Policy repeal unlikely to reverse coal's decline in New Mexico's energy picture

Despite changes, PNM to continue move toward cleaner energy sources


New Mexico's largest utility and environmentalists say the Trump administration's announcement Monday (Oct. 9) that it's taking steps to repeal regulations on coal-fired power plants is unlikely to change the fact that market forces already are pushing the state away from dependence on coal.

The Environmental Protection Agency said it intends to dismantle the Clean Power Plan, an Obama-era policy intended to require coal and natural gas power plants to limit greenhouse gas emissions and install pollution control technology to help slow global warming.

A large coal company operating in New Mexico says it supports the repeal. But, while some environmental groups decried the rollback as an affront to climate change policy, others said deregulation will not be enough to save an industry that is no longer viable.

Public Service Company of New Mexico said it still plans to stop burning coal in the next decade or so.

"It is a bit of a political theater," Jeremy Nichols, climate and energy director at WildEarth Guardians, said of the EPA announcement.

"The regulations will go away and the EPA isn't going to do anything," he said, but "things are moving away from coal, Clean Power Plan or not. Nowhere is that more evident than New Mexico."

Public Service Company of New Mexico said last spring it plans to shut down the coal-dependent Four Corners Power Plant near Farmington by 2022 and entirely wean its energy production off coal by 2031. The company currently relies on coal for 60 percent of its energy generation, but will drop at least 12 percent by 2025.

To comply with the Clean Power Plan, PNM had already agreed to shut down two of its four coal-burning units at Four Corners and install pollution controls on existing units by the end of 2017.

Ray Sandoval, a spokesman for PNM, said the company doesn't anticipate any changes to these plans regardless of changes in the Clean Power Plan, but is awaiting approval from the state Public Regulation Commission to retire its coal assets in 2022 and 2031.

He said the company's current power plan for the coming years is based on "a comprehensive analysis of the most cost-effective means to meet our customers' energy needs over the next 20 years," not on the federal policy.

"The actions we have planned represent the most cost-effective ways to serve our customers with reliable, affordable and environmentally responsible energy," he said.

Four Corners is among a number of coal-fired power plants nationwide that have closed or are scheduled to close in coming years as a result of rising costs of burning coal compared to cheap natural gas and increasingly affordable renewable energy sources.

President Donald Trump campaigned on a promise to repeal all of former President Barack Obama's climate policy, including regulations to curb methane emissions from oil and gas operations, saying the former administration had deliberately attacked the fossil fuel industry and jobs in the sector. Trump's America First Energy Plan and executive order directed agencies to repeal any regulations that limit energy growth.

But the coal market's descent began prior to Obama's climate policy, largely in response to competition from low-priced natural gas, making coal unprofitable and leading to a slew of bankruptcy filings for some of the nation's largest coal producers.

Peabody Energy, which operates El Segundo and Lee Ranch mines in New Mexico, laid off workers and filed for bankruptcy last year after failed attempts to sell off its in-state assets and other properties.

Travis Snyder, a spokesman for Peabody's corporate office in St. Louis, did not comment on how the regulatory repeal would affect the company's New Mexico holdings, but sent a statement saying Peabody supports "steps to protect affordable, reliable and resilient coal-fueled generation for American families and businesses, and support repeal of regulations that would have raised power costs and damaged reliability with no significant benefit."

New Mexico is on track to be 20 percent dependent on clean energy by 2020, the group said, with the renewable energy sector employing nearly 9,500 New Mexicans, according to 2017 statistics from the U.S. Department of Energy.

While 40,000 workers in the state are employed in "traditional energy" jobs, dominated by extraction related to oil and gas, just more than 5,000 work in electric power generation, a field that employees more than 3,000 solar workers, 1,000 wind electricity workers - considered growing sectors - and just 222 people in coal generation. Another 1,000 people in the state work in coal extraction.

Contact Moss at (505) 986-3011 or rmoss@sfnewmexican.c­om. This story was first published in The Santa Fe New Mexican, a sister publication of The Taos News.