Global supply chain challenges may make it hard for the state’s largest utility to meet electricity demands next summer and the New Mexico Public Regulation Commission is concerned that these could include unanticipated problems.
These supply chain challenges were sparked by the COVID-19 pandemic, which had impacts like slowing manufacturing and changing consumer demands. This has delayed a couple major solar projects in New Mexico that are intended to replace the electricity from the San Juan Generating Station. The PRC is concerned that this could lead to challenges meeting electricity demand next summer after the San Juan Generating Station is scheduled to stop providing power to the state’s largest electric utility. Commissioner Joseph Maestas raised the topic during the regular meeting on Wednesday. Maestas brought it up in connection to solar projects that are intended to replace the San Juan Generating Station and have been delayed.
Public Service Company of New Mexico and Avangrid have informed the New Mexico Public Regulation Commission of a criminal investigation in Spain that names several executives of Avangrid’s parent company, Iberdrola. This comes as the PRC is weighing a merger case that would allow Avangrid to acquire PNM. A document filed in the merger docket on Thursday states that officials in Spain are looking into potential criminal activities connected to Iberdrola. The filing states that Spanish law does not allow government employees to provide services to private companies. However, a government employee may have provided services to 21 companies including Iberdrola.
While the Community Solar Act does not go into effect until June 18, investor-owned utilities have been receiving applications, and at least one of the utilities has expressed uncertainty about how to process such applications because rules regarding such projects will not be completed until next year. The New Mexico Public Regulation Commission, which is tasked with regulating utilities and community solar programs, has until April 1, 2022, to issue the final order adopting rules for community solar projects. Citing the uncertainty that utilities are facing with the applications, the PRC is issuing a notice to the state’s three investor-owned utilities explaining that the current interconnection rules will remain in place until the commission rules otherwise and that community solar project applications that have been received will not receive any priority consideration. “Neither the utilities nor the applicants are certain as to what the pending rulemaking means in regards to the status of those applications,” said PRC General Counsel Russel Fisk during the meeting on June 15. A community solar array is a small facility with at least 10 subscribers who receive at least a portion of their electricity from the array.
The New Mexico Public Regulation Commission has received its first grid modernization application since the state Legislature passed the Energy Grid Modernization Roadmap during the 2020 session. Southwestern Public Service Company filed an application for grid modernization on June 4 and, during the Tuesday PRC meeting, the commission’s counsel Judith Amer informed members that it was the first application of its kind. The Energy Grid Modernization Roadmap provides a way for regulated utilities to recover the cost of investing in grid modernization through an approved tariff rider or changes in the base rates. SPS’s proposal calls for recovery through an approved rider. SPS plans to install an advanced metering infrastructure, which will allow for real-time tracking of customer’s electrical usage through the use of smart meters.
State regulators asked the state’s largest utility to defend a past decision to continue leasing shares of a nuclear power plant as it now asks regulators to approve replacing that electricity with renewable sources. Public Service Company of New Mexico (PNM) has filed to replace the energy it gets from leased shares of the Palo Verde Nuclear Generating Station with renewable sources. The filing came earlier this month and the New Mexico Public Regulation Commission issued an order beginning the process, which was unanimously approved on April 21. The order requires PNM to file additional testimony regarding unresolved issues from a 2015 case. These unresolved issues are about a decision to acquire additional leases and extend its leases in the Palo Verde facility.
In November 2020, PNM announced it would leave the coal-fired Four Corners Power Plant by the end of 2024, seven years earlier than planned. The accelerated exit will bring an end to PNM’s coal assets in New Mexico two decades ahead of the clean energy mandate set forth in the state’s Energy Transition Act of 2019.
Pat Vincent-Collawn, PNM Resources’ chairman, president and CEO, said at the time the move was “a major step in our vision to create a clean and bright energy future and achieve our industry-leading goal of emissions-free energy by 2040.”
PNM currently owns 13 percent of the plant’s two operating units, representing 200 megawatts (MW) worth of energy generation. PNM is also engaged in a coal supply contract with the Navajo Transitional Energy Company (NTEC). PNM had initially planned to exit the facility in 2031, when its coal supply contract ends. Instead, PNM and NTEC have reached an agreement through which PNM will pay $75 million to NTEC to end its coal contract by December 31, 2024 and then transfer its ownership of the plant to NTEC for $1.
