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Date: August 1, 2017
City of Farmington Announces It Will Initiate and Pursue Collaborative Efforts Toward Goal of Extending Life of San Juan Generating Station
Farmington, NM The City of Farmington (COF) announced today that it will not file a protest with the New Mexico Public Regulatory Commission (PRC) applicable to the Integrated Resource Plan (IRP) that was filed with the PRC by Public Service Company of New Mexico (PNM) on July 3, 2017. The IRP concludes that the Most Cost Effective Portfolio (MCEP) for the future operations of PNM includes the full retirement of San Juan Generating Station (SJGS) in 2022. Protests against the IRP must be filed by August 2.
Notwithstanding its decision against filing a formal protest, the COF, as an owner of SJGS and as a beneficiary of the many positive economic impacts created by the operation of SJGS and the associated mine, believes that it is in the best interests of the residents and citizens of Farmington, San Juan County, and the State of New Mexico that SJGS continue to operate beyond 2022. Foremost among those interests is the preservation of approximately 650 direct jobs connected to the plant and mine, as well as approximately 900 indirect jobs throughout the community that are supported by those direct jobs.
In addition, SJGS is an integral, cost-effective, and environmentally compliant component of the COF’s power resource mix, which allows the COF to provide electricity to its customers and ratepayers at the lowest rates in the region. The early retirement of SJGS would leave the COF with stranded costs associated with its ownership interests totaling an estimated $34 million, and power replacement costs totaling an estimated $97 million. The incursion of these costs would result in rate increases to the customers and ratepayers on the COF electric utility system. Furthermore, the early retirement of SJGS would have an estimated impact of approximately $170 million annually on San Juan County government, San Juan College, local public school districts, and State of New Mexico government in the form of lost tax revenue and the value of the economic benefits associated with the hundreds of direct and indirect jobs that would be lost.
The COF believes that the best opportunity for securing the continued operation of SJGS beyond 2022 is to work in good faith collaboration with other stakeholders for that result. Those stakeholders include the executive branch of State government, State legislators, Four Corners Economic Development Inc., and other co-owners of SJGS, including PNM.
In the event collaborative efforts do not result in the development of a road map for the continued operation of SJGS beyond 2022, then the COF will engage aggressively in the PRC abandonment hearing process – which must be initiated by PNM within the time period commencing July 1, 2018 and ending December 31, 2018 – in an effort to keep SJGS open and in operation. “We must fight for these jobs, for the men and women who hold them and their families, and for the economic and societal benefits they provide”, said Farmington Mayor Tommy Roberts. “At the same time, we must recognize that these jobs will not last forever and we must continue our preparation for that time of transition and transformation in our local, State, and regional economies.”