The plan for future energy development released last week by Public Service Company of New Mexico—better known as PNM—is packed with figures and statistics.
One statistic that doesn’t appear in the report: More than 16 percent of children in Farmington Municipal School District, located 15 miles from the San Juan Generating Station coal plant that produces most of PNM’s electricity, have asthma or a related illness, according to Cathy McDonald, the district’s nursing coordinator. (The national average is 9.6 percent, according to a 2009 report by the Centers for Disease Control and Prevention.) Northwestern New Mexico also has the second-most cases of children hospitalized with asthmatic symptoms statewide, according to the New Mexico Department of Health.
Fortunately for the children of the Four Corners region, PNM has a controlling interest in only one of the two coal plants in the area. The nearby Four Corners Power Plant is owned and operated by Arizona Public Service utility company, which decided late last year to shut down three of the plant’s five operating units.
In a press release, APS states that the shutdown would save rate payers about $500 million by avoiding costly environmental retrofits on the nearly 50-year-old coal units in addition to reducing particulate emissions—shown by the Natural Resources Defense Council to cause asthma—by 43 percent. Yet PNM, whose plant is only five miles away from APS’, states in its new Integrated Resource Plan that its least-cost option is to keep its coal plant puffing away.
Mariel Nanasi, executive director of New Energy Economy, says retrofitting is more cost-effective because it allows PNM to pass costs along to ratepayers. Although as of press time the state Public Regulation Commission had not made a final ruling on PNM’s request for a significant rate increase, the hearing examiner in the case recommended approval, and the PRC general counsel further recommended an extra temporary rate increase to allow PNM to recover additional retrofitting costs.
This, according to Western Resource Advocates Chief Counsel Steve Michel, underscores the difference between PNM and APS: that while PNM digs in its heels with coal, APS is working with environmental regulators to move into the future.
According to a December 2010 study by financial consultant The Brattle Group, 64-76 percent of coal plants in the San Juan plant’s category will be retired by 2020 because of escalating environmental regulations. A September 2010 Credit Suisse case study also found that some energy companies could increase their earnings by 40 percent over four years by retiring some coal plant units.
“If [PNM] had done the analyses right, they would have seen that the best economics for New Mexicans would be to retire some or all of the [San Juan units] instead of continuing to pour money into keeping them going,” William Steinhurst, a senior consultant at Synapse Energy Economics and an expert witness in the PNM rate case, says.
APS spokesman Damon Gross says APS isn’t laying off a single employee; decommissioning the three units will continue to provide work for a period, and some employees will move to other departments. Anna Rondon, New Energy Economy’s Gallup-based tribal outreach director, says the Four Corners community backs a shift to sustainable energy.
“We think a path similar to what APS is following is probably what PNM should be looking at…they should be looking at exit strategies for that power plant,” Michel says. “And the [Integrated Resource Plan] indicates that they are not, and that’s a problem.”
PNM won’t produce a new Integrated Resource Plan until 2014, which to McDonald means three more years of hooking asthmatic kids up via oxygen mask to a special machine called a nebulizer when even an inhaler can’t help them breathe.
Nanasi notes that, in spite of the obvious parallels, PNM hasn’t tried to differentiate its situation with the San Juan plant from APS’ with the Four Corners plant, nor to explain why APS’ decision to close part of the Four Corners plant “would not lead to similar conclusions for shuttering some of the four SJGS units immediately, with a phase-out plan for the rest.”
But as long as the PRC lets PNM send New Mexicans the bill for its retrograde policies, Nanasi says, “It’s only the outrage of the people that’s going to stop this coal plant.”