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FAQs

Q. Why is PNM working to replace fossil fuels with renewable energy?
A. Renewable energy is better for the environment and will help lower costs to consumers in the long run. With passage of the Energy Transition Act, the State of New Mexico has put forth new mandates for all utilities to be 100% carbon free by 2045, and PNM will exceed this by being 100% emissions-free by 2040. With new technology and by working together, PNM will conserve our natural resources and protect our environment all while offering customers the affordable energy they require to power their homes and businesses. 


Q. Why is PNM going to be 100% emissions-free by 2040 and not 2045?
A. PNM and New Mexico will be a national leader by moving forward, together, in becoming one of the first large investor owned utilities in the country to be 100% emissions-free. We can be a model for other states and utilities. In increasing our emissions-free resources we can export our renewable energy to other states. By becoming the national leader in clean energy, we hope to attract new businesses to our state, and show how economic advancement and emissions-free energy go hand in hand.

2040 is five years ahead of the state’s goal. For perspective, in today’s numbers, those five years equals a reduction in carbon in our state by over 32 million metric tons or the equivalent of 6.9 million cars on the road for one year. This also saves 15 billion gallons of water. That amount could fill up 300 million bathtubs.
Q. Can New Mexico lead the country in renewable and zero emissions energy?
A. Yes. With an abundance of wind, more than 300 days of sunshine annually, cutting edge battery storage technology and geo-thermal generation, we have the resources to play a leading role in the renewable energy economy. Also, by taking on a leadership position with renewable and zero emissions energy, our state becomes more attractive for economic development for those businesses that value renewable energy use. As we move towards an energy economy powered by clean energy, PNM will also move our economy forward, together, by exporting renewable energy to neighboring states. By realizing this enormous opportunity, we will be creating new jobs, creating real savings for our customers and creating new economic activity in communities throughout the state.
Q. Why is PNM shutting down San Juan Generating Station?
A. By moving away from coal, we will be able to provide cleaner energy at a lower long-term price. With the cost of renewable energy decreasing, and new technologies being brought to the marketplace, it means the most affordable energy for our customers is renewable resources generated right here in New Mexico. While PNM will no longer be generating power from coal at San Juan, we look forward to a long partnership with the communities we have called home for so long by investing in new technology and generation in these very communities.  
Q. If sun and wind are free, why isn’t renewable energy free, or close to free, for the customer?
A. Harnessing the power of natural resources requires substantial investments in generation facilities, like any other resource we use to power your homes and businesses. PNM must invest in the transmission grid and distribution technology to ensure the lights in your homes and businesses always shine bright. This means power lines, substations and other infrastructure stretching from the remote areas of our state all the way to your doorstep, but PNM will always work to ensure we offer some of the most affordable rates in the entire region. We may also invest in storage technology such as batteries, transitional generation resources like natural gas and even new software to make our system secure, reliable and efficient, even when the sun goes down or the wind stops blowing.
Q. What is the Energy Transition Act?
A. In order to transition from coal-fired generation to clean energy, the Energy Transition Act uses a financial practice known as securitization that allows the cost of the retiring San Juan Generating Station to be refinanced into energy transition bonds at a much lower rate than what customers are paying now. The Energy Transition Act also sets aggressive new mandates of 100% carbon-free energy by 2045 and protects customers and workers as we transition to clean energy. 

The Energy Transition Act is a way to save customers money by allowing the costs of previous investments in San Juan Generating Station to be refinanced at lower rates. In addition, PNM will forgo recovery of about $109 million in investment costs to aid the transition to an emissions-free energy mix. The energy transition bonds also will be used for severance packages and job training for plant and mine workers and provide money for economic development in San Juan County and the Navajo Nation. 

Q. Will this increase my PNM bill?
A. The long-term savings from closing the San Juan Generating Station are projected to lead to lower rates for all customers and will save customers $6-$7 dollars, on average, on their monthly bill. PNM is committed to keeping our rates as some of the most affordable in the region, and affordability and reliability will be the priority as we move forward, together.

