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This story is co-published with High Country News, a nonprofit media group that covers points and tales that outline the Western United States.


New Mexico was on monitor to turn out to be a mannequin for phasing out coal energy with out abandoning those that have labored, lived, or breathed beneath its smokestacks.

The state’s largest utility had already introduced plans to divest from coal. A brand new state legislation would maintain it to that pledge whereas additionally offering hundreds of thousands of {dollars} in funding for employees and affected communities.

“This can be a actually huge deal,” Gov. Michelle Lujan Grisham mentioned on the invoice signing. “The Energy Transition Act essentially adjustments the dynamic in New Mexico.”

The 2019 legislation has withstood political and authorized challenges, however three years later it nonetheless faces a significant check. Ongoing drought, provide chain points, and rising pure gasoline costs threaten to complicate or delay its rollout by prolonging the lifetime of the state’s largest and most polluting coal-fired energy plant.

Advocates for a so-called just transition from fossil fuels are assured the laws will finally obtain its objectives, however they could nonetheless face months or years extra uncertainty about its timeline and implementation.

New Mexico Gov. Michelle Lujan Grisham, surrounded by state lawmakers, cupboard officers and others, indicators the Energy Transition Act throughout a ceremony on the State Capitol in Santa Fe on March 22, 2019. Credit score: Dan McKay / The Albuquerque Journal through AP

Early momentum

Lujan Grisham was elected in 2018 as a part of a cohort of “Green New Deal” Democrats throughout the nation. As quickly as her time period started, she and fellow Democrats within the statehouse, with the backing of state and regional environmental teams, got down to craft a form of miniature Green New Deal, reviving laws that beforehand had perished. 

Momentum was on their aspect. The state’s largest utility, Public Service Firm of New Mexico, often known as PNM, had already mentioned in 2017 that it was washing its fingers of coal energy and would shut down its San Juan Producing Station in June 2022. Quickly thereafter, Arizona Public Service indicated it might shut down the 4 Corners Energy Plant, simply eight miles from the San Juan plant, in 2031.

The 2 amenities — initially having a mixed nameplate capability of greater than 3,000 megawatts — had been amongst half a dozen massive coal crops constructed on the comparatively sparsely populated Colorado Plateau in the course of the Sixties and ‘70s to quench burgeoning starvation for electrical energy within the Southwest. The smokestacks have spewed hundreds of tons of dangerous particulates, together with the potent neurotoxin mercury, into close by, predominantly Navajo, communities, whereas transport practically the entire energy to far-off cities.

The Energy Transition Act goals to deal with each the air pollution and injustice. The legislation mandates that New Mexico electrical energy suppliers get 80% of their energy from renewable sources by 2040, and 100% from carbon-free sources by 2045 — formidable objectives for a state that at the moment will get half its electrical energy from coal and a 3rd from pure gasoline.

It permits a utility to take out “energy transition bonds” to cowl prices related to coal plant abandonment. That features as much as $30 million for coal mine reclamation, and as much as $40 million to assist displaced employees and affected communities, to be shared by the Energy Transition Indian Affairs Fund, Financial Improvement Help Fund and Displaced Employee Help Fund.

Whereas the funds don’t match the estimated $100 million or extra in financial influence from the closure, “it’s a very good first step and provides us one thing for the 4 Corners communities to construct on,” mentioned Robyn Jackson, interim govt director of Diné CARE, an environmental group that has held the crops’ homeowners to account for 4 a long time.

Robyn Jackson, interim govt director of Diné CARE, on a latest tour of an deserted oilfield close to the San Juan Producing Station. Credit score: Jonathan P. Thompson

Farmington’s Republican state lawmakers, Rep. Rod Montoya and Sen. William Sharer, ardently labored to kill the invoice, transition funds and all. Earlier than its passage, they tried to require PNM to maintain working the San Juan plant 5 years longer than deliberate. And, in live performance with fossil gasoline advocacy teams comparable to Energy the Future, a nationwide group calling itself “the voice of energy employees advocating for his or her jobs and communities, and pushing again on the unconventional environmental motion,” they’ve continued to assault it ever since, though the act was a response to the plant’s closure, not its trigger. In February, Montoya co-sponsored a invoice that will have prolonged the lifetime of the San Juan plant and included pure gasoline crops beneath state clear energy sources. It didn’t cross. 

Opposition has additionally come from an surprising place: New Energy Financial system, a Santa Fe clear energy group that has additionally been PNM’s most outspoken adversary on plenty of points. New Energy has mentioned it helps the mandates to decarbonize however it’s not eager on the truth that PNM’s ratepayers, not shareholders, in the end would pay for the abandonment and simply transition funds by the bonds. It argued in a 2019 court docket problem that the act unconstitutionally took away state regulators’ oversight of monopoly electric utilities.

In January, New Mexico’s Supreme Courtroom rejected New Energy’s problem and affirmed the Public Regulation Fee’s choices concerning abandonment and securitization. The ruling ended the authorized battle over the act and cleared the best way for the closure of the coal plant and the transition to scrub energy.


“… the longer that coal-generated capability is a part of the energy combine, the longer the delay in producing the financial advantages of transitioning to low-cost renewable energy.” 

