(ALBUQUERQUE, N.M.) – PNM today filed a settlement agreement with state regulators that, if approved, would allow the company to implement a revised state plan for San Juan Generating Station to comply with federal environmental regulations while minimizing the cost to customers. The settlement, the result of extended negotiations with several parties involved in the filing, also provides more opportunity for the company to continue adding renewable energy. In addition to significantly reducing the use of coal, PNM would cut water use and seven different emissions (including carbon) at the plant by about 50 percent.
"This is an important step forward toward final approval of a plan for San Juan that offers the best balance of reliability, affordability, and environmental protection," said Pat Vincent-Collawn, PNM Resources' chairman, president and CEO "It is a clear demonstration of the value that is created by working together with our stakeholders to find a solution that maximizes benefits and lowers costs."
Today's settlement was signed by staff of the N.M. Public Regulation Commission (NMPRC), the N.M. Attorney General, Renewable Energy Industries Association of N.M., N.M. Independent Power Producers and Western Resource Advocates. It requires approval from the NMPRC to be implemented. On Oct. 7, the parties to the NMPRC filing will meet with the Hearing Examiner to discuss a new procedural schedule for this case. A final decision is expected early next year. The U.S. Environmental Protection Agency announced its final approval of the revised state plan on Sept. 26.
To comply with federal haze regulations under the Clean Air Act, PNM asked the NMPRC for permission to close Units 2 and 3 at its coal-fired San Juan Generating Station (SJGS) by Dec. 31, 2017 and install emissions control equipment on the remaining two units. PNM also proposed replacing some of the lost power with energy from its share of Palo Verde Nuclear Generation Station Unit 3 and to add 132 megawatts of additional capacity from San Juan Unit 4 as part of a restructuring agreement between PNM and the plant's eight other owners. In other filings, PNM is proposing additional replacement power from natural gas and solar generation.
Key facts in the settlement, if approved by the NMPRC:
• Allows PNM to proceed with retiring the two units at San Juan Generating Station;
• Allows PNM to acquire additional power from company-owned capacity at Palo Verde Nuclear Generating Station;
• Would result in an increase of approximately 7 percent to the average customer's bill, or about $5.25 per month.
Additional PNM support for renewable energy in the settlement:
• PNM will extend its successful customer rooftop solar program through 2019. The current program is only approved through 2016.
• PNM will also issue a request for proposals in 2015 for an additional 50 megawatts of renewable energy and file for permission to add any
amount or type of resource that is cost-effective.
NMPRC approval is the final regulatory hurdle for a revised state plan originally proposed 18 months ago by PNM, the N.M. Environment Department and EPA representatives as a more cost-effective and environmentally-friendly approach for complying with federal haze regulations. Implementation of the plan will save PNM customers an estimated $800 million over 20 years versus a more expensive option that would have kept all four units at the coal-fired power plant running. The plan also puts New Mexico well down the path toward compliance with new carbon regulations proposed by the EPA in June.
There are other parties to the case who are not signatories to this settlement.