Albuquerque N.M. (Nov. 2, 2020) /PRNewswire/ — PNM, the wholly owned New Mexico utility subsidiary of PNM Resources (NYSE: PNM), today announces that it has reached an agreement to facilitate its exit from the Four Corners Power Plant in 2024, seven years earlier than planned.
PNM solidified its plans to fully exit coal under the agreement with the assignments of its rights under its coal supply agreement and the transfer of its 200-megawatt capacity ownership in the Four Corners Power Plant to the Navajo Transitional Energy Corporation (NTEC) at the end of 2024. The contracts were previously set to expire in 2031. Under the agreement, PNM will make a $75 million payment for relief from its obligations under the coal supply agreement with NTEC. This payment provides for significant cost savings and defines the path for PNM to achieve its plans to exit coal.
PNM plans to file with the New Mexico Public Regulation Commission (NMPRC) in early 2021 for abandonment and securitization of unrecovered investment in the plant. The early exit plans call for significant cost benefits to customers and economic development funds to support the Navajo Nation. A separate, subsequent filing with the NMPRC is expected to be made with a proposal for replacement power following a competitive RFP process that balances environmental benefits, location, cost and reliability.
“This is a major step in our vision to create a clean and bright energy future and achieve our industry-leading goal of emissions-free energy by 2040,” said Pat Vincent-Collawn, PNM Resources’ chairman, president and CEO. “Our accelerated exit means earlier savings on PNM customer bills and timely financial support for the Navajo Nation while it continues to navigate its transition to a renewable energy economy. As we manage the challenges of today and focus on solutions for the clean energy future, we continue to do what’s right for our customers and communities.”
PNM currently has a 13 percent ownership stake in Units 4 and 5 of the 1,540-megawatt Four Corners Power 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. The retirement of the coal-fired San Juan Generating Station in mid-2022 was approved earlier this year.