Replacement Plan FAQ's

1. Why submit four scenarios to replace the generation from the San Juan coal plant?

PNM committed to outline multiple distinct pathways to replace energy as a result of the proposed San Juan coal plant closure on July 1, 2022. These scenarios give customers information in a transparent way to help them understand the challenges and benefits of different energy mixes serving power to New Mexico.

2. Which plan does PNM recommend?

PNM recommends Scenario One as it provides the most benefit to customers while meeting reliability requirements and placing significant resources in the San Juan county, as per the Energy Transition Act.

3. What does this mean for customers and New Mexico?

PNM’s filing puts New Mexico on the right path to a clean energy future while saving customers money.

Scenarios Infographic
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4. How can I voice my opinion on these plans?

There are ways to voice your opinion.

- File a public comment in this case with the New Mexico Public Regulation Commission records department.

- Share your comments with PNM here.

5. Now that PNM filed their plan, what’s next?

We will kick off stakeholder outreach meetings on July 9 and July 18 as the filing makes its way through the public NMPRC process.

6. Can PNM still meet its 100% emissions-free by 2040 goal with all four scenarios?

Yes, but with a caveat. Some scenarios pose reliability risks and problems and others pose a substantial cost increase to customers. See the infographic on the left.

7. Will my lights stay on if it is not sunny or windy?

Well, it depends. Scenario One and Scenario Two both meet the rigorous federal reliability standards placed on every U.S. utility. Scenario Three poses technological risks because of the significant presence of battery storage technology. Scenario Four does not meet the federal reliability standards.

8. How many jobs does Scenario One create?

Initially, Scenario One would add over 1,000 new construction jobs across the state of New Mexico.

Employee Aid
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9. What is PNM doing for affected employees in San Juan?

PNM is continuing our transparency and openness with employees during this time of transition. We are committed to providing a free flow of communication. We've created a website, www.PNM.com/ForYou, that serves as an informational resource center for all employees affected by the anticipated closing of the San Juan coal plant.

For our San Juan employees, PNM will be providing a total of over $10 million in severance to the 180 employees who will be impacted by the closure. On top of that, PNM is providing each employee with up to $10,000 annually for educational assistance to take certification classes or other job training. This will give employees the tools and resources they need to make individual choices on their future, while ensuring no individual is facing this transition alone.

Due to public policy decided by the state legislature, PNM will also aide employees at the San Juan coal company with severance and job training. PNM will provide an additional 3 months of severance for those employees as well as up to $8,000 in training.

The people in the communities surrounding the San Juan coal plant are important to PNM. In the filing, we are requesting a Displaced Worker Fund, additionally we have developed an Indian Affairs fund and an Economic Development Fund. To view all these details, visit www.PNMForYou.com/overview

10. Does this mean PNM will no longer own coal generation?

No. This is the second of three major steps PNM will be undertaking as we transition away from coal. First, in 2017, PNM closed 2 units at the San Juan coal plant. With the complete closure of the San Juan coal plant proposed now, the third and final step will be our exit of the Four Corners coal plant in 2031 for PNM to complete our transition away from coal.

11. Why do we need to locate batteries across the state of New Mexico?

To ensure the energy we need can be deployed when and where our customers need it, diversifying the locations of our battery storage will make our grid more reliable for customers. Additionally, we must consider the cost of transmission when developing new storage facilities and place these in an area where capacity isn’t an issue.

12. Why not add only battery storage now?

Battery storage is a newer technology. While there are some individual companies, such as Tesla, who have based their business on the development of battery storage, there are too few utilities who have successfully added battery storage without a hiccup on their system. More time is needed for battery storage companies to mature their business for utilities to fully test and modify the technology with lessons learned

Also, the price of battery storage will likely continue to decrease in the coming years, and it is in the interest of our customers to ensure we get the best value we can. As technology becomes cheaper, we will continue to evaluate our need for storage compared with the market price and enter into the necessary contracts at times when we get the best value for the current need

13. How much new generation will be placed in San Juan County?

In our recommended scenario, PNM would build over 35% of new generation within the San Juan area school district, which aligns with the preference stated in the Energy Transition Act. PNM is working to balance the financial interests of our customers, the reliability of our grid and our overall environmental impact to put forth the most affordable, reliable portfolio for our customers while minimizing the property tax reductions from the closure of the San Juan coal plant. This scenario invests in San Juan County, including new developments to add to the tax rolls, without compromising our grid’s reliability or the affordable rates our customers need.


14. Can PNM add more generation in San Juan?

Yes. This is what Scenario Two illustrates, but it comes at a higher cost to customers. Scenario Two is more than $54 million than the recommended plan in Scenario One.

Review each of the scenarios at www.PNM.com/PoweringTheFuture. There are benefits and challenges to all opportunities. PNM supports a balanced approach that considers costs, reliability, and environmental benefits. Additionally, other parts of our state are situated in better geographic locations, with more abundant sun or conditions conducive to wind power, meaning we must pick locations based on their actual ability to produce affordable and reliable energy, not limit our generation to geographical boundaries.

15. Can PNM keep the lights on without adding new flexible natural gas?

No. This is what Scenario Three illustrates. Scenario Three puts reliability at risk and is more than $156 million more expensive for customers than the recommended plan in Scenario One.

Review the plans and alternatives at www.PNM.com/PoweringTheFuture. There are benefits and challenges to all opportunities. PNM supports a balanced approach that considers costs, reliability, and environmental benefits. Additionally, other parts of our state are situated in better geographic locations, with more abundant sun or conditions conducive to wind power, meaning we must pick locations based on their actual ability to produce affordable and reliable energy, not limit our generation to geographical boundaries.


16. Can PNM replace the power from the San Juan coal plant with just solar and wind?

No. This is what Scenario Four illustrates. Scenario Four puts reliability at risk is more than $774 million more expensive for customers than the recommended plan in Scenario One.

Review the plans and alternatives at www.PNM.com/PoweringTheFuture. There are benefits and challenges to all opportunities. PNM supports a balanced approach that considers costs, reliability, and environmental benefits. Additionally, other parts of our state are situated in better geographic locations, with more abundant sun or conditions conducive to wind power, meaning we must pick locations based on their actual ability to produce affordable and reliable energy, not limit our generation to geographical boundaries.

17. Why do we need more generation for replacement than what was produced at the coal plant?

We need more megawatts from renewable energy because the sun does not always shine and the wind does not always blow.  With coal or gas plants, PNM can ramp up or ramp down production depending on the energy needs of our customers, and therefore fewer megawatts are needed to serve customers.  With solar and wind, Mother Nature has control over when energy will be generated and at what pace, therefore more megawatts must be in place to make sure that customers’ energy needs are still met.