Unions representing workers at the San Juan Power Plant and San Juan Mine have asked the state for about $6 million in energy transition funds to reimburse laid-off workers for health insurance costs they’ve incurred out of pocket since they were fired are. Funding would come from the New Mexico Department of Workforce Solutions.
This is especially important for the miners who lost their health insurance at the end of the month they were laid off. Power plant workers, on the other hand, have health insurance for six months after being laid off.
Layoffs at the mine began last year as facilities prepared for closure.
Stephen Curtis, a lawyer representing the unions, said work at both the mine and the power plant was dangerous and hard on the body. He said losing health insurance was one of the factors that prompted laid-off workers to either leave the community in search of work or take “dead end” jobs.
The funds for the energy transition come from securitized bonds that the Public Service Company of New Mexico plans to issue to essentially refinance past investments in the plant. Though PNM has yet to issue the bonds, it made the $20 million available to the state this summer.
The Energy Transition Act of 2019 created the mechanism for PNM to access securitized bonds and required that a portion of those funds go to three Departments of State – Economic Development, Workforce Solutions and Indian Affairs – to benefit communities and workers directly affected by the plant to come closure.
Of this funding, $12 million is available through the Department of Workforce Solutions to assist laid-off workers.
In 2020, the Energy Transition Act Committee asked for information on possible projects that could benefit from the energy transition funding.
The committee plans to send recommendations to the three foreign ministries. These recommendations could include specific projects to be supported or areas such as sustainable agriculture.
State laws dictate a formal bidding process that government agencies will go through, but projects backed by the Energy Transition Law Committee have an advantage in the process. However, if the committee recommends reimbursement of insurance costs, funds could be distributed to qualified workers without going through the tendering process.
By the time the committee discussed the proposals they heard on Tuesday, the meeting was already an hour behind schedule and many members had left.
Many of those who remained supported the reimbursement of insurance costs to the miners for up to 12 months.
This would allow workers to continue to protect themselves and their families as they transition to a new career or into retirement. Some of those who have decided to retire are not yet eligible for Medicare but will soon be. For those who have chosen an education that will help them launch a new career, direct insurance reimbursement payments help them maintain health coverage while pursuing a degree or certificate.
Tom Taylor, who serves as head of economic development, did not support the request and said the money should instead be used to support projects that create jobs for these laid-off workers.
Taylor, who formerly served in the state House of Representatives, instead suggested that the committee ask lawmakers for an emergency allocation of funds to help workers who are now either paying for insurance out of pocket or have chosen not to will.
Rather than making a decision on Tuesday, the committee decided to meet again when more committee members can attend and have an in-depth discussion of the proposed projects, including direct funds for insurance costs.
Jason Sandel, the chair of the Department of Workforce Solutions, said the future meeting will likely take place in the first week of December.
Throughout the meeting, Sandel emphasized the need for projects that can quickly create aid and jobs. This could put projects like a planned pumped storage power plant at a disadvantage.
While the pumped storage project would create two reservoirs on Navajo Nation — one in Arizona and one in New Mexico — that could become tourist destinations, and while the project would create thousands of construction jobs and more than 100 full-time jobs, the funding being sought would be used for Used studies required to get the project licensed by the Federal Energy Regulatory Commission. Job creation will likely take years to come, and the company proposing the project would need to provide more evidence that the Navajo Nation not only supports the project, but is willing to provide both the land and water to make it happen to enable it.
And while the Energy Transition Act does not allow the use of business development funds for hydrocarbon projects, at least two of the proposals relate to natural gas.
These include San Juan College’s proposal to apply for $1.4 million to train 55 workers in greener natural gas production.
There were also two hydrogen project proposals, but one of them — the Libertad proposal — switched from methane-based hydrogen to electrolysis, or using water to produce hydrogen. When asked about water rights, Joe Merlino, a managing partner at Libertad Power, did not identify a water source. Like the pumped storage power plant project, the Libertad project is still in the process of carrying out studies. Merlino said Libertad hadn’t ruled out the possibility of using methane, but he said the energy transition funds would not be used to pursue methane-based hydrogen.
Merlino said Libertad thinks methane-based hydrogen could play a role in the energy transition, but is currently unsure what role that role will play.
He said the company’s move to electrolysis is based on where the market seems to be going.
Members of the public who commented urged the committee to support what they called the community’s proposals. These included four proposals to support traditional Navajo agriculture, a proposal to promote sustainable living on the Navajo Nation, a proposal to provide off-grid solar power to Navajo Nation residents who lack electricity, and a proposal to create a tourism center that would serve the unique wilderness of the region showcases mustangs and training entrepreneurs to feed mustang mares birth control to bring population down to sustainable levels.
Committee member Joseph Hernandez commented on the proposals for agriculture, housing and off-grid power.
“We’re getting to anything that’s needed within 100 miles,” he said, referring to the Energy Transition Act’s definition of impacted communities as within 100 miles of the plant.
Taylor said the funding is coming to the community too late to prevent some of the consequences of the plant’s closure.
“A problem has already arisen that we should be prepared to kill,” he said.
Originally, the committee had hoped to have projects after the mine and power plant closed. That would have helped the laid-off workers to immediately move into new jobs.
Some of the delays are due to legal challenges to the Energy Transition Act, while others were related to the COVID-19 pandemic.
A full list of project proposals can be found here.