Houston — Leaders of PNM Resources, parent of utilities in New Mexico and Texas, on 

Tuesday outlined a $2.7 billion capital spending plan, including about $393 million to re

place the capacity of the coal-fired San Juan Generating Station upon its proposed reti

rement in 2022. 

PNM Resources in July 2017 filed an integrated resource plan (IRP) with the New Mexico 

Public Regulation Commission that "indicated that the most cost-effective plan for custom

ers included the retirement of the remaining units at the coal-fired San Juan Generating 

Station after the existing coal contract expires in 2022," PNM CEO Pat Vincent-Collawn s

aid during a Tuesday earnings conference call. 

New Mexico regulators have yet to take action on the IRP, and they have no statutory time 

frame in which to rule. If the IRP is approved, PNM's Public Service Co. of New Mexico would 

have to request approval of a plant abandonment plan and a plan to replace that power. 

"There is a regulatory process that we must follow, and we must obtain commission approval 

to abandon generation facilities as well as to secure sources of replacement power," Vincent-

Collawn said. "We continue to work through the [request for proposal] process for potential 

sources of replacement power, and we expect to have the responses evaluated in the spring 

of 2019. Depending on that evaluation, ... we could then make an abandonment filing that 

includes a plan for replacement power." 

CONTROVERSIAL BASELOAD PLANT 

The San Juan Generating Station remains controversial because it is a major employer in 

the impoverished Four Corners area of the US, and replacing its 847 MW of baseload pow

er in the region could require significant investment. 

In 2017, the plant had a capacity factor of almost 74%, and its operating and maintenance 

expenses totaled $25.06/MWh, according to the S&P Global Market Intelligence power plant 

database. 

Public Service Co. of New Mexico owns about 66% of the project, while Fortis unit Tucson 

Electric Power owns about 20%, the city of Farmington, New Mexico, owns about 5%, Los 

Alamos County, New Mexico, owns 4.3%, and the Utah Associated Municipal Power system 

owns 4.2%. 

In all, PNM plans to spend about $514 million on capital expenditure in 2018, $525 million in 

2019, $500 million in 2020, $503 million in 2021 and $680 million in 2022, according to the 

written earnings presentation from Chuck Eldred, PNM chief financial officer. 

ECONOMICS, WEATHER 

PNM's other significant business is Texas-New Mexico Power, where the company raised its 

planned capital expenditures for 2018 by about $30 million to $215 million, Eldred said. "We 

continue  to  see  growth  in  our  territory  in  West  Texas  due  to  continued  oil-and-gas 

development in the Permian Basin," Eldred said, as well as in petrochemical complexes along 

the Gulf Coast. 

Economic growth in New Mexico and Texas, as well as weather-related increased demand in 

the region, prompted PNM to raise its earnings per share guidance to a range of $1.91 to 

$1.98 in 2018 and $2.08 to $2.18 in 2019, Eldred said. The company previously projected 

EPS of $1.82 to $1.92 in 2018 and $2.04 to $2.16 in 2019.