PNM’s proposal to withdraw from Four Corners coal plant challenged | Local News
Many environmental groups and other organizations say the New Mexico utility company should get out of the Four Corners power plant, which spits out pollution, but not in the way the utility proposes.
PNM’s deal to transfer its share of the coal-fired plant to Farmington-based Navajo Transitional Energy Co. is worse than the status quo, they say. They argue that customers and shareholders will foot the bill, additional expenses will be incurred to procure alternative energy and, after all of this, Four Corners will remain open and continue to pollute.
A PNM executive, on the other hand, calls it a great deal for all parties involved.
“I see it as a win-win-win-win-win for all parties,” said Tom Fallgren, PNM vice president. He generally described groups’ criticism of the deal as unfair or uninformed. He said one of the criticisms – that PNM agreed not to vote for closing the plant before leaving it at the end of 2024 – is “very standard contract language”.
It might be difficult to find more contrasting views than those of PNM and organizations that oppose the transfer of its stakes in the Four Corners power plant. The New Mexico Public Regulatory Commission is expected to review the proposal this summer.
Commission President Stephen Fischmann de Las Cruces said the case would be difficult to decide. “There is a long history and many unresolved issues, and quitting the Four Corners is a complicated business,” said Fischmann.
- PNM shareholders would pay $ 75 million to Navajo-owned NTEC to get the plant out of its hands. NTEC owns the nearby Navajo mine, which supplies coal to the mill and part of the mill itself. PNM spokesman Ray Sandoval said the $ 75 million would relieve PNM customers of Four Corners’ coal-related contractual obligations.
- PNM customers are already paying nearly $ 300 million in capital and economic development assistance related to the Four Corners plant.
- Critics fear that PNM could be absorbed by additional costs at the plant if an environmental hazard from the past is discovered.
- Some see a link between PNM’s transfer of the power plant and its proposed merger with Connecticut-based energy company Avangrid.
A Sierra Club technical advisor testified earlier last month that the PNM transfer of Four Corners shares was “motivated” by the merger proposal because Avangrid, which focuses on renewable energy sources, does not want to be involved in the coal plant. . But PNM’s proposed contract with NTEC and the merger with Avangrid will make it more difficult to shut down the plant, said Councilor Jeremy Fisher of Oakland, Calif.
Fisher said the plant was the state’s largest stationary source of greenhouse gas emissions.
PNM assured NTEC that he would stay at Four Corners until the end of 2024 and vote against the closure by then, he said, which would prevent other owners from closing Four Corners at the earliest. before 2027. A closure vote must be unanimous, he said, and there is a two-year delay after a closure decision is made.
But Sandoval said there was no proposal to close the plant before its scheduled shutdown in 2031, and executives at Arizona Public Service, the majority owner, said they had no plans to shut it down. before this date.
A spokeswoman for Avangrid wrote in an email that PNM had planned to sell its stake in Four Corners for financial and environmental reasons prior to the merger proposal.
“This plan was in line with Avangrid’s policy of not owning coal, and Avangrid therefore included a provision in its merger agreement to require PNM to follow through on its plan to sell its stake in Four Corners and seek the ‘Commission approval for such a sale,’ wrote.
The Four Corners transfer and merger proposal is a separate matter submitted to the Public Regulatory Commission.
Matt Gerhart, a senior Sierra Club lawyer, called the Four Corners proposal flawed and said it should be rejected by the PRC.
If the Sierra Club opposes a company’s plan to pull out of a coal-fired power plant, Gerhart said: “You are clearly doing something wrong.”
“We firmly believe that the deal with NTEC is a bad deal for taxpayers, for the environment and for the people who live in the shadow of the Four Corners factory,” said Denver-based Gerhart.
Stephanie Dzur, lawyer in Albuquerque for the Coalition of 11 Organizations for Clean and Affordable Energy, another opponent of the proposal, said it would be a bad engagement for PNM clients.
“PNM has the onus of proving that the transaction is in the public interest,” Dzur said, adding that the utility had not done so.
Questions about NTEC’s financial stability are not answered in PNM’s proposal, she said, which is “another reason why this is such an irresponsible way to get rid of this. coal-fired power station “. If an environmental disaster were discovered and NTEC turned out to be “a financial turnip,” she said, PNM could be financially retracted.
Dzur’s coalition represents organizations such as the Southwest Energy Efficiency Project, Environment New Mexico, the New Mexico Public Interest Research Group, and the Natural Resources Defense Council.
Another observer, the New Mexico attorney general’s office, also expressed opposition. A spokesperson for the office said in an email that PNM needs to “enhance its commitments to affected rural communities in its transition to clean energy.”
Fallgren said NTEC has financial guarantee obligations in the proposed contract and that it is “simply not correct” to suggest that NTEC may default on the deal. Also, he said, if an environmental crisis was caused by Four Corners after PNM exited, it wouldn’t land on PNM.
If such a problem was discovered in the future and started under PNM’s watch, then PNM would bear some responsibility, he added.
As for the $ 300 million to be covered by PNM customers, the utility says customers would actually save between $ 30 million and $ 100 million in this transaction. That’s because PNM would switch to cheaper renewable energy sources, Fallgren said.
In addition, he said, PNM would refinance the $ 300 million at a lower interest rate under the state’s energy transition law, with commission approval.
The $ 300 million mostly covers PNM’s capital expenditures at Four Corners, though there are also payments for worker support, Native American aid, and other economic development or assistance funds.
PNM owns 13 percent of the plant and NTEC 7 percent. Along with the Arizona Public Service, two other organizations are co-owners: Tucson Electric Power and Salt River Project.
Navajo Transitional Energy officials declined to comment on the proposal to take over PNM’s stake.
Fallgren said the deal with NTEC would preserve jobs at Four Corners, benefit the Navajo Nation, save PNM customers money, and allow PNM to transition to carbon-free power more quickly. He also praised the decision of factory owners to cut emissions by 20 to 25 percent by switching to seasonal operations in 2023.
“It’s a good deal for everyone,” he said.
Dzur, however, said PNM chose a strange way to offload the “old and dirty” Four Corners factory. “They want to turn the factory over to a coal company.”
And that, she said, is not in the public interest.