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PNM, 4 parties sign new agreement to end dispute over future of San Juan Generating Station

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SANTA FE, New Mexico — Public Service Co. of New Mexico and four other parties signed a new agreement Thursday to end their dispute over the future of the coal-fired San Juan Generating Station near Farmington.

The agreement potentially paves the way for the state Public Regulation Commission to approve PNM's plan to shut down two of the power plant's four generating units to meet federal air pollution regulations, the Albuquerque Journal reported.

Environmental, clean energy and consumer organizations had opposed PNM's proposals for San Juan, mainly because the utility and its parent firm wanted to acquire 197 megawatts of excess coal generation that will be left behind in one of the two remaining generators after some of the plant's co-owners depart from the facility.

Those groups wanted PNM to shut down more of the plant and require the utility to seek solar and wind power to replace the lost coal generation.

Now, PNM can take ownership of the additional 197 megawatts to keep San Juan's two remaining units fully operational.

PNM has agreed to a new review by the Public Regulation Commission in 2018 over whether more or all of San Juan should be shut down after 2022 when the current partnership among plant co-owners expires and PNM's coal supply contract for the facility comes to an end, according to the Journal.

Among other things, PNM also will accept the net book value of $1,100 per kilowatt for 134 megawatts of extra power from the Palo Verde Nuclear Generating Station in Arizona that PNM plans to bring onto the New Mexico grid to replace lost generation after half of San Juan is shut down in 2017.

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