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Fight over energy law heads to New Mexico Supreme Court

August 30, 2019
FILE - This Nov. 9, 2009, file photo shows the coal-fired San Juan Generating Station near Farmington, N.M. New Mexico's new landmark energy law is facing its first legal challenge as a coalition of environmental and consumer advocacy groups filed a petition Monday, Aug. 26, 2019, with the state Supreme Court over concerns that certain provisions are unconstitutional. (AP Photo/Susan Montoya Bryan, File)
FILE - This Nov. 9, 2009, file photo shows the coal-fired San Juan Generating Station near Farmington, N.M. New Mexico's new landmark energy law is facing its first legal challenge as a coalition of environmental and consumer advocacy groups filed a petition Monday, Aug. 26, 2019, with the state Supreme Court over concerns that certain provisions are unconstitutional. (AP Photo/Susan Montoya Bryan, File)

ALBUQUERQUE, N.M. (AP) — Environmentalists and the state’s largest electric utility are asking the New Mexico Supreme Court to settle a dispute over whether the state’s new energy law must be considered as regulators deliberate the planned closure of a coal-fired power plant.

The groups petitioned the court late Thursday to force the Public Regulation Commission to take into account the Energy Transition Act as part of the proceedings over shuttering the San Juan Generating Station.

Aside from mandating more renewable energy, the measure includes a financing mechanism that supporters say is necessary for the plant’s closure in 2022.

The law allows Public Service Co. of New Mexico and other owners of San Juan to recover investments by selling bonds that will be paid off by utility customers. The bonds will fund decommissioning costs, severance packages for displaced workers and job training programs.

Public Service Co. of New Mexico earlier this year submitted its application for closing the San Juan plant. It covered closure as well as proposals for replacing the lost capacity when the power plant shuts down.

Regulators opted to consider a portion of PNM’s application as part of an ongoing case that involved abandonment of the plant, raising questions as to whether the new law would be applied to the decision-making process since it took effect after that case began.

The petition accuses the commission of using procedural maneuvers to undermine the new law and the Legislature’s role in setting energy policy.

The commissioners “are violating the separation of powers among the branches of government,” the petition states.

It’s unclear how soon the Supreme Court could make a decision on the emergency petition.

PNM was joined in filing the petition by Western Resource Advocates, Coalition for Clean Affordable Energy, Sierra Club, Dine Care, San Juan Citizens Alliance and a union group.

The petitioners say the issues are of “great public importance,” arguing that the parties involved in the decommissioning proceedings can’t adequately prepare their cases given the uncertainty over how regulators will apply the law.

They also argue regulatory certainty is needed to ensure the bonds related to the closure and proposed economic development programs can be marketed.

Another coalition of environmental and consumer advocacy groups also has filed a complaint with the court, alleging that parts of the energy law are unconstitutional and compromise the ability of the commission to review utility proposals and balance the interests of shareholders and customers.

The court has yet to say whether it will take up that matter.

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