PRC: Energy Transition Act doesn't apply to PNM's plan to close San Juan Generating Station

• PRC says abandonment case was ongoing when law passed, therefore the ETA does not apply.
• PNM argues that it filed the documents after the new law went into effect and the ETA does apply.

FARMINGTON — A decision by the New Mexico Public Regulation Commission during its July 10 meeting in Santa Fe has created an argument about whether the Energy Transition Act applies to Public Service Company of New Mexico’s filing to stop receiving power from the San Juan Generating Station.

The PRC voted 4-1 in favor of hearing PNM’s arguments to abandon the power plant in a case docket that was opened in January, prior to the Legislature passing the Energy Transition Act. Meanwhile, it will hear discussion about replacement generation resources in a new case docket.

Commissioner Valerie Espinoza said this would allow the commission more time, because the timeline mandated in the Energy Transition Act would not apply.

“It gives us the amount of time that we need to make the best decision possible,” she said about using the January case docket.

Energy Transition Act:Energy bills signed into law by New Mexico Governor Michelle Lujan Grisham

PNM argued that the Energy Transition Act applies because it went into law on June 14 and PNM filed documents for closing the power plant, financing and replacement resources on July 1.

“We were surprised by the PRC’s decision to consolidate our July 1 comprehensive abandonment, replacement and financing filing with the limited docket the PRC opened back in January,” PNM spokesperson Raymond Sandoval said in an email statement today. “However, we do not believe this changes anything and are confident that the provisions of the Energy Transition Act, that went into law on June 14, applies to our comprehensive July 1 filing.”

The meeting can be viewed online at nmprc.nm.state.us.

The Energy Transition Act passed after PRC opened an abandonment case docket

The Energy Transition Act emerged following PNM’s announcement that it would be closing the San Juan Generating Station in 2022. The legislature hoped to avoid rate increases for PNM customers, provide economic assistance to impacted communities and create progressive renewable portfolio standards for utilities throughout the state.

The legislation create the ability to use a financing mechanism known as securitization to recover investments into coal-fired power plants like the San Juan Generating Station. Some of that money from securitization would go to assisting displaced workers and impacted communities. 

History:How San Juan Generating Station went from powerhouse to possible closure

The law also set a strict timeline for the PRC to make a decision. The law states that the financing request would automatically be granted if the PRC does not make a decision within six months, however the PRC can extend that timeline to nine months if needed.

The docket opened in January required PNM to file for abandonment of the San Juan Generating Station by March 1. PNM then filed a writ of mandamus with the New Mexico Supreme Court. The court issued a stay, meaning PNM was not required to file that case on March 1.

However, that stay was lifted on June 28 and the writ of mandamus was dismissed.

PRC Counsel Michael Smith said using the case docket that opened in January would allow the commission to argue that new laws do not apply to the case. He said that argument will immediately become an issue in the case.

Commissioner Steve Fischmann expressed concerns about using the docket from January to avoid the shorter timeline requirements in the Energy Transition Act.

He said the case could get bogged down arguing about whether the Energy Transition Act applies to the case.

“I’m afraid that we’ll just get into a sinkhole,” he said.

Fischmann was the sole commissioner to vote against using the case docket from January.

Becenti-Aguilar requests PNM host public meetings at four Navajo chapter houses

Commission Chairwoman Theresa Becenti-Aguilar criticized PNM for not having a public meeting in the Four Corners.

When the commission issued its order in January, she requested public meetings in the Four Corners area.

“It’s been six months,” she said. “I have not heard a word from PNM, so I imagine that my recommendation was taken very lightly.”

She reiterated that request during the July 10 meeting and specified that there should be public meetings in Nenahnezad, Tsé Daa K'aan, San Juan and Shiprock chapters as well as conversations with the Navajo Nation Council about PNM’s plans.

In the email, Sandoval provided a list of upcoming public stakeholder meetings.

He included a July 9 meeting on the list. That meeting was initially advertised as a public stakeholder meeting but was changed to a meeting for only the employees at the San Juan Generating Station. The next meeting will be with Pueblo stakeholders on July 17 followed by a public meeting on July 18 in Albuquerque.

Meetings:PNM turns July 9 public meeting on San Juan Generating Station into employee-only session

The first public meeting in the Four Corners will be on July 30 in Farmington. That meeting will be followed by a meeting with Navajo Nation stakeholders on July 31.

Sandoval’s email stated that the company has reached out to Navajo Nation to set up meetings at chapter houses.

PRC grants three-month extension for El Paso Electric rate case

In other business, the PRC granted a three-month extension for El Paso Electric to file a rate case. The rate case will determine what customers pay for electricity.

When El Paso Electric sold its seven percent share of the Four Corners Power Plant, the New Mexico Public Regulation Commission stipulated that the utility file a rate case in 2017. That rate case was later delayed until late July 2019.

More:El Paso Electric celebrates coal-free status

Commissioners and staff expressed frustration with El Paso Electric for not providing much information about why the extension is needed.

“I would grudgingly agree that we could grant the request, although it sort of annoys me that there’s no affidavit,” said Commissioner Cynthia Hall.

El Paso Electric had asked for a one-year extension, but Hall and other commissioners said they did not support the full one-year extension.

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.

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