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Despite more groups withdrawing support, PNM preparing for partial shutdown of power plant

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ALBUQUERQUE, New Mexico — Despite some loss of support, the Public Service Co. of New Mexico said this week it's certain the state will back a plan to shut down half of the coal-fried San Juan Generating Station near Farmington.

The utility as well as groups who oppose the plan have been preparing briefs for a hearing examiner before a final round of counter-briefs later this month. In three weeks of public hearings that ended Jan. 27, several parties have dropped their support.

PNM Vice President for Regulatory Affairs Gerard Ortiz said the utility's plan to reduce coal production in the Four Corners is the most economical option for customers. "My bottom line after the hearings is that our story held up," Ortiz said. "If you look at the facts and step away from the rhetoric, retiring two of San Juan's four units is still the best option."

Several groups, including most recently the Albuquerque Bernalillo County Water Utility Authority, have come out against the plan citing the cost, the Albuquerque Journal reported (http://bit.ly/1ACLEKn ). Other parties who now oppose it include Western Resource Advocates, Energy Industries Association and New Mexico Independent Power Producers.

The plan would replace lost electricity from coal with a mix of nuclear, natural gas and solar power. According to PNM, customers would be asked in 2018 to help cover the $500 million cost of closing two generators, putting in pollution controls on the other two and getting replacement power. The plan could raise the average ratepayer's monthly bill by 7 percent or about $5.25.

The state Public Regulation Commission will rule on the plan after getting a recommendation from the hearing examiner.

Previous supporting parties were rattled by miscalculations on fuel costs. PNM executives told regulators last month that the utility miscalculated projected costs for continuing to run San Juan. According to the executives, clerical errors in tabulating coal prices could add $367 million to ratepayers' costs over 20 years. According to PNM, that would not change the effect on the 2018 rate.

The Farmington Electric Utility System's decision against a planned purchase of additional power from the plant has left opponents skittish. PNM's parent company, PNM Resources, is now mulling whether to acquire additional power if some co-owners are exiting. As a result, PNM and its affiliates may be left absorbing an extra 200 megawatts of coal electricity while half the plant is shuttered.


Information from: Albuquerque Journal, http://www.abqjournal.com

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