The move is part of the company’s plan to move forward with the Revised State Implementation Plan (Revised SIP), which is the result of an agreement between the New Mexico Environment Department, the US Environmental Protection Agency and PNM.
Changes in the power supply pattern are expected to help the San Juan Generating Station (SJGS) to comply with federal visibility standards under the Clean Air Act.
PNM Resources’ chairman, president and CEO Pat Vincent-Collawn said the Revised SIP is the best way forward because it minimizes the cost impact to customers, creates broad and significant environmental benefits, and reduces exposure to the anticipated costs of complying with future federal regulations.
"In addition, PNM is able to further diversify its fuel portfolio and integrate cleaner resources, including more natural gas and solar," Vincent-Collawn added.
According to the company, the Revised SIP is expected to save over $780m over 20 years compared to the original federal implementation plan.
Under the changes PNM wishes to retire Units 2 and 3 at SJGS and recover about $205m in undepreciated costs over 20 years and has applied for a certificate of convenience and necessity (CCN) to include ownership of its 134MW of Palo Verde Nuclear Generating Station Unit 3 to offer power to New Mexico’s retail customers for $2,500 per kW.
The company also plans to allow cost recovery for the installation of SNCR equipment on SJGS Units 1 and 4, within the total estimated cost of $82m and get a CCN for an exchange of capacity out of SJGS Unit 3 and into SJGS Unit 4 that allows it to own a 78MW in Unit 4.