Nicole Horseherder


Coal plant’s revival

However a number of components have collided during the last yr that might complicate and delay — maybe for years — the transition from fossil fuels. 

The summer season of 2021 was brutally scorching and dry throughout the West, dealing a one-two punch to the facility grid as drought depleted hydropower provides and the warmth elevated electrical energy demand. With a excessive chance of a repeat this yr, and with {solar} tasks delayed by a federal probe into Asian {solar} imports and pandemic-related provide chain constraints, PNM opted to maintain one in every of two San Juan plant items working by September, three months previous the scheduled retirement date. 

In the meantime, a just about unknown firm emerged to purchase the facility crops with plans to put in carbon seize tools. Enchant Energy now has extra time to get its regulatory geese in a row and to promote energy from the plant — which has turn out to be extra cost-competitive resulting from excessive pure gasoline costs. Enchant’s plant takeover is something however a finished deal, but when it had been to transpire, and the plant had been to proceed working, it might have an effect on the implementation of the Energy Transition Act. 

Enchant Energy CEO Cindy Crane mentioned protecting the plant open would protect high-wage jobs on the plant and mine, about 40% of that are held by Navajo employees, whereas additionally including tons of of union development jobs to construct the carbon seize tools. It additionally would give native officers extra time to arrange for the demise of the coal trade and the financial transition it necessitates. 

PNM says it can abandon the plant later this yr, no matter what occurs with Enchant, and can then pay the transition funds to the state. However supply of a portion of these funds to the affected communities may very well be delayed by inconsistent language within the act, mentioned Cydney Beadles, New Mexico clear energy program supervisor for Western Useful resource Advocates Beadles, who beforehand was the authorized division director on the New Mexico Public Regulation Fee.

The act treats “shut” and “abandon” synonymously, indicating that the authors didn’t account for a situation wherein the plant continued to run after abandonment. The act doesn’t specify how the funds are distributed if the plant continues operations and employees should not displaced after PNM’s abandonment, which means the legislature in all probability must step in and resolve. 

In the meantime, PNM additionally was making a transfer that might lengthen the lifetime of the 4 Corners Energy Plant past Arizona Public Service’s 2031 exit. It proposed not simply to divest from the plant, however to pay the tribe-owned Navajo Transitional Energy Firm $75 million for it to take over PNM’s 13% share. Helmed by coal trade veterans, the corporate owns a trio of big coal mines within the Powder River Basin. 

Extra considerably, in 2013 it bought the Navajo Mine, which feeds the 4 Corners plant, which means the corporate “has a self-serving curiosity to maintain the plant working so long as doable,” in keeping with Tó Nizhóní Ání’s Nicole Horseherder, the leader of the trouble to get a simply transition on the Navajo Producing Station. “And the longer that coal-generated capability is a part of the energy combine, the longer the delay in producing the financial advantages of transitioning to low-cost renewable energy.”

Much more egregious to the environmental neighborhood was that PNM proposed paying for its abandonment of 4 Corners with Energy Transition Act bonds, though it might be transferring its possession. In different phrases, the utility needed to delay and even derail its transition from coal utilizing a legislation meant to expedite that very same transition. State regulators rejected PNM’s proposal in December, however the utility has appealed. 

In the meantime, a proposal to a committee vetting funding requests for the simply transition funds might divert a refund towards the fossil gasoline trade. 

The “consolidated proposal” by San Juan Faculty consists of pitches for a {solar} charging station manufacturing facility, a pumped hydropower energy storage facility, a medical waste incinerator and a retail enterprise park within the Navajo neighborhood of Shiprock. But it surely additionally consists of proposals to provide hydrogen utilizing the world’s considerable pure gasoline. And a plan for a “green certification” program that will practice college students to have the ability to provide third-party green certification to grease and gasoline corporations. Whereas the top aim is to make oil and gasoline manufacturing much less carbon-intensive, this form of certification can be a type of greenwashing, in keeping with many environmentalists, that perpetuates the fossil gasoline financial system. 

San Juan Faculty’s accomplice on this endeavor is Western States and Tribal Nations, a corporation devoted to opening up overseas markets to pure gasoline from the Inside West by supporting the development of an LNG export terminal in Mexico. The group’s chairperson is Jason Sandel, the manager vp of Aztec Effectively, a family-owned oilfield providers firm primarily based within the San Juan Basin and a giant hydrogen hub booster. He additionally helms the Energy Transition Act advisory committee, which means he’ll be concerned in vetting the proposals for funding. 

Members of the environmental neighborhood say the Energy Transition Act has confirmed sturdy and can proceed to do what it was meant to do because the coal financial system fades. 

“Coal is dying as a result of it’s costly and harmful, and renewables are low-cost and secure, and they’re what we have to stop the unthinkable,” mentioned Camilla Feibelman, director of the Sierra Membership’s Rio Grande chapter. “A altering financial system, the impacts regionally of polluting industries, and the worldwide impacts of local weather change are profoundly troublesome for everybody concerned, but when we work collectively as an built-in neighborhood to search out options we might get there.”



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