Retirements of San Juan coal units will not affect transmission availability

Plans to retire two coal-fired generating units at the San Juan Generating Station 15 miles west of Farmington, N.M., to comply with federal environmental rules will have no appreciable affect on the transmission system serving the Four Corners area, a spokesperson for Public Service New Mexico (PNM) told TransmissionHub Sept. 10.

“One of the proposals that we’re anticipating is that we would build some of our replacement generation in the same area, partly because of the infrastructure that exists up there,” the spokesperson said. “The bulk of the replacement strategies that we’re looking at would take advantage of existing transmission infrastructure.”

Following a public hearing, the New Mexico Environmental Improvement Board unanimously approved a proposal from the state Environment Department that would lead to the retirement of Units 2 and 3 by the end of 2017. Unit 2 has a generating capacity of 340 MW and Unit 3 a capacity of 496 MW, the spokesperson said. Nine entities share ownership of the plant, and PNM’s share of the generating output is 340 MW.

While the plant’s output will be reduced by some 836 MW, the reduction in generation and the resulting increase in transmission capacity will be temporary.

“We have committed to building a 150 to 200 MW natural gas plant in the Four Corners area,” the spokesperson said. “Our replacement power strategies are [also] looking at [other] options that will use the existing transmission infrastructure, so we don’t anticipate any transmission impact.”

Those options include a possible change in the way the utility uses its portion of the output from Unit 3 at the Palo Verde Nuclear Generating Station west of Phoenix, Ariz. While that is currently a wholesale plant, the utility is considering bringing that plant into its rate base.

“It’s an existing facility we own, it’s low-emission, and the transmission infrastructure is already there, so [that is among] the options we’re modeling,” the spokesperson said.

PNM’s integrated resource planning process is currently underway and, as part of that process, the utility will be finalizing its replacement power strategy, which it anticipates filing with the New Mexico Public Regulation Commission in December.

PNM is a subsidiary of PNM Resources (NYSE: PNM).