Benzinga | Nov 15, 2021 10:50AM EST

Hearing Examiner Issues Recommendation To Approve Abandonment, Securitization Of Four Corners Power Plant

On Friday, a Hearing Examiner of the New Mexico Public Regulation Commission (NMPRC) issued a recommendation for PNM Resources, Inc. (NYSE:PNM) wholly-owned subsidiary Public Service Company of New Mexico's (PNM) application for the abandonment and securitization of its minority ownership of the coal-fired Four Corners Power Plant.

If adopted by the NMPRC, the recommendation approves PNM's application for abandonment of its interest in the plant in 2024 and recovery of undepreciated amounts through securitization. This is consistent with the Energy Transition Act, New Mexico's landmark energy policy to transition the state to clean energy while protecting the interest of customers and impacted communities.

If approved by the NMPRC, this recommendation allows the company an early exit from the Four Corners Power Plant to no longer serve customers with coal-fired power, implement seasonal operations in Fall of 2023 reducing annual emissions by an estimated 20 - 25%, replace the power with cleaner energy resources, securitize the remaining balance of the plant with lower financing rates and provide economic development funds to the impacted region, resulting in a net customer savings of up to $300 million.

The Hearing Examiner also recommended that the NMPRC conditionally approve the sale and transfer of PNM's minority interest in the plant to Navajo Transitional Energy Company (NTEC) with modifications to the contract language, and to maintain the NMPRC's authority to review the prudence of amounts to be securitized in PNM's next general rate case.

Following an opportunity for PNM and other parties to file any objections to the recommended decision, the NMPRC will review the case and recommended outcome in the coming weeks, with a decision required by the Energy Transition Act by December 15, 2021.

Additional materials pertaining to the application for abandonment and securitization are available at https://www.pnmresources.com/investors/rates-and-filings.aspx