Aug. 11, 2010
Citing Customer Impact, PNM Requests More Time to Consider Proposed New Emissions Controls in New Mexico
Albuquerque: PNM yesterday filed a motion with the N.M. Environmental Improvement Board asking for more time to consider and respond to a plan recently proposed by the N.M. Environment Department related to regional haze in national parks and federal wilderness areas. PNM is the largest utility subsidiary of PNM Resources (NYSE: PNM).
The proposed plan, which would affect only the coal-fired PNM San Juan Generating Station, would have significant negative cost impacts to PNM’s 500,000 electric customers, the company said in its filing. PNM estimates the controls would cost the average residential PNM customer about $90 per year for an estimated 20 years; costs for businesses would be higher.
PNM is requesting that the public hearing on the proposal now set for Oct. 4 be delayed until January 2011. The current schedule does not give the company adequate time to address the complicated issues raised in the proposal and fully evaluate the impacts on San Juan and customers it serves in several states. NMED filed the plan on June 21.
At issue is which technology best meets the U.S. Environmental Protection Agency regulations to address haze and improve visibility in federal wilderness areas and national parks. Mesa Verde National Monument in Colorado is the closest affected site to the San Juan plant, located near Farmington, N.M.
NMED’s proposed plan to meet the EPA regulations calls for installation of selective catalytic reduction, which PNM estimates would have a price tag of $750 million to $1 billion. Based on PNM’s partial ownership of San Juan, PNM’s share of that potential price tag is 46.3 percent.
PNM’s analysis, conducted by a well respected engineering firm that specializes in air emissions, concluded that the plant’s recently completed $320 million environmental upgrade meets the EPA’s Best Available Retrofit Technology – or “BART” – standards. Technologies installed as part of that environmental upgrade have reduced plant emissions of nitrogen oxide, or NOx – the primary emission targeted by the NMED proposal -- by about 33 percent. Other emissions also have been reduced.
PNM strongly believes the selective catalytic reduction technology would increase customer rates, yet would not have a significant impact on improving visibility in the targeted national parks and wilderness areas.
“Any proposal with this type of cost impact deserves ample time for review and consideration. Our proposed extension would provide that additional time,” said Pat Vincent-Collawn, president and CEO of PNM.
Nearby states, including Utah and Nevada have reached different, less expensive conclusions in preparing their recommended state plan to meet the EPA rules.
Regional haze is produced by various emissions, including NOx. Coal plants like San Juan are significant sources of NOx, which is why PNM installed state-of-the art low-NOx burners with over-fired air systems at San Juan during the recent environmental upgrade.
“Our national parks and wilderness areas are important public assets that must be cared for and respected, and PNM believes strongly that its recent environmental investments to reduce NOx will achieve the EPA intent of reducing haze in those public areas,” Vincent-Collawn said.
San Juan produces about half of the power PNM uses to serve its New Mexico customers.
The outcome of the October hearing on the state’s proposal will be submitted to EPA Region 6 for approval. The EPA process will include a 60-day public comment period. PNM will have five years to achieve compliance with the requirements that come out of that process.
PNM is a subsidiary of PNM Resources, an energy holding company based in Albuquerque, N.M. PNM provides electric utility service to 500,000 retail customers in New Mexico. The company also sells power on the wholesale market in the West. PNM Resources stock is traded primarily on the NYSE under the symbol PNM. For more information, see the company's Web site at PNM.com.
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