- PNM, based in Albuquerque, New Mexico, has asked state regulators for permission to retire two units at the coal-fired San Juan power plant in northwestern New Mexico.
- PNM plans to replace the units by adding 177 MW of natural gas-fired generation, 40 MW of photovoltaic capacity, and 134 MW of utility-owned unregulated capacity at the Palo Verde nuclear plant.
- However, New Energy Economy, an advocacy group, is opposing PNM's plan to replace some of the lost capacity and energy with a natural gas-fired power plant. The group also opposes PNM's request to recover $205 million in costs from the units that have not been recovered yet in rates.
At issue is a compromise plan released in February that aims to reduce emissions that create regional haze from the 1,800-MW San Juan plant in northwestern New Mexico. A key element of the plan calls for retiring the 350-MW San Juan Unit 2 and the 544-MW Unit 3 by 2018. Although the Environmental Protection Agency participated in the talks that led to the plan, the federal agency must still approve the proposal.
Several Western coal-fired power plants have agreed to shutter units to meet regional haze requirements, leading to a pending reduction of coal-fired generation in the region. This will lead to opportunities for natural gas and renewable development.