The San Juan Generating Station, a coal-fired power plant, is one of the largest sources of air pollution in New Mexico and also impacts Arizona, Nevada, and Colorado. The plant releases over 13,000,000 tons of carbon dioxide a year and contributes to visibility-impairing haze, acid rain, and health issues in the region.

Since December 2013, Western Resource Advocates’ Legal Counsel, Steve Michel, has been working to reduce air pollution from the power plant. On August 13, Western Resource Advocates joined other parties in a legal settlement that paves the way for the state Public Regulation Commission to approve Public Service Company of New Mexico’s (PNM) plan to shut down two of the power plant’s four coal-fired generating units by December, 2017. The agreement also sets the stage for further unit closures in 2022, and positions PNM towards compliance with EPA’s Clean Power Plan that will address climate change by reducing emissions from coal-fired power plants

The agreement must still be reviewed in a public hearing before the Public Regulatory Commission but the settlement is great news. Absent the agreement, PNM would be on a path toward operating San Juan Generating Station for 40 years into the future – polluting our environment and precluding the evolution toward a cleaner resource mix.  If approved, this new settlement agreement will ensure PNM is offsetting the environmental impacts of its acquired coal capacity with renewable energy credits. The settlement also provides an opportunity to evaluate replacing all of San Juan with cleaner resources in the near future and that there is a genuine opportunity for further or complete closure of the remaining two units in 2022.

PNM, the New Mexico Attorney General, Commission Staff, and the Coalition for Clean Affordable Energy all worked incredibly hard to reconcile their differences and come up with a settlement that advances clean energy in New Mexico with minimal economic impacts.

Here are the highlights of the new settlement:

  • PNM must acquire enough wind or solar power that qualifies for credits or allowances under EPA’s Clean Power Plan, to offset the 197 megawatts of excess capacity being absorbed at San Juan. In a typical year this equates to 1.4 million megawatt-hours, which will require 400 megawatts of post-2012 renewables to produce. This is enough power to serve 200,000 homes.
  • In 2018, the PUC will undertake a comprehensive review of whether more or all of San Juan should be closed in 2022 when the current partnership among plant co-owners expires and PNM’s coal supply contract for the facility comes to an end.
  • At the same time, the PUC will evaluate the costs and benefits of replacing San Juan generation with renewable energy in New Mexico.
  • PNM commits it will not acquire any more coal capacity at San Juan or any other coal plant as an “owner of last resort” – which is a tool PNM has used to keep San Juan Generating Station operating even if the economics support closure.

For more on this issue visit our page on the San Juan Generating Station.