Environmental Project

PRC rejects argument that state law requires approval of full decoupling

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Asan increasing number of people install solar panels on their houses or make energy efficiency upgrades, the amount of electricity utilities sell may go down. This can impact the utility’s revenue streams, even as costs of maintaining and upgrading infrastructure remain. One way to address this is known as decoupling and the state’s largest utility, Public Service Company of New Mexico, argued that a 2019 amendment to the state’s Efficient Use of Energy Act requires the New Mexico Public Regulation Commission to approve applications for full decoupling. Decoupling is essentially a mechanism that removes the incentive for a utility to sell as much electricity as possible by reducing or eliminating the need to sell a certain amount of power to cover the fixed costs like maintenance and upgrades. During its Wednesday meeting, the commission unanimously rejected PNM’s argument, instead adopting a decision recommended by Hearing Examiner Anthony Medeiros.

Quick Reads

PNM contracts for helicopter flights to inspect infrastructure for wildfire mitigation

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The state’s largest electric utility entered a contract with a company to perform aerial surveys of transmission and distribution systems as part of a wildfire mitigation effort. This comes after several large, catastrophic wildfires in the western United States have been linked to electric utility infrastructure. Public Service Company of New Mexico (PNM) announced on Tuesday that it has hired EDM International, Inc. to perform inspections and inventory of transmission and distribution systems in the PNM service territory. These surveys will involve flying a helicopter equipped with cameras above power lines. The high-resolution images captured during the process will allow PNM to evaluate the vegetation as well as rights-of-way and infrastructure integrity, according to a press release from the utility.

Environmental Project

Utilities appeal PRC decisions to the state Supreme Court

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As utilities race to meet renewable energy targets set forth in the Energy Transition Act, two of the state’s investor-owned utilities have asked the New Mexico Supreme Court to review decisions the New Mexico Public Regulation Commission has made in cases that they say will impact their transition. The Public Service Company of New Mexico appealed the final orders in both the Four Corners Power Plant ownership transfer and the Avangrid merger. Southwestern Public Service Company appealed the final order in its renewable portfolio standard case in which the PRC rejected its request for a financial incentive to retire renewable energy certificates early so that it could reach renewable energy targets early. PNM filed the appeal on the Four Corners Power Plant transfer on Dec. 22.

Environmental Project

PRC rejects PNM/Avangrid merger

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The New Mexico Public Regulation Commission essentially denied the merger between Avangrid and Public Service Company of New Mexico on Wednesday.. The commissioners voted unanimously on Wednesday to reject the stipulated agreement, following a recommendation from the PRC hearing examiner that the potential risks to customers outweigh the benefits. “This whole deal to me kind of boils down to promises versus actual performance,” Commission Chairman Stephen Fischmann said, highlighting Avangrid’s past performance in New England where it owns several utilities and has faced more than $60 million in fines from regulators. PNM and Avangrid promoted the merger as an opportunity to transition faster away from fossil fuels through access to Avangrid’s better credit ratings as well as benefits associated with Avangrid’s scale. Avangrid’s large size could lead to lower costs for equipment because the company would be able to buy in bulk.

Environmental Project

PRC commissioners have concerns over Avangrid/PNM merger, as companies defend

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Officials from Public Service Company of New Mexico and Avangrid say a pending merger would help the state’s largest electric utility reach renewable energy targets at a faster pace. The two companies hosted a press conference on Thursday following the New Mexico Public Regulation Commission’s discussion the previous day regarding a hearing examiner’s recommendation that the commission deny the merger. 

Three of the five commissioners stated during the Wednesday meeting that they oppose the merger and believe that the potential harms to the customers outweigh the benefits. Commission Chairman Stephen Fischmann, who was the first commissioner to express opposition to the merger, said that the main reason to reject it is that Avangrid has an “absolutely horrible record of running U.S. utilities.”

Commissioners Cynthia Hall and Theresa Becenti-Aguilar joined Fischmann in voicing opposition, which is an unusual move for the PRC, as the merger was not scheduled for a vote and the commission must still hear the exceptions in the case presented. 

