PNM merger impacts are far-reaching

By Mona Blaber, Chapter communications

As PNM exits Four Corners plant, NTEC seeks to keep it open

A surprise merger, New Mexico’s biggest electric utility exiting the state’s biggest coal plant and the potential acquisition of that share by Navajo Transitional Energy Company all have big implications for Four Corners communities, Navajo Nation, ratepayers and the coal plant’s lifespan.

In October, PNM and Avangrid announced plans to merge in what the companies claimed will create “one of biggest clean-energy companies” in the United States. The combined entity would own 10 utilities in six states, with renewable operations in 24 states. Avangrid has two divisions — one that builds utility-scale renewable-energy facilities, including a large New Mexico wind facility, and another that acquires and runs local utilities.

For months before the merger announcement, organizations such as Diné CARE and Western Clean Energy Campaign had expressed concern as rumors swirled that Navajo Transitional Energy Company, or NTEC, was negotiating to take on PNM’s 13% stake in the coal-fired Four Corners Power Plant on Navajo land near Farmington.

The Navajo Nation owns NTEC, creating it eight years ago to purchase Navajo Mine, which feeds Four Corners. But NTEC is not run by the Nation, which in recent years has expressed its intent to move toward more sustainable renewable development. NTEC, though, has doubled down on coal, buying three struggling coal mines in the Powder River Basin as well as a 7% stake in the Four Corners plant from main owner and operator Arizona Public Service Co.

APS plans to close the plant in 2031. As mine owner, NTEC wants to keep the plant and the mine operating, hence its interest in acquiring PNM’s plant stake. PNM would actually pay NTEC $75 million to get out of its coal contract, and the stake in the coal plant would be on the house.

According to filings, PNM’s exit from all coal resources by the end of 2024 is a condition of the buyout. But if it means selling to an entity that intends to keep the coal burning and polluting for longer, that’s a problem.

The Avangrid-PNM merger also has big potential implications for rates and community reinvestment. In its filing at the Public Regulation Commission, Avangrid offered a $25 million credit for ratepayers over three years and a meager $2.5 million for community investment. Sierra Club has intervened in the case to advocate for a better deal for New Mexicans and the communities that have contributed and sacrificed for PNM profits for decades.