New Mexico Public Regulation Commission Chairman Stephen Fischmann said more information is needed before the agency can approve an application from Public Service Company of New Mexico to transfer its 13 percent ownership share of the Four Corners Power Plant to Navajo Transitional Energy Company and to refinance past investments into the plant with low-interest bonds.
Fischmann made these remarks Wednesday, prior to the commission unanimously voting in favor of an order denying the transfer and the refinancing of past investments, but leaving the door open for those to be approved in the future once the PRC has the information it needs to make that decision.
This vote came after several hours of deliberation in closed session.
“Basically what this does is just ask for some more information on the issues of prudency and on the issues of the replacement portfolio,” Fischmann said.
The prudency issue he referenced comes from a 2016 rate case when the PRC deferred a decision on whether investments made into the power plant to keep it open, including installing pollution controls, were prudent. The matter was supposed to be addressed in a future rate case, but the rate case has not been filed and, Commissioner Cynthia Hall said, ratepayers are paying for those investments.
The replacement portfolio refers to the fact that PNM has not filed a proposal for generation assets to replace the electricity it currently receives from the Four Corners Power Plant.
Fischmann said that is “information that we need to make a good decision.”
He said the commission is open to PNM following up with that information, which he said should be available early next year.
The refinancing of the past investments was denied because the transfer was denied. PNM was seeking authorization to use the securitization tool created by the Energy Transition Act to access $300 million in low-interest bonds that would refinance past investments and provide assistance to workers and the community that will be impacted once the power plant closes. Those bonds would be paid by ratepayers through a non-bypassable charge on their bills. The Four Corners Power Plant is scheduled to close in 2031, however the owners could choose to shutter it earlier.
Navajo Nation leaders, including President Jonathan Nez, spoke at the start of the PRC meeting urging commissioners to approve the transfer. Nez emphasized the important role that the Four Corners Power Plant plays in providing jobs and revenue for the tribe.
“The Four Corners Power Plant and Navajo mine have been key contributors to the Navajo Nation’s economy for over 60 years,” he said.
Nez said the Nation will continue to rely on those jobs and revenue as it determines how to transition into a post-coal economy.
Other public commenters, like Carol Davis, an enrolled member of the Navajo Nation who has family living near the power plant, opposed the transfer. She highlighted NTEC’s 2019 decision to buy three coal mines in Wyoming and Montana and expressed concern that the transfer could lead to continued coal burning.
NTEC currently owns 7 percent of the power plant and owns the nearby mine that provides coal to the facility. If the PRC ultimately chooses to approve the transfer in the future, NTEC would own 20 percent of the power plant starting in 2024.
In an emailed statement, PNM said the PRC’s decision makes “New Mexico’s transition to sustainable energy and a stronger diverse economy more difficult.
“We are deeply disappointed that the Commission chose to reject a coal-free PNM at the earliest date possible and to ignore the Energy Transition Act’s careful balancing of shareholder responsibility, millions in customer savings, economic aid and significant environmental benefits,” said Pat Vincent-Collawn, PNM Resources’ chairwoman, president and CEO. “The Energy Transition Act went through a rigorous legislative process to balance the interests of all parties and benefit our environment. The Commission’s actions aim to penalize the utility for complying with federal environmental standards while ignoring shareholders’ commitment to pay $75 million to relieve customers from coal obligations. This also ignores shareholders’ commitment to forgo previously authorized returns to provide a fair transition away from coal. We will need to carefully review the order rejecting abandonment to determine next steps, including a possible appeal to the New Mexico Supreme Court.”