New Mexico regulators weigh transfer of power plant shares

ALBUQUERQUE, N.M. (AP) — It will be up New Mexico regulators to clear the way for the state’s largest electric provider to transfer its shares in one of the Southwest’s remaining coal-fired power plants to a Navajo energy company.

A hearing examiner with the Public Regulation Commission presented his recommendations to commissioners during a meeting Thursday, saying it would result in savings for Public Service Co. of New Mexico customers, reduce emissions from the utility’s portfolio and strengthen the Navajo Nation’s position when it comes to determining the future of the plant.

Environmentalists have been pushing for Four Corners to be shuttered and have criticized the proposed transfer, suggesting it would prevent an early closure.

Hearing examiner Anthony Medeiros told commissioners that adoption of the recommendation wouldn’t prevent an early closure but that there doesn’t seem to be any willingness by the plant’s majority owner — Arizona Public Service Co. — to end operations before 2031 since doing so would undermine the reliability of its network.

He said evidence gathered in the case shows the plant likely will continue operating at least for another decade whether PNM transfers its shares or not.

Under the proposal, Navajo Transitional Energy Co. would take over PNM’s interest in Four Corners, becoming the second largest owner of shares in the plant. PNM shareholders would pay NTEC $75 million to assume its obligations under a coal supply agreement.

Located on tribal land, the Four Corners Power Plant has been a huge economic driver for the Navajo Nation for decades. The plant and the neighboring mine that feeds it provide hundreds of jobs for tribal members and the operations account for nearly a quarter of the Navajo Nation’s annual general fund revenues.

The tribe already is feeling the economic sting from the closure of the Navajo Generating Station in northeastern Arizona and more will come next year with the closure of the San Juan Generating Station in northwestern New Mexico, which is just miles away from the Four Corners plant.

With a larger ownership share in Four Corners, supporters of the proposed transfer have said it would help the Navajo Nation as it makes the switch to more renewable energy generation over the coming years.

“The Navajo Nation has asked for a just transition,” Medeiros told commissioners, saying any economic development funds for the tribe and local communities required under New Mexico’s Energy Transition Act would be delayed by several years and other benefits squandered without the early transfer of shares.

PNM’s abandonment request seeks to recover $300 million it has invested in Four Corners using bonds that would be paid off by utility customers. Commissioners on Thursday raised questions about what costs the utility should be allowed to recover and how much authority regulators have to determine whether those costs are prudent.

The commission is expected to make a final decision later this month.