NEW MEXICO (KRQE) – After extended debate and a New Mexico Supreme Court Case over the closure of the San Juan Generating Station near Farmington, officials announced they’ve come to an agreement over the finances of the shutdown. New Mexico’s Attorney General’s Office spearheaded the settlement which is worth $115 million and will affect every Public Service Company of New Mexico (PNM) customer.
“I think it’s good for consumers, good for businesses, and it really comes right at a perfect time, there’s a lot of people in our community that are struggling to make those monthly housing payments, food payments, paying grocery bills, and anything I think we can do to ease that burden is I think important and it’s a big component of the proposed settlement,” said Raúl Torrez, New Mexico Attorney General.
The multi-million dollar customer payout is tied to PNM’s San Juan Generating Station. While the plant has been offline since September, customers have still been paying to operate it. If the settlement is approved, PNM customers are going to get some credits.
“PNM is going to issue $115 million in bill credits, and what that means to the average residential customer is a bill credit of $9.28 a month,” says PNM spokesperson Raymond Sandoval. “That will come directly out of PNM’s profits. . . Customers will not pay that.”
Those credits will be issued monthly for one year if the settlement is approved by the state’s Public Regulation Commission (PRC). “The first step is now to go back to the [New Mexico] Supreme Court and let them know that we’ve reached this unanimous settlement,” Sandoval says. “We’re hopeful that both the court will allow it to go back to the PRC, and we’re hopeful that the PRC will approve it.”
If the PRC does approve the settlement, customers could start seeing the first credits subtracted from their bills just 30 days after the PRC’s approval.
In the meantime, PNM still has not issued the Energy Transition Act bonds. Sandoval explains that PNM wants to issue the bonds when they re-adjust the electricity rates they charge customers.
“We filed for a rate change in December 2022. And those new rates are supposed to go into effect in January 2024. We’re going to time the issuance of those bonds with the new rates,” Sandoval says. “We don’t want to be charging customers for San Juan on their bill and at the same time asking them to pay back those bonds because that will be double dipping.”
For years, PNM has been working on shutting down the plant. New Mexico approved the Energy Transition Act to allow PNM to issue bonds to help finance that transition, estimated to cost over $360 million. But when PNM chose to delay issuing those bonds, they faced criticism, pushback, and legal challenges. In March New Mexico’s attorney general even stepped in to help resolve disputes.