FARMINGTON — A Santa Fe-based environmental group filed a complaint on Friday with the Securities and Exchange Commission in Washington, D.C., stating that Public Service Company of New Mexico issued a misleading press release in an effort to deceive investors.
New Energy Economy has intervened in PNM's case before the state Public Regulation Commission over a plan currently under consideration by the regulatory body to shut down two units at San Juan Generating Station and replace the lost power with additional coal, natural gas, solar and other sources. The plan is designed to align the plant with federal haze regulations under the Clean Air Act.
The July 3 complaint was also filed with the state Regulation and Licensing Department's Securities Division and Attorney General Hector Balderas' office. It accuses PNM of deceit for a claim in a recent press release that ratepayers would save $300 million over six years if the PRC approves the power-replacement plan at the Waterflow plant, and recently filed coal-supply and ownership agreements with Westmoreland Coal Company.
The complaint contends that only $50 million of the savings expected between 2018 and 2021 hinges on PRC approval of the plan, which includes PNM's acquisition of 132 megawatts produced by the power plant's Unit 4. It contends that most of the savings is not dependent on the PRC's approval of acquisition of the additional coal-fired power in Unit 4.
PNM spokesman Pahl Shipley declined to address the particular claims in the complaint, citing possible litigation, but said the utility company's plan and related documents are a matter of public record.
"PNM strongly stands behind its disclosures and its statements to the public, our shareholders and our regulators and intends to vigorously defend (itself) against the claims," Shipley said in a statement on Tuesday. "Our priority is to achieve (the) best possible outcome for our customers, and this action by New Energy Economy should not divert attention away from the fact that the PNM plan is the best path forward."
Pat Vincent-Collawn — PNM chairman, president and CEO — said in the May 14 release that the opportunity to pass on those savings to ratepayers hinged on the PRC's approval of the entire plan.
"Our plan was already the lowest cost alternative, and now we have negotiated an even lower cost on behalf of our customers, if the (PRC) moves forward with our plans. It is up to the (PRC) now to determine whether customers will see these savings," Vincent-Collawn said in the release.
Mariel Nanasi, New Energy Economy president and executive director, who filed the complaint, said that $250 million of those savings would exist regardless of whether state regulators approve the plan and that the release was intended to sway the commission and the public using the promise of hundreds of millions of dollars in savings.
"The PNM news release is intentionally misleading, crafted to sway public and (PRC) sentiment," Nanasi said in the complaint. She also disputes the legitimacy of a purported coal-supply contract, the plan being the "lowest cost alternative," and approval by the state Environmental Improvement Board and the U.S. Environmental Protection Agency.
Nanasi also said in the complaint that PNM's stock price, which was $29.61 per share in January, "bottomed out" at $25.97 per share on May 14 — the date of the press release — and increased to $26.23 the following day.
"The statements ... were intended to be manipulative and deceptive devices prohibited by the Securities Exchange Act," Nanasi wrote in the complaint.
Four Corners Economic Development CEO Ray Hagerman said in a text message on Tuesday that the complaint was no more than a tactic to damage PNM.
"That is typical for NEE," Hagerman said. "If you are losing the fight in one arena, shift to another. I think the more appropriate action by the SEC would be to see if anyone connected to NEE is shorting PNM stock as it makes such ridiculous claims."
Regulators are expected to vote on the plan sometime after Aug. 1 deadline for ownership restructuring and other final agreements.