Q. How will PNM help to mitigate the economic impact in the Four Corners area by the closure of San Juan Generating Station?
A. We are working to minimize the economic impact on the Four Corners region as we move away from coal. PNM will work to ensure the employees who have been impacted by the closure will have new opportunities, including job training, educational opportunities and severance packages to assist in this important energy transition.
Q. Why isn’t PNM paying for this?
A. PNM is contributing to the costs associated with this transition and has agreed to forgo recovery of $109 million in investment costs to help lower the cost to customers. Securitization will also provide low-cost financing of the coal plant costs which means lower bills for customers. 
Q. When will the San Juan Generating Station close?
A. We closed two the four units on this plant site in 2017. The remaining two units are planned for closure in 2022 pending regulatory approval.
Q. What will replace the energy from the San Juan Generating Station?
A. We will transition more renewable energy to our portfolio, along with transitional resources and battery storage, as we move towards 100% emissions-free energy. PNM may invest in transitional gas resources that provide the system reliability necessary to continue the transition to more renewables and energy storage systems. In exiting coal resources, we will reduce emissions by 87% by 2032 from 2005 levels. This far exceeds emissions reductions anticipated with the Clean Power Plan and the United States’ voluntary commitment to the Paris Agreement of a 26% to a 28% reduction in carbon emissions below 2005 levels by 2025. 

Q. When will PNM use more renewable energy?
A. PNM is constantly adding more renewable energy. We’re adding five new solar plants this year alone and will be investing in new wind facilities and the transmission infrastructure needed to bring renewable energy from across New Mexico straight into your home. While the State of New Mexico will require PNM to be 100% carbon-free by 2045, PNM is going one step further, with our customers and communities partnered with us every step of the way, by planning to become 100% emissions-free by 2040 with regulatory approval.
Q. What will producing and using more renewable energy mean for New Mexico?
A. More renewable energy will provide an incentive for businesses to locate here. It will preserve New Mexico’s valuable natural resources and the landscapes we cherish in The Land of Enchantment for generations to come. With more renewable energy, we will be creating new jobs and opportunities, as well as the ability to export our renewable energy to neighboring states, bringing savings and substantial economic opportunities for communities in every corner of the state. 

Q. Who will own the facilities where renewable energy is being produced?
A. By using an open bidding process, PNM will work with local businesses, communities and entrepreneurs to ensure our customers get the most affordable and reliable renewable energy.  PNM will continue to own and operate some facilities and will also enter into power purchase agreements when clean energy can be bought at an affordable rate for our customers and the communities we serve.
Q. What is an Integrated Resource Plan (IRP)?
A. The purpose of an IRP is to identify the most cost-effective resource mix that would meet the projected electricity demands of the PNM customer over the next 20 years, and to develop a four-year action plan that is consistent with that resource mix. Preparing the Integrated Resource Plan is a year-long process that is documented in a final report. The IRP analysis requires utilities to use a long-term portfolio approach to identify potential resources that a utility intends to develop over the next twenty years, referred to as the Most Cost-Effective Portfolio (MCEP). The long-term plan is accompanied by a near-term roadmap called the Four-Year Action Plan. The MCEP and Four-Year Action Plan is the result of considering the cost, reliability and environmental impact of several ways to supply electricity. 
Q. How did PNM develop the Integrated Resource Plan (IRP)?
A. The PNM 2017 IRP considered, among many other things, the impact of PNM exiting San Juan Generating Station when the ownership agreements and coal supply contract run out in 2022. The work was done as part of a public process. PNM hosted several meetings beginning in June 2016. At the meetings, assumptions, costs, modelling processes, modelling tools, preliminary results and the draft report were presented and discussed by subject matter experts. PNM presented the preliminary results of the analysis at a public advisory group meeting on March 28, 2017 and released a draft report for review on April 20, 2017. After the draft report release, PNM hosted meetings statewide, including a meeting in Farmington at San Juan College that was attended by hundreds of plant employees, coal miners, public school employees and local residents to discuss the report’s findings and collect additional input before the report was filed with the New Mexico Public Regulation Commission on July 3, 2017.