New Mexico Legislation Charts Path Away From Coal, But It Won't Be Easy

The Energy Transition Act passed the New Mexico state House on March 12 and heads to Gov. Michelle Lujan Grisham, the state's new Democratic governor who supports clean energy, but losing a coal plant early causes far-reaching economic impacts.

2 minute read

March 19, 2019, 1:00 PM PDT

By Irvin Dawid

New mexico Power

The San Juan Generating Station viewed from the air in 2012. | Doc Searls / Flickr

"The Legislature has moved to Gov. Michelle Lujan Grisham’s desk a controversial bill designed to dramatically increase the amount of renewable energy used to produce electricity in New Mexico while also helping the Public Service Company of New Mexico (PNM) recoup its investments in the coal-burning San Juan Generating Station near Farmingtonreports Steve Terrell of the Santa Fe New Mexican. PNM is the state's largest utility. 

Following a three-hour debate Tuesday, the House passed Senate Bill 489 by a margin of 43-22. It was a mostly party-line vote, with almost all Democrats in favor of the bill and almost all Republicans voting against it. The measure goes now to Lujan Grisham, who has enthusiastically supported it.

The bill calls for a 50 percent renewable energy portfolio standard in the state by 2030, with a goal of 80 percent by 2040. [It also requires 100 percent carbon-free energy by 2045 for investor-owned utilities, per governor's office].

Closing the San Juan Generating Station, which has been identified as New Mexico’s single largest polluter, in 2022, about 20 years before the end of its useful life, will have a severe economic impact on San Juan County, reported Hannah Grover for the Farmington Daily Times on Sept. 25, 2018.

The impact of the closure will come from lost taxes, lost jobs and lost investment in the power plant. 

A study commissioned by Four Corners Economic Development estimates closing the San Juan Generating Station and the accompanying San Juan Mine, which supplies all the station's coal will lead to more than $105 million in lost wages in San Juan County and nearly 1,500 lost jobs

"The bill would set up a $20 million fund to aid displaced workers and mandates any energy sources that replace the San Juan plant’s output be located in the Central Consolidated School District, which covers about 3,000 square miles," adds Terrell. The school district was identified as a big loser in tax revenue when the plant closes.

After the bill passed the Senate on March 6 on a bi-partisan vote, unlike the House, the governor stated, "With this legislation, our priorities are planted front and center, and, crucially, we do not leave our neighbors in San Juan County behind.” 

Western Resource Advocates, representing environmental, labor, and community groups, celebrated the passage of the landmark legislation. In addition to boosting renewable energy production, they noted it would "create jobs, reduce carbon pollution, and diversify the economy in coal-impacted areas."

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