PNM filed its abandonment and securitization application for the plant with the Public Regulation Commission (PRC) earlier this month.
Voters appear to have approved a constitutional amendment proposal that would make sweeping changes to the state’s Public Regulation Commission. Constitutional amendment ballot initiative #1 would reduce the number of commissioners on the state’s Public Regulation Commission from five to three and would make those positions appointed by the governor rather than elected by voters.
The amendment received 436,760 votes at the end of the night, representing 55 percent of total votes counted, while 351,208 voters, representing 45 percent of the vote counted so far, opted against the amendment. These totals are likely to change in the coming days as more absentee and provisional ballots are counted. Commissioners Jeff Byrd, Theresa Becenti-Aquilar, Valerie Espinoza and chairman Steve Fischmann opposed the amendment; while commissioner Cynthia Hall supported the amendment.
The amendment was the result of a joint resolution that passed the state Legislature in 2019. In New Mexico, voters must approve any alteration to the state’s constitution.
Some elections can devolve into popularity contests. But one issue on the ballot in New Mexico will be whether or not one of the state’s key regulatory bodies should be made up of elected or appointed officials.
Currently, the New Mexico Public Regulation Commission is made up of five elected officials, each representing their own area of New Mexico. But voters will have the chance to decide whether or not to change the state’s constitution and make the commission a three-member body, with commissioners appointed by the governor.
At least one mailer sent out to voters does not seem to explicitly advocate for one side or another, but does frame the issue as professionals versus politicians.
“Look for constitutional amendment #1 on your ballot in the fall!” the mailer reads.
It also compares health experts guiding Gov. Michelle Lujan Grisham’s decisions during the COVID-19 pandemic and states that the amendment “would require real experts with defined credentials to oversee our utilities, and these professionals would be prohibited from having any financial interest in any public utility.”
The PRC, which is independent from the governor’s office and the legislature, has been the target of scrutiny from other elected officials for years, and even more so since the Legislature passed what is now known as the Energy Transition Act, a step away from the state’s reliance on coal powered energy.
The mailer that rhetorically asks voters, “qualified professionals or politicians?” was paid for by a group called Committee to Protect New Mexico Consumers. The New Mexico Secretary of State’s office does not have a record of such a group registering as a political committee, but a spokesman for the office said the next deadline for groups to register is not until October.
Bob Perls, a former New Mexico lawmaker and sponsor of a 1996 constitutional amendment that created the PRC, said he thinks the push to change how the commission is made up was not well thought out. Like all New Mexico constitutional amendments, this one started as legislation.
The Public Regulation Commission voted unanimously Wednesday to approve PNM’s application for abandoning the San Juan Generating Station and using securitization bonds to recover some of the investment PNM will lose in the process. The decision, which was widely expected, came after the state Supreme Court ordered the PRC to apply law changes made by the Energy Transition Act towards PNM’s exit of the coal-fired plant. The ETA, which requires all the state’s utilities to transition to “net zero” electricity generation by 2050, enabled PNM to use securitization as a mechanism to help pay for its transition away from coal. But PRC commissioners were previously hesitant to apply the new law to PNM’s plans for exiting the San Juan Generating Station. PNM announced its plan to close the plant in 2017, but didn’t submit the application to do so until after the ETA was in effect.
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The PRC’s decision was widely lauded by a coalition of clean energy and environmental justice advocates who say the securitization will reduce customers’ utility bills, provide financial support to the coal-dependent communities in San Juan County, and help create new clean energy jobs.
A proposal to restructure the Public Regulation Commission died in the Senate Corporations and Transportation Committee after a two-plus hour debate. The bill was tabled by a vote of 5-4. Democratic Reps. Nathan Small of Las Cruces and Linda Trujillo of Santa Fe presented HB 11 to the committee Tuesday afternoon. Small and Trujillo told the committee the bill would help address staffing issues at the PRC and make the commission more efficient.
