It was July 1, 1969. Representatives of Public Service Company of New Mexico and Tucson Gas and Electric signed an agreement to partner on the San Juan Generating Station. The first unit would be 330 megawatts and the two entities would evenly share the ownership and power generated. More than half a century later, the power plant they agreed to build is shutting down this week and for many of the activists who have fought against the coal-fired facility the moment feels a bit bittersweet. While they are excited to see the power plant that has emitted pollutants close, they say their work is not yet over.
An environment and consumer protection advocacy group said the Public Service Company of New Mexico and AVANGRID engaged in an ad campaign to mislead the public. New Energy Economy filed a motion to show cause with the New Mexico Public Regulation Commission on Friday. In a press release, the group stated that the order to show cause comes as a result of emails from confused New Mexico residents who have seen advertisements that make it look as if PNM and AVANGRID are a single company. The PRC rejected an application for the two entities to merge last year, though that decision has been appealed to the state Supreme Court. NEE has asked the PRC to investigate what it terms as a “deceptive and misleading co-branding strategy” that it alleges PNM and AVANGRID are engaging in because “they believe that the PRC’s decision is no more than a small pothole on the way to the merger that they are hell-bent on accomplishing.”
“When PNM CFO Don Tarry was deposed in another case, he accidentally referred to the merger as ‘delayed’ rather than its actual status – denied, because the PRC that we elected determined that it would not serve the public interest,” NEE Executive Director Mariel Nanasi said in a press release.
After telling the Public Service Company of New Mexico to issue rate credits so that customers are not paying for a coal plant that is being retired, state regulators are now requesting proof that the utility has done so. The New Mexico Public Regulation Commission unanimously approved an order asking PNM to show that it has complied with its order.
The rate credits should have started this month and will appear on customers’ electricity bills. They should be retroactive to July 1. For now, the average residential customer should see a $1.76 rate credit to reflect that unit one of the San Juan Generating Station is no longer in use. Starting in October, the rate credit will increase to $8.19 for residential customers after unit four, the last operating unit at the power plant, is retired.
While accusing the state’s largest electric utility of purposefully misleading regulators, the New Mexico Public Regulation Commission ordered the Public Service Company of New Mexico (PNM) to issue rate credits to customers upon the closure of each remaining unit of the San Juan Generating Station. In its order, approved by a unanimous vote Wednesday, the PRC adopted the hearing examiners’ recommended decision that was made public earlier this month. PNM will also be required to include a prudency evaluation of its decision to delay issuing bonds in its next rate case. If it is found that the delay led to increased interest rates, the shareholders could be asked to absorb the costs of the increased interest rates. Unit One of the San Juan Generating Station will close this week and Unit Four will close this fall.
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.
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.
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.
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.
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.
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.
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.