July 7, 2022

With San Juan Generating Station Unit One retired, rate credits are pending NM Supreme Court decision

Hannah Grover

The San Juan Generating Station is pictured Monday, April 19, 2021, in Waterflow.

Should the New Mexico Supreme Court uphold a state regulators’ order requiring the largest electric utility in the state to issue rate credits following the closure of each remaining unit of the San Juan Generating Station, those rate credits would likely begin during the August billing cycle.

Raymond Sandoval, a spokesman for the Public Service Company of New Mexico, said that the Public Regulation Commission requires the rate credits to start in August and be retroactive to July 1, when Unit One of the San Juan Generating Station was no longer online.

Sandoval said Unit One was taken out of service around 7:30 p.m. June 30.

He said he gets updates on his phone from the San Juan Generating Station when things happen. When the unit was taken out of service, he received an update that he described as “bittersweet.” He said he personally believes that climate change is happening and that retiring the San Juan Generating Station was the right thing to do.

Unit Four, the sole remaining unit, will be retired at the end of September.

The PRC issued the order to provide customers with rate credits at the end of June out of concern that ratepayers could end up paying for maintenance and operation of a shuttered power plant for years after it closes.

PNM immediately filed a motion for rehearing and a request to stay the order with the PRC. In its filings, it asked for a fast response time to the request to stay. The PRC denied that, stating that PNM’s motion to stay is an important motion that raises questions that will impact public interest.

“It requires deliberation by the Commission and further requires that all the parties to have [sic] sufficient time to file a thoughtful response,” the PRC stated in its order denying PNM’s motion.

One of those parties is New Mexico Affordable Reliable Energy Alliance, which quickly responded in opposition to PNM’s request and said it needs the full 13 days allotted under state law to properly respond to PNM’s motion.

Two days after the PRC issued its order requiring rate credits, PNM asked the state Supreme Court to stay the rate credit and to rule on the case.

Sandoval said that PNM believed it was required to issue the rate credits starting July 1, which was less than 48 hours from when the order was issued. He said the PRC has since stated that PNM has until August to issue the credits.

One of the questions that the NM Supreme Court must decide is if PNM exhausted all administrative remedies before asking the high court to stay the PRC order. Some PNM critics, including Mariel Nanasi, the executive director of New Energy Economy, argue that the utility has not.

In its filing with the Supreme Court, PNM argues that further exhaustion of administrative relief is not appropriate.

“Because the Commission ordered PNM to implement a rate credit before the Commission will consider the Emergency Motion, the Court should find that further efforts to exhaust administrative remedies to obtain an immediate stay from the Commission would be futile,” PNM wrote in its filing.

The PRC’s order comes as the commission has expressed increasing frustration with the state’s largest utility and its handling and interpretation of the Energy Transition Act.