STATE CAPITOL

July 31st, 2017

Mr. Ernest D. Archuleta P.E.

Public Regulation Commission
Office of the Chief of Staff
1120 Paseo De Peralta
P.O. Box 1269
Santa Fe, NM 87504

Dear Mr. Archuleta,

In The Matter of the Filing of an Integrated Resource Plan by the Public Service Company of New Mexico, we
are writing to file a formal protest to the Integrated Resource Plan ("IRP") proposed by the Public Service
Company of New Mexico ("PNM").

In large part due to the inadequacy of the PRCs IRP guidelines, PNMs Integrated Resource Plan which
proposes the abandonment of San Juan Generating Station ("SJGS") in 2022, fails to account for several very
significant factors. These include the number of economic base jobs that will be lost, the cost for greenfield
reclamation of the abandoned SJGS, the advantage of keeping a diverse energy portfolio as a safeguard
against commodity price increases and service disruption, and the impact on state and local revenues -
including several school districts.

The premature shutdown of SJGS will result in the elimination of approximately 1;500 jobs in San Juan County,
including over 650 at the power plant and coal mine along with approximately 750 contractors, suppliers and
other service related work. These 1,500 jobs account for over $75 million in annual wages and benefits. The
magnitude of harm the elimination of these jobs would cause to the Four Corners region cannot be overstated
- the equivalent in Bernalillo County would be the loss of Kirtland Air Force Base or Sandia Laboratories. At a
time when more than 6,000 high-paying oil industry jobs have disappeared along with nearly 14,000 residents,
San Juan County would be devastated by the loss of more economic base jobs.

Another major problem with PNMs IRP is their failure to account for the cost of reclaiming the SJGS site. PNM
should not be allowed to abandon SJGS without returning the site back to greenfield status. The omission of
reclamation costs in the IRP demonstrates PNMs intent to leave behind an industrial hazard site for New
Mexico taxpayers to deal with in the future. If that site is not going to be put to beneficial use as a power
generation station, it should be returned back to its original state. This is a $270 million expense that needs to
be accounted for in the IRP.

Additionally, PNMs IRP severely underestimates the benefits of keeping a diverse energy portfolio. The IRP
does not indicate any hedge against an increase to natural gas prices, which have been well over ~10 / MCF in
recent history. PNM should also be required to have adequate storage facilities or infrastructure in place to
ensure continued utility service in the case of supply disruption. Currently, coal power generating stations are
required to stockpile reserves to insure against supply disruption -this is a minimal public safety requirement.
All reserve supply facilities and/or infrastructure should be included in the initial IRP cost estimate.

Finally, PNMs IRP completely disregards the impact of prematurely decommissioning SJGS on state, local
governments and school districts. Between severance taxes, gross receipts, corporate, personal income taxes
and mill levies, well over ~50 million (every year) in state and local taxes and school district tax revenues will
have to be made up by tax paying citizens. The additional costs of unemployment benefits, along with an
increase in welfare and Medicaid enrolment will also have to be covered by tax payers. This shift of the tax
burden onto the backs of already overtaxed New Mexico citizens would be devastating as we continue to work
toward recovery from the Great Recession. These numbers do not include the $34 million stranded asset
exposure the residents of Farmington will bear due to the citys minority ownership in SJGS, nor the citys
premature replacement cost of ~97 million in new generation.

We therefore urge you, in accordance with your duty to protect the Publics Interests, to reject PNMs IRP
which proposes to prematurely shut down and leave abandoned the SJGS. We further urge the Commission to
require that PNM submit a new IRP which includes all of the costs presented to you in this protest.

Sincerely,

State Senator William Sharer, SD 1 Stal Steve Neville, SD 2

Representative Rod Montoya, HD :t