San Juan 1 and 4 0709

The San Juan Generating Station, with Units 1 and 4 operating.

A cooling tower at a New Mexico coal plant destined to close in less than a year collapsed June 30, straining power supplies in the region and adding unexpected expenses for its utility owners, who say they will repair the unit and bring the plant back on line.

“Normally, we don’t comment on ongoing operational issues; however, we feel it is important to provide an accurate statement due to some apparent misinformation,” Public Service Company of New Mexico said July 8 in an emailed statement. “On June 30th, an incident occurred at the San Juan generating station where a cooling tower collapsed. There were no injuries, and the cause of the collapse is under review. PNM has adequate resources to handle electric customer needs. PNM has updated [New Mexico Public Regulation Commission] staff and is working diligently to bring the unit back online.”

Local media on July 6 reported that both Unit 1 and Unit 4 at the 847-MW plant appeared to be non-operational, and cited sources who said the Unit 1 cooling tower at the plant had collapsed June 30. Units 2 and 3 were retired in 2017 as part of a settlement with the U.S. Environmental Protection Agency to comply with provisions of the Clean Air Act. Unit 1 is jointly owned by PNM and Tucson Electric Power, each of which receives 170 MW from the unit. Unit 4 has several owners, including PNM and public power agencies in New Mexico and Utah. Neither PNM nor TEP had further comment on the June 30 collapse.

PNM is anticipating proceedings at the NMPRC regarding its proposed merger with Avangrid, the U.S. utility arm of Spanish multinational Iberdrola, based in Madrid. The companies expect a decision from the commission in October; all other relevant state and federal agencies have given approval for the merger to go forward [20-20222-UT] (see CEM No. 1643).

Parties intervening in the merger, including New Mexico Attorney General Hector Balderas, in April signed on to a stipulation to the original merger plan that would bring nearly $300 million in additional benefits to the state through investments in economic development, low-income energy-efficiency benefits, and environmental enhancements that include a commitment from PNM to reach zero carbon emissions by 2035 (see CEM No. 1638).

Parties in support of the stipulation, including environmental and labor organizations and local governments, filed testimony in June, but some stakeholders have raised concerns about PNM’s plans to relinquish its 13-percent share in the 1,636-MW coal-fired Four Corners Power Plant to the tribally owned Navajo Transitional Energy Company prior to the merger [21-000017-UT].

Jeremy Fisher, senior strategy and technical advisor for the Sierra Club, in testimony filed June 18 said the organization does not support the stipulation because it calls for the commission to approve the merger between PNM and Avangrid without mitigating any adverse impacts of an agreement between the companies that PNM would exit Four Corners by the end of 2024. PNM’s ownership stake in the plant, operated by Arizona Public Service just 15 miles west of San Juan, would at that point be transferred to NTEC as a condition of PNM’s exit from a coal contract with NTEC that runs through 2031, the date of Four Corners’ anticipated closure. The PNM-NTEC agreement affects the potential for earlier closure of the plant, Fisher said in his testimony.

Fisher said Sierra Club recognizes that other components of the stipulation could “further environmental and equity interests” and that it is preferable to the original merger plan. Sierra Club is neither supporting nor opposing the stipulation, but prefers that the commission address issues raised in the testimony, particularly as they regard Four Corners and the PNM-NTEC agreement.

New Energy Economy has filed multiple objections to the merger, including some regarding PNM’s Four Corners exit. The group also alleges that PNM and Avangrid have not been forthcoming about controversies surrounding Avangrid’s utility operations in Maine and penalties imposed on the company by the Federal Energy Regulatory Commission.

NMPRC Hearing Examiner Ashley Schannauer on July 1 and July 6 issued orders denying PNM and Avangrid’s request for confidentiality on matters raised in NEE filings. He ordered the companies to file an unredacted version of a previously confidential exhibit.

Testimony opposing the stipulation is due July 16, and hearings on the merger are set to run from Aug. 8 to Aug. 20.

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Associate Editor - California Energy Markets

Abigail Sawyer grew up in northwestern New Mexico near two massive coal-fired power plants. She spent many hours gazing out the car window at transmission lines on family road trips across the Southwest and now reports on the region from San Francisco.