PRC examiners include 100% renewables/storage as key replacement alternative for San Juan

For Immediate Release: June 24, 2020

Contact: Camilla Feibelman, camilla.feibelman@sierraclub.org, 505.715.8388

On Wednesday, Public Regulation Commission hearing examiners presented recommendations for replacing the retiring San Juan Generating Station, including 100% renewable energy and battery storage. 

The portfolio proposed by the Coalition for Clean and Affordable Energy (CCAE) locates 100% renewable energy and battery storage in the same school district as the San Juan plant, in addition to two large solar and battery projects in nearby McKinley and Rio Arriba counties.  The hearing examiners recommended this option as the best for compliance with the Energy Transition Act’s emphasis on investment in the community and lowest environmental impact. For solely emphasis on price, the examiners included another alternative with 80 MW less gas than PNM’s preferred alternative.  

“Polluting coal at San Juan can now be replaced with 100% renewable energy and battery storage, with $447 million of investment in the same school district as San Juan, restoring tax revenue as well. The hearing examiners have shown that PNM’s gas-heavy alternatives aren’t necessary. The Sierra Club urges the commission to adopt CCAE’s proposal for 100% renewable energy and storage to help lead the Four Corners and New Mexico into a clean-energy future,” said Camilla Feibelman of Sierra Club Rio Grande Chapter.

“PNM will have to retire any gas they build by 2040. It makes no sense to build new fossil fuels when there is a clear 100% renewable and battery alternative that so strongly benefits the school district,” Feibelman said.

Other key points from the recommended decision:

• CCAE’s proposal would provide 430 MW and $447 million of investments within the same school district.
• CCAE’s proposal would also provide 520 MW and more than $430 million of investment in McKinley and Jicarilla Apache of Rio Arriba County.
• Sierra Club proposals: The Sierra Club provided 100%-renewables-and-storage portfolios both bounded and unbounded by the school district and unequivocally recommended 100% renewable and battery proposals. Sierra Club also provided alternate portfolios with less gas than PNM’s preferred alternative to show that PNM’s higher-gas portfolios were not necessary for the lowest-cost option.  Although Sierra Club’s lower-gas portfolio is referenced in the recommended decision, it is not the Sierra Club’s preferred portfolio. 
• On Enchant: Hearing examiners recommend AGAINST a delay so Enchant can bid on replacement energy: “No witness suggested that PNM should acquire the CCS project or that PNM should purchase its replacement energy from it. No witness could even describe a purchase of (carbon-capture) energy that would satisfy PNM’s need. All witnesses testified that PNM needs flexible resources, not the base-load that CCSU would provide.”
• On Rates: The difference between CCAE’s proposal and PNM’s gas-heavy recommended proposal (Scenario 1) is about 56 cents per month for the average residential customer, and all the main alternatives in the recommended decision, including CCAE’s, would SAVE ratepayers $6-$7 per month compared to continuing to operate San Juan coal plant. 
• On suggestions to delay the case again for a new round of bidding: “The risks and uncertainties created with the delay outweigh the likelihood of the benefits. The prices and projects might actually be worse, and the delay might result in insufficient resources being available by the time PNM abandons Units 1 and 4. Moreover, there is insufficient time remaining in this docket to conduct any further RFPs to reach a final decision.”
• Hearing examiners reiterate that for resources within the Central Consolidated School District, the Energy Transition Act requires the commission to prefer resources with the least environmental impacts.
• Jobs: CCAE estimated that its proposal would provide more than 1,000 construction jobs, including at least 500 construction jobs for the Arroyo project and at least 500 construction jobs for the Jicarilla project alone. Hearing examiners quoted UNM economist Kelly O’Donnell, a witness for community groups including Diné CARE and San Juan Citizens Alliance. O’Donnell said coal-mine reclamation and plant decommissioning have the potential to improve environmental quality, increase property values, enhance business opportunities, and generate a substantial number of new, multi-year jobs in the process. She reasoned that reclamation, like solar-plant construction, can serve as a bridge between a resource-dependent community’s extractive past and a future based on a diverse set of new economies.
• O’Donnell said that instead of investing millions of dollars attempting to resuscitate the region’s coal industry, Northwest New Mexico should aggressively pursue an economic-development strategy that leverages local assets and prioritizes quality of life, with a focus on three key areas: tourism and recreation, solar power generation and storage, and mine reclamation/plant decommissioning.