This year’s planned closure of a New Mexico coal-fired power plant is expected to save money for the state’s utility company and its customers, but consumer advocates worry customers won’t see those savings for up to two years.
Public Service Co. of New Mexico will close two units at the San Juan Generating Station by September, but it wants to hold off on distributing customer savings from the closure, perhaps until 2024.
Pat O’Connell, senior analyst for clean-energy policy with Western Resource Advocate, said that isn’t what was initially negotiated, and savings delayed are savings denied.
“How often is it better for you to have a savings a year-and-a-half from now, compared to having it tomorrow? That’s just not how life works,” he said. “So the concept that it’s good from a customer point of view is dubious, to be generous.”
Western Resource Advocates is one of three groups that filed a legal motion with the New Mexico Public Regulation Commission to enforce earlier financing provisions agreed to by PNM. O’Connell said withheld savings to typical residential electricity customers would be about $7 per month, costing the utility company about $8 million to $9 million per month.
O’Connell said he believes PNM wants to delay issuance of bonds to refinance its San Juan plant in order to recover lost investments and satisfy shareholders, not its millions of customers.
“And this is at a time where cost of everything else is going up, right? So, you could have a situation where not only are you getting cleaner electricity, your electric bill could be going down,” he said.
He believes the PRC should require the utility company to start crediting customers for what they should be saving when the plant closes, and not wait until the yet-to-be-filed next general rate case concludes, likely in January 2024 – or 18 months after the first unit at San Juan closes.
“The way PNM has timed things, they’re going to make it appear that this clean-energy transition costs money,” he said. “But PNM moving beyond San Juan and replacing it with clean-energy resources does save you money.”
New Mexico’s Energy Transition Act requires local utilities to convert from fossil fuels to 100% carbon-free generation by 2045. It’s unclear how soon the PRC will decide the case.
