July 17, 2023

Commissioner recuses himself from PNM rate case

New Mexico Public Regulation Commissioner Pat O’Connell announced last week that he is recusing himself from hearing arguments and ruling on the latest Public Service Company of New Mexico rate case.

This decision comes after the advocacy group New Energy Economy called on O’Connell to recuse himself from the case based on his past work at PNM, including testimony he provided on behalf of PNM.

O’Connell’s recusal centers around the Four Corners Power Plant and past investments into pollution controls at the facility. NEE and other environmental advocacy groups say PNM should have ended its involvement in the power plant rather than spending the money on pollution controls and entering into a new coal supply agreement.

This was one area of contention in PNM’s past rate case and was not resolved. Instead, state regulators at the time left the question of whether the investments were prudent for future debate.

In June, the hearing examiners in the current rate case issued an order that will lead to the “examination of Four Corners prudence issues raised” in the past rate case, O’Connell wrote in his voluntary recusal notice. He said he provided expert testimony about the prudence of those investments.

In March, PNM filed a motion to remove or dismiss the Four Corners prudence issues. That motion was denied in the June order that led to O’Connell’s recusal.

In its March motion, PNM argued that the prudency question had already been litigated in a 2021 case in which the utility sought to transfer its ownership shares in the coal-fired power plant to Navajo Transitional Energy Company.

But the hearing examiners found that the prudence issue was not resolved in the 2021 case.

“The Hearing Examiner declined to answer this argument and noted that time constraints in the proceeding—which was focused on abandonment and securitization and where many issues were vigorously litigated about those subjects—precluded full development and treatment of the prudency question,” the June order states.

Instead, the hearing examiner in the 2021 case recommended that state regulators adhere to the original plan of considering the prudency of continued use of the Four Corners Power Plant during the rate case.