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NM House passes 50% renewables standard, coal plant shutdown financing

Following the New Mexico state Senate's passage of a bill to increase the state's renewable portfolio standard from 20% to 50% by 2030, the state House of Representatives on March 12 also approved the bill, which Gov. Michelle Lujan Grisham is expected to sign into law.

The House passed Senate Bill 489 by a vote of 43 to 22. The measure also allows PNM Resources Inc. subsidiary Public Service Co. of New Mexico to securitize the costs of closing the San Juan coal-fired plant, which PNM plans to shut down in 2022. The House passed the Senate's amended version without change after turning back several amendments by one opponent.

The RPS increase was uncontroversial, but several House members fought vigorously against the provisions for closing the San Juan plant.

Rep. Rod Montoya, R-Farmington, unsuccessfully sought to amend the bill to postpone the closing for five years. Montoya argued that the closing of the plant and an associated coal mine will cost more than 1,000 direct and indirect jobs in his San Juan County district.

"We've been locked out of this process from beginning to end," Montoya said.

Rep. Nathan Small, D-Las Cruces, who carried the bill in the House, said the measure will allow PNM to securitize $403 million and that PNM's ratepayers will pay off the bonds over 25 years. Ratepayers will also see "hundreds of millions" in savings compared to higher rates they would pay if the uneconomic plant remained open, said Small.

The 89-page bill will provide millions of dollars in transition funding to the affected communities, pointed out Rep. Brian Egolf, D-Santa Fe. It will also provide up to 450 MW of replacement generation resources in the area where the plant is located, near Farmington, N.M.