Related: Hearing examiner says potential harms outweigh benefits in PNM/Avangrid merger

During the Thursday press conference, Attorney General Hector Balderas criticized the commissioners for voicing their opposition prior to the official vote and prior to hearing all the evidence. “Based on the commissioners’ statements yesterday, I am a little concerned that they seem to have implied as jurors that they’re leaning one way or another in terms of making their decision,” he said. During Thursday’s press conference, Balderas also spoke about the importance of transitioning away from fossil fuels and said that the merger could help New Mexico achieve the goals set out in the 2019 Energy Transition Act.

Environmental Project

PRC hearing examiner recommends approval of PNM’s Four Corners shares transfer to NTEC

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While environmental advocacy groups are concerned that transferring Public Service Company of New Mexico’s 13 percent ownership share in the Four Corners Power Plant to Navajo Transitional Energy Company will lead to continued or increased emissions, a hearing examiner for the New Mexico Public Regulation Commission recommended last week that the state regulators approve that transfer. The hearing examiner, Anthony Medeiros, recommended that the state regulators approve PNM’s application to transfer its shares in the coal-fired power plant to NTEC in 2024. About a year ago, PNM announced the plans to sell its 13 percent share to NTEC, a Navajo Nation enterprise, for $1 and to pay NTEC $75 million to assume its obligations under the coal supply agreement. The PNM shareholders are paying the $75 million. PNM claims that transferring its ownership shares to NTEC will save customers $30 million to $300 million.

Environmental Project

Hearing examiner says potential harms outweigh benefits in PNM/Avangrid merger

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A hearing examiner for the New Mexico Public Regulation Commission says the harms of a proposed merger between the state’s largest electric utility and a global utility giant outweigh the benefits. Hearing Examiner Ashley Schannauer issued his recommendation that the PRC deny the merger between Public Service Company of New Mexico and Avangrid, the U.S. subsidiary of the Spanish firm Iberdrola in a report released on Monday. In October 2020, Avangrid announced plans to buy PNM’s parent company, PNM Resources. PNM Resources also owns Texas New Mexico Power and the Texas utility regulators have already approved the merger. Related: Connecticut-based utility company agrees to buy PNM Resources

In his 445-page report, Schannauer outlines a variety of potential harms that could occur should the merger be approved.

News

Cause of San Juan Generating Station cooling tower collapse remains unknown

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While the cause of the collapse of a cooling tower at unit one of the San Juan Generating Station has not yet been identified, Public Service Company of New Mexico has provided the New Mexico Public Regulation Commission with some more information regarding the event. Following the collapse, the PRC issued a notice of inquiry into the incident, which occurred in late June, and opened a docket. PNM filed a response to questions raised in the notice of inquiry on Aug. 16 and the commission discussed the response during the weekly meeting on Wednesday. In its response, PNM stated that the cause of the collapse has not yet been identified.

News

San Juan Generating Station taken offline after cooling tower collapse

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Unit one of the San Juan Generating Station was taken off line last week after a cooling tower collapsed, sources familiar with the incident told NM Political Report. The cooling tower is necessary to operate the unit and, unless it is repaired, the unit will not be able to produce power for Public Service Company of New Mexico and Tucson Electric Power. The two utilities share ownership of the unit and each receives 170 megawatts of power. No one was injured during the June 30 collapse, which came almost exactly one year before the state’s largest utility plans to end operations of the power plant. The plant was idle on the morning of July 6 and neither unit one nor unit four were producing power.

Environmental Project

Critics say PNM, Avangrid merger could hurt ratepayers, environment

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Government entities, utilities and watchdog groups say a merger between Public Service Company of New Mexico and Avangrid could harm both ratepayers and the environment unless protections are included. These entities filed testimony in a New Mexico Public Regulation Commission case evaluating the merger. This merger is subject to the PRC approval as well as approval from the Federal Energy Regulatory Commission. PNM’s parent company, PNM Resources, is seeking to merge with Avangrid, a U.S. subsidiary of renewable energy giant Iberdrola, which is based in Spain. The PRC hearings related to the merger are scheduled to start on May 3 and testimony has been filed expressing a variety of concerns.