Dive Brief:
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Regulators will take additional time to examine Public Service of New Mexico's proposal to take on more coal-fired capacity at the San Juan facility, citing concerns over the replacement power's cost and the structure of the agreement.
- While environmental groups want the utility to move away from coal-fired power, Argus reports the New Mexico Public Regulation Commission's reason for the delay appears to be concerns over fuel supply contracts and ownership agreements.
- PNM will lose some capacity when two of the San Juan units retire in a couple of years, it has proposed acquiring additional capacity from the plant's fourth unit.
Dive Insight:
PNM's plan to acquire more than 130 MW at the San Juan station is under close scrutiny from regulators who appear to fear the utility will not be able to restructure the ownership agreement in a timely way. According to Argus, the commission appears to want binding capacity and fuel contracts in place before they vote on the matter.
PNM responded, telling Argus "the ownership restructuring and coal supply agreements would further increase the cost benefit to customers."
Last month a hearing examiner determined PNM's proposal to replace generation from San Juan with a mix of nuclear, gas and more coal, is not in the public's best interest. Support for PNM's proposal has been flagging, with several groups withdrawing from a previous agrement to scale down the plant's generation after a related power deal was canceled, potentially raising costs.
Regulators had given the utility until May 1 to finalize the deal, but PNM said it will require more time, possibly through the end of August.