes and decisions over the years on this investment they made. Rate paying customers have no responsibility for these bad judgements and poor management, they should not have to pay one penny. Simple and the end.

Paul Gibson

Here here Mike but the capitalist system protects capitalists, not customers

Mike Johnson

It needs to be well regulated, in this case it was not and is just a political football.

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