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New Mexico Regulators Chart Course for Coal Plant Closure

New Mexico regulators have outlined how they will handle a major utility case that marks the beginning of the end for coal-fired electricity generation in the Four Corners region.

The state’s largest utility, Public Service Company of New Mexico, recently submitted its application for closing the San Juan Generating Station. The filing includes a mechanism for financing the closure and providing benefits and training to the workers who will be displaced.

It also outlines options for replacing the lost power. All the elements hinge on New Mexico’s new energy transition law. The Public Regulation Commission during its meeting Wednesday voted to split the proceeding into two parts: one for the closure and financing and the other for the replacement power.

Commissioners and staff say they expect numerous legal issues to be raised as the effects of any decision will be felt for decades by the state and the utility’s customers. They opted for extending the timelines for considering the proposals. It could take about nine months before a final ruling is issued related to the closure and financing and several months more to settle on which mix of solar, natural gas or battery storage will be tapped for generation going forward.

Environmentalists say tens of millions of dollars in severance pay and job training funds for power plant and mine workers could be compromised if the energy law is ignored. Utility spokesman Ray Sandoval said PNM is confident that the provisions of the new law apply to the filing.

PNM plans to shutter the plant in 2022 as part of its plans to drop coal-fired generation. As regulatory and market pressures have pushed many utilities across the U.S. to move away from fossil fuels, PNM also has set a goal of being emissions-free by 2040.

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