Energy Transition Act

PNM wants customers to pay $300m to exit a coal plant

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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.

2020 elections

Voters say yes to proposed constitutional amendment to reorganize the PRC

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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.

Bob Perls

Campaign pushing to change PRC

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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.

Environmental Project

PRC OKs PNM’s San Juan Generating Station exit

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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. 

RELATED: Natural gas will play a big role in state’s energy transition

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.

2020 Legislative Session

PRC reform bill dies in Senate committee

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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.

2020 Legislative Session

PRC reform bill advances with big concerns

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A bill to make big changes to the Public Regulation Commission (PRC) passed its first committee despite lingering questions over the proposal. After a length debate, the House Energy, Environment and Natural Resources Committee passed the bill Thursday with a vote of 8-5 along party lines. Democratic Reps. Nathan Small of Las Cruces and Rep. Linda Trujillo of Santa Fe presented HB 11 to the committee. The legislation would restructure the PRC with the aim of streamlining operations and improving efficiencies that Small and Trujillo contend are holding the state back and hurting New Mexico residents.

Energy Transition Act

State Supreme Court: PRC must apply ETA to San Juan case

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The New Mexico Supreme Court put to rest some of the on-going drama about Public Service of New Mexico’s (PNM) plans for closing down the San Juan Generating Station. The Supreme Court ruled Wednesday that the Public Regulation Commission (PRC) must apply the Energy Transition Act (ETA) to PNM’s case for shuttering the coal-fired San Juan Generating Station, granting a writ of mandamus requested by a group of stakeholders, including Speaker of the House Brian Egolf, Senator Jacob Candelaria, Gov. Michelle Lujan Grisham, Navajo Nation President Jonathan Nez and others. A writ of mandamus is an order from a court to a subordinate government body or lower court to fulfill official duties required by law or correct an abuse of discretion. In December 2019, Lujan Grisham and others asked the court to force the PRC to apply the ETA to the San Juan Generating Station case. The decision comes after six months of back-and-forth between the PRC and investor-owned PNM on the applicability of the ETA on PNM’s plans for phasing out its coal-based energy generation.

Quick Reads

Legislators unveil bill to shift PRC authority to governor’s administration

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Democratic lawmakers on Tuesday unveiled legislation that would dramatically alter the structure of the state’s Public Regulation Commission, shifting nearly every division currently under its authority to a department within the governor’s administration. Although the PRC is a state commission, it is an entity not under the control of the state’s governor. Legislation proposed by state Reps. Linda Trujillo, D-Santa Fe, and Nathan Small, D-Las Cruces, would change that, and comes amid frustration from Gov. Michelle Lujan Grisham and some lawmakers over disagreement with the PRC on whether the Energy Transition Act applies to plans from the state’s largest utility to abandon and recover investments into a coal-fired power plant near Farmington. The energy act, signed into law by the governor in 2019, would allow Public Service Company of New Mexico to recover investment costs sunk into the San Juan Generating Station and requires the state to shift to zero-carbon electricity production by 2045.

Energy Transition Act

Supreme Court declines to rule on constitutionality of ETA

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The New Mexico Supreme Court denied a request to determine the constitutionality of the Energy Transition Act (ETA) on Tuesday. The decision was released without an opinion. In August, the advocacy nonprofit New Energy Economy (NEE) filed a writ of mandamus asking the Court to rule on whether portions of the ETA are unconstitutional. The writ alleges that wording in the ETA removes the Public Regulation Commission’s (PRC) regulatory oversight of Public Service of New Mexico (PNM) and proposed rate increases. New Energy Economy’s executive director, Mariel Nanasi, announced the court decision at a panel discussion in Santa Fe Tuesday evening. 

“We believe the ETA is unconstitutional, especially in regards to its eviscerating the regulatory authority [of the PRC],” Nanasi said.

Cynthia Hall

Dysfunction at the PRC puts New Mexico’s clean energy plan at risk

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Dysfunction and a lack of expertise within the New Mexico Public Regulation Commission (PRC) threaten to undermine the state’s ambitious plan to flip the switch from coal to reenewable power. 

The Energy Transition Act — the centerpiece of Gov. Michelle Lujan Grisham’s agenda to rein in greenhouse gas emissions — phases out coal, turbocharges solar and wind development, and provides funding to retrain displaced coal plant and mine workers. It has been hailed as one of the strongest climate measures in the country. 

But six months after Lujan Grisham signed the bill into law, its success appears jeopardized by the very regulatory body charged with overseeing its implementation. 

The powerful commission must vet every aspect of the plan: the closure of the San Juan Generating Station coal plant; the complex financing to pay for decommissioning and worker assistance; and every new energy project that will provide the replacement power. But when the first proposals came before the PRC in July, the commission chose to ignore the new law, leaving the state’s energy transition in limbo. The unusual move has sparked a political furor, pitting the PRC against the governor and Legislature and leading to calls for impeachment of three of the commissioners as well as a proposal by the governor to convert the PRC from an elected body to an appointed one. 

The law’s supporters say the commission’s handling of the plan reflects deep dysfunction that could slow the state’s renewables ramp-up and jeopardize aid for displaced workers. Lujan Grisham says she finds the PRC’s actions “baffling” and suspects that long-standing tensions between the commission and Public Service Co.