More than 40 organizations — including conservation, American Indian, religious and business groups — signed a letter earlier this year asking Attorney Balderas to withdraw his support for PNM's plans for the San Juan Generating Station
More than 40 organizations — including conservation, American Indian, religious and business groups — signed a letter earlier this year asking Attorney Balderas to withdraw his support for PNM's plans for the San Juan Generating Station
More than 40 organizations — including conservation, American Indian, religious and business groups — signed a letter earlier this year asking Attorney Balderas to withdraw his support for PNM's plans for the San Juan Generating Station
Attorney General Hector Balderas
P.O. Drawer 1508
Santa Fe, NM 87504-1508
CC: Cholla Khoury, Esquire
Dear Attorney General Balderas,
On February 15, 2013, Governor Susana Martinez, the Public Service Company of New
Mexico (PNM), and the Environmental Protection Agency (EPA) announced an
agreement to close two units at San Juan Generating Station in order to comply with
Regional Haze requirements. The Stipulation Agreement submitted to the Public
Regulation Commission (PRC) on October 1, 2014, in docket No. 13-00390-UT, includes
requests for approval of key elements of the PNM/EPA/NMED agreement (also known
as the “Revised State Implementation Plan”), but also requests certificates of convenience
and necessity for the purchase of 132 megawatts from remaining SIGS Unit 4 and 134
MWs of nuclear power at Palo Verde 3
‘On March 26, 2014, the Santa Fe City Council, after notice and hearing, adopted a
Resolution against PNM’s replacement power plan and request for stranded assets, and
called for an alternative based on renewables. After a similar process, the City of
Albuquerque also adopted a Resolution opposing PNM’s replacement power plan in June
of 2014,
We are writing to request that the Office of the Attorney General withdraw its support of
the Stipulated Agreement in PRC Case 13-00390-UT in response to int and
‘material uncertainties and risks to ratepayers that have emerged after the Stipulated
‘Agreement was negotiated including:
1) An increase of over 1 billion dollars in the cost of the Stipulated Agreement from
the time of the negotiated agreement to the present to the detriment of ratepayers.
The cost at the time of the negotiated agreement was $6,640,253,862 however
after errors in the cost modeling and fuel cost omissions were addressed, the
average and present value of the assets presented in the Stipulation Agreement
increased significantly to $7,588.515,567.
2) Evidence that the Stipulation DOES NOT provide the most cost-effective energy
resource portfolio, as required by 17.7.3.6 NMAC. In this regard, PNM originally
proposed its plan as “least cost” or “most cost-effective.” Based on the evidence
before the PRC, PNM'’s Stipulation is neither the least cost overall nor most cost
effective. There are at least four Strategist” scenarios run by PNM, which were
disclosed or run after the Stipulation was signed that are more cost-effective for
ratepayers that have less regulatory and financial risk, and have a superior
environmental (including water use) and health outcome when compared with the
Stipulation.
3) The recent revelation by the State of New Mexico that balanced draft
improvements are contained within PNM’s permit at PNM’s request and not dueto compliance issues. The cost (approximately $70 million assuming PNM’s
current ownership interest) and prudence of such balanced draft improvements
directly impact ratepayers and appear to be undecided and /or deferred to another
Commission ease,
4) The Remaining SIGS Unit 4 owners recent rejection of the SNCR project,
(including costs for balanced draft) for SIGS Unit 4.
5). The lack of a SJGS participation agreement, which, PNM has alleged since the
initial filing in this matter, that it intended to have in place in sufficient time for
the Commission's evaluation. The hearings have now concluded and no such
agreement has been reached.
6) On January 7, 2015 afier 18 months of study, the City of Farmington decided
against acquiring an additional 65 MWs in SJGS Unit 4 given “capaci
acquisition economics”, “uncertainty and likely unfavorable economics regarding
future fuel supply, uncertainty pertaining to operations and ownership structure
post-2022 and other evaluated liabilities unacceptable to the City” and continued
“unresolved issues including the already protracted negotiations and on-going
status of negotiations to the detriment of the City's ability to develop alternate
generation resource options”. The City of Farmington also cited plant reliability
as one of their reasons to not add the 65 MW: “significant degradation in SIGS
Unit 4 reliability performance.” Seventy-five percent reliability at SIGS means
that it is down for one quarter of every year and is not a dependable energy
resource,
7) PNM recently announced its intention to acquire the San Juan Unit 4 plant
rejected by the City of Farmington, thereby increasing its interest in San Juan Unit
4 from 132 MWs to 197 MWs. PNM informed its shareholders that the
acquisition would result in operating losses.
8) Uncertainty regarding both the source of supply and cost of coal, ineluding
uncertainty regarding mine ownership and coal quality.
Since January 20, 2015, three (3) other parties have also withdrawn their support for the
ipulation Agreement including the: Renewable Energy Industries Association of New
Mexico, New Mexico Independent Power Producers, and Western Resource Advocates.
The same considerations caused the Albuquerque Bernalillo County Water Utility
Authority to indicate its opposition to the Stipulation Agreement on January 27, 2015.
‘The Albuquerque City Council is in the middle of a bi-partisan effort to withdraw its
support of the Stipulation as well
The Attorney General's Office participated in the negotiated Stipulation Agreement
based on representations that the Stipulation Agreement represented the least cost plan to
rate payers. However, since the filing of the Stipulation Agreement, the costs and
economics of certain elements of the Agreement have changed significantly to the
detriment of New Mexican ratepayers presenting unnecessary and imprudent costs and
risks that New Mexican ratepayers cannot afford.
Therefore, we respectfully request that the New Mexico Attorney General withdraw itsupport for the Stipulation Agreement relating to the RSIP based on costs to ratepayers,
increasing risk considerations, and the availability of alternate generation resources that
are more economic and better for the public’s health and welfare.
‘Thank you for your consideration on behalf of New Mexicans.
Sincerely,
Fo Flin _
350.org—NM
Tom Solomon
202 Harvard Dr NE
Albuquerque, NM 87106
tasolomon6@gmail.com
505.350.6000
Earth Care
Bianca Sopoci-Bd{knap
6600 Valentine Way Building A
Santa Fe, NM 87507
Bianca@earthcarenm.org
505.983.6896
Santa Fe Green Chambgf“of Commerce
Glenn Schiffbauer
PO Box 2796
Santa Fe, NM 87504
glenn@nmgreenchamber.com
505.428.9123
a
inta Fe Home Bi
Kim Shanahan
1409 Luisa St, Suite A
Santa Fe, NM 87505
kim@sfahba.com
505.982.1774
lers Association