PNM, the wholly-owned New Mexico utility subsidiary of PNM Resources (NYSE: PNM), has enhanced its plan to exit the coal-fired Four Corners Power Plant with additional plans for seasonal operations at the plant beginning in the fall of 2023.
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New plans among plant owners moves Four Corners Power Plant to seasonal operations beginning in the fall of 2023, reducing annual carbon emissions by 20% - 25%
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Continued plan for PNM to exit plant and transfer 13% ownership at the end of 2024 results in significant customer savings
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Environmental benefits provide additional support for abandonment and securitization filing
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Customer savings, community support and environmental benefits demonstrate comprehensive approach to Environmental, Social, Governance (ESG) Strategy
“The combination of these plans with our planned exit from Four Corners demonstrates the comprehensive approach within our ESG strategy to do what’s right for customers, employees, communities and the environment,” said Pat Vincent-Collawn, PNM Resources’ chairman, president and CEO. “Our accelerated exit from coal and utilization of securitization financing provides customer savings and financial support to communities, including the Navajo Nation, and now the plan for seasonal operations achieves environmental benefits while preserving the community’s jobs and royalty payments. I’m proud of our team who continued to collaborate with all of the parties to address the overall needs of each of the owners and achieve these additional benefits.”
In November 2020, PNM announced it had reached an agreement to transfer its 13 percent plant ownership to the Navajo Transitional Energy Corporation (NTEC) at the end of 2024, unlocking the potential for PNM to realize significant savings for its customers through the replacement of this capacity with cleaner energy resources. The exit agreement also allows PNM to fully exit coal in support of its industry-leading goal of emissions-free energy by 2040, five years ahead of the carbon-free mandate included in New Mexico’s Energy Transition Act.
Following the announcement, PNM continued to negotiate on the future operation of the plant with NTEC and the other plant owners to achieve the owners’ individual reliability needs and sustainability goals, in consideration with a just energy transition for the Navajo Nation. The collaborative solution for seasonal operations ensures the plant will be available to serve each owners’ customer needs during times of peak energy use while minimizing operations during periods of low demand. This approach results in an estimated annual 20 to 25 percent reduction in carbon emissions at the plant and retains jobs and royalty payments for the Navajo Nation.
The Four Corners Power Plant has been an important resource for reliable electricity for nearly 60 years, particularly for areas of high summer demand across the western United States. The installation of selective catalytic reduction (SCR) equipment at the plant in 2018 has reduced annual nitrogen oxide emissions by 88 percent. The plant is also a critical piece of the Navajo Nation economy.
PNM currently has a 13 percent ownership stake in the 1,540-megawatt plant. These 200 megawatts comprise less than 10 percent of PNM’s total energy portfolio and reflect the last of PNM’s remaining coal-fired generation capacity following the approved retirement of the coal-fired San Juan Generating Station in 2022.
PNM filed with the New Mexico Public Regulation Commission (NMPRC) in January 2021 for abandonment and securitization of its share of the Four Corners Power Plant. The Hearing Examiner in the case recently directed PNM to amend its filing with supplemental testimony by March 15, 2021. In its amended filing, PNM will include information pertaining to the new agreement for seasonal operations and its environmental benefits. In accordance with the Hearing Examiner’s order, the nine-month review period for the proceeding will be reset with the amended filing.
PNM’s regulatory proceeding for the abandonment and securitization of the Four Corners Power Plant is separate from the NMPRC docket for approval of PNM’s merger with Avangrid. PNM Resources continues to anticipate receiving all required federal and state approvals and closing the merger in the second half of 2021.
Additional materials pertaining to PNM’s filing for Four Corners abandonment are available at https://www.pnmresources.com/investors/rates-and-filings.aspx.
