DISCUSSION:  PNM Resources' (PNM) San Juan Generation Station (SJGS) began operation in 1973. At full capacity, it burned approximately 20,000 tons of coal a day, 20% of which remained as Coal Combustion Residuals (CCR, or coal ash).  In 2017 alone the SJGS produced 1,360,871 tons of coal ash. As of June 30, 2019, PNM estimates that approximately 59,000,000 tons of CCR have been produced since SJGS began operation. At SJGS this material has been used as backfill in the surface mine near the plant and not far from the San Juan River, with no provision to isolate the ash from the groundwater which will saturate the mine when mining operations cease.

Coal ash contains a mix of arsenic, mercury, lead and other heavy metals and toxins. These metals and toxins have been linked to cancer, organ failure, and other serious health problems. Though in a vitrified state when dry, when wet the coal ash begins to "devitrify" and release the toxic material it contains.

The EPA has found evidence at numerous sites that coal ash has polluted ground and surface waters. Companies have paid substantial fines and suffered reputational consequences as a result of the contamination. 

PNM plans to close the remaining two units of SJGS by 2022. PNM has therefore filed a SJGS abandonment case at the New Mexico Public Regulation Commission (NMPRC), which will determine the amount of costs for decommissioning and reclamation at the SJGS plant and mine, including the costs of any required CCR mitigation. 

In its SEC filing of 09/2019, PNM states that it cannot say whether future federal rulemaking regarding CCR regulation "will have a material impact on operations, financial position, or cash flows,” but that "PNM would seek recovery from its ratepayers of all CCR costs. . .that are ultimately incurred" at SJGS.

There is, however, a risk of financial consequence to the company related to PNM's storage of CCR, and no guarantee that the NMPRC will allow the company to pass on these costs to ratepayers, especially considering the uncertain applicability to the SJGS abandonment proceedings of the recently passed New Mexico Energy Transition Act. Information in current SEC filings and on the PNM Sustainability Portal is not sufficient to allow shareholders to determine whether PNM has adequately anticipated and prepared for those risks.

RESOLVED: Shareholders request that the Board prepare a complete report on the company’s efforts, above and beyond current compliance, to identify and reduce environmental and health hazards associated with past, present and future handling of coal combustion residuals and how those efforts may reduce legal, reputational and financial risks to the company. This report should be available to the shareholders and the public on PNM’s website by January 1, 2021, be prepared at reasonable cost, and omit confidential information such as proprietary data or legal strategy.