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Groups challenge utility plan to dump New Mexico power plant

January 29, 2021 GMT
FILE - In this April 2006, file photo, is the Four Corners Power Plant in Waterflow, N.M., near the San Juan River in northwestern New Mexico. The Navajo Nation would expand its investment in coal-fired electricity generation as part of a plan announced Monday, Nov. 2, 2020, to acquire more shares in one of the Southwest's last remaining coal power plants. The Navajo Transitional Energy Co. has negotiated an agreement in which Public Service Co. of New Mexico would divest from the Four Corners Power Plant in 2024 with the tribal company taking over PNM's 13% share. (AP Photo/Susan Montoya Bryan, File)
FILE - In this April 2006, file photo, is the Four Corners Power Plant in Waterflow, N.M., near the San Juan River in northwestern New Mexico. The Navajo Nation would expand its investment in coal-fired electricity generation as part of a plan announced Monday, Nov. 2, 2020, to acquire more shares in one of the Southwest's last remaining coal power plants. The Navajo Transitional Energy Co. has negotiated an agreement in which Public Service Co. of New Mexico would divest from the Four Corners Power Plant in 2024 with the tribal company taking over PNM's 13% share. (AP Photo/Susan Montoya Bryan, File)
FILE - In this April 2006, file photo, is the Four Corners Power Plant in Waterflow, N.M., near the San Juan River in northwestern New Mexico. The Navajo Nation would expand its investment in coal-fired electricity generation as part of a plan announced Monday, Nov. 2, 2020, to acquire more shares in one of the Southwest's last remaining coal power plants. The Navajo Transitional Energy Co. has negotiated an agreement in which Public Service Co. of New Mexico would divest from the Four Corners Power Plant in 2024 with the tribal company taking over PNM's 13% share. (AP Photo/Susan Montoya Bryan, File)
FILE - In this April 2006, file photo, is the Four Corners Power Plant in Waterflow, N.M., near the San Juan River in northwestern New Mexico. The Navajo Nation would expand its investment in coal-fired electricity generation as part of a plan announced Monday, Nov. 2, 2020, to acquire more shares in one of the Southwest's last remaining coal power plants. The Navajo Transitional Energy Co. has negotiated an agreement in which Public Service Co. of New Mexico would divest from the Four Corners Power Plant in 2024 with the tribal company taking over PNM's 13% share. (AP Photo/Susan Montoya Bryan, File)
FILE - In this April 2006, file photo, is the Four Corners Power Plant in Waterflow, N.M., near the San Juan River in northwestern New Mexico. The Navajo Nation would expand its investment in coal-fired electricity generation as part of a plan announced Monday, Nov. 2, 2020, to acquire more shares in one of the Southwest's last remaining coal power plants. The Navajo Transitional Energy Co. has negotiated an agreement in which Public Service Co. of New Mexico would divest from the Four Corners Power Plant in 2024 with the tribal company taking over PNM's 13% share. (AP Photo/Susan Montoya Bryan, File)

ALBUQUERQUE, N.M. (AP) — Environmentalists are challenging an effort by New Mexico’s largest electric provider to abandon its interest in a coal-fired power plant that provides power to customers in New Mexico and Arizona, arguing that the plan would violate New Mexico’s landmark energy law.

In a filing Thursday with state regulators, New Energy Economy and Citizens for Fair Rates and the Environment argue that the statute prohibits fossil fuel-fired plants from being reassigned or sold as a means of complying with renewable energy standards.

They also say Public Service Co. of New Mexico’s application for abandonment of the Four Corners Power Plant is incomplete because it doesn’t give notice or provide testimony about whether a proposed sale of PNM’s share to the Navajo Transitional Energy Co. would result in a net public benefit.

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The two groups along with other environmentalists contend that the early exit plan has no real environmental benefits since the tribal company and other co-owners — including Arizona Public Service — would continue operating Four Corners through 2031.

Public Service Co. of New Mexico’s abandonment request also seeks to recover $300 million it has invested in Four Corners using low-cost bonds that would be paid off by utility customers.

Mariel Nanasi, executive director of New Energy Economy, said the Energy Transition Act’s greatest selling point was to shift the state from fossil fuels to renewable energy.

She described it as audacious that the utility is proposing to push off its coal assets on the tribe and asking customers to pay for their bad business decisions.

“PNM is not actually abandoning coal, as in closing it. PNM is selling its coal to burn and burning New Mexicans in the process,” Nanasi said.

The utility has argued that using low-cost bonds to recover its investments and replacing the coal with cheaper renewable generation could save customers anywhere from $30 million to $300 million over time compared to remaining in Four Corners until 2031. The amount saved would depend on the costs of whatever replacement power is ultimately approved by state regulators.

Environmentalists also argue that the state Public Regulation Commission has the authority to determine whether PNM’s requests to recover its investments as part of abandonment proceedings are prudent. The question was part of a series of earlier legal challenges over the Energy Transition Act. Some state lawmakers have proposed amending the act to clarify that authority.