New Mexico Regulators Delay Decision on Solar Projects Planned to Replace Coal-Fired Capacity

The New Mexico Public Regulation Commission on April 29 put off a decision on the Public Service Company of New Mexico’s plan for two solar-plus-battery projects to partially replace the generation from the San Juan Generating Station scheduled for retirement by 2022.

In a March 27 recommended decision, hearing examiners suggested that the commission approve the Arroyo Project, which includes 300 megawatts of solar and 40 megawatts of battery storage in McKinley County, and the Jicarilla Project comprising 50 megawatts of solar and 20 megawatts of storage on the Jicarilla Apache Nation.

However, the commission voted to defer action, saying the issues presented are best resolved if the rest of the possible replacement options are also considered. Regulators said this would permit the hearing examiners to fully develop the remaining issues, allowing for a single dispositive ruling on all issues without impairing full consideration of the arguments that have been raised in the proceeding.

On April 1, the commission approved the PNM Resources subsidiary’s request to abandon the San Juan Generating Station and use securitization bonds through the Energy Transition Act to finance its remaining investment in the plant. The legislation, which took effect in June 2019, requires the state’s utilities to derive at least 50 percent of their electricity from renewable sources like solar and wind by 2030 and 80 percent by 2040 while the remaining share would come from zero-carbon sources by 2045. The law also includes provisions to issue energy transition bonds for the retirement and workforce training and transition assistance to affected communities.

PNM’s integrated resource plan calls for retirement of the utility’s remaining units at the San Juan Generating Station by 2022 and withdrawal from the Four Corners coal plant when its contracts with that facility end in 2031. To replace the retiring coal capacity, the plan includes solar and wind energy additions, along with the potential for energy storage capacity. The plan would retain the utility’s stake in the Palo Verde nuclear plant.