Home electric bills would rise by as much as 9 percent under a state Public Regulation Commission decision Wednesday on Public Service Company of New Mexico’s latest rate request.
But the chief operating officer of PNM, which wanted a 15.8 percent increase, said she expects the state’s largest utility will appeal the decision. And New Energy Economy, a renewable-energy advocacy group that intervened in the case, also announced plans to appeal the decision, but for different reasons.
The commission, contrary to the recommendation of its hearing officer, decided on a 3-2 vote to make customers pay for part of the company’s purchase of nuclear power from an Arizona plant.
The decision granting PNM about half of what it sought marks the culmination of a battle that has gone on for years. The five-member Public Regulation Commission in 2015 rejected a previous rate proposal after about a year of hearings, saying the utility didn’t offer enough evidence to justify the higher rates. The current request was filed about a year ago.
“We appreciate that the commission’s order corrects some aspects of the hearing examiner’s recommendation related to the Palo Verde Nuclear Generating Station,” PNM’s chief executive officer, Pat Vincent-Collawn, said in a written statement Wednesday.
“We are, however, disappointed that the commission discounted the value of these long-term, carbon-free assets and did not approve recovery of the required [anti-pollution] technology for the San Juan Generating Station,” Vincent-Collawn said, referring to a coal-fired plant in northwest New Mexico that provides much of the power delivered to PNM customers. “After we receive the final written order, we expect to file an appeal with the New Mexico Supreme Court.”
Meanwhile, Mariel Nanasi of the advocacy group New Energy Economy said of the commission, “This PNM-friendly body voted for profits and further rate hikes over the rule law and against the people. There is no factual, legal or moral basis for the PRC to grant approval for more coal or nuclear [energy]. We will appeal.”
Commissioner Patrick Lyons, R-Cuervo, told a reporter the increase for residential customers would be 8 percent or 9 percent. Steve Michel of Western Resource Advocates, a clean-energy advocacy group that intervened in the case, said the increase could be lower.
Hearing examiner Caroline Glick last month recommended a $41.3 million revenue increase for PNM — about a third of what the utility sought. That would have meant a rate increase of about 6 percent.
But the commission voted 4-1 to reject Glick’s recommendation as written. Commission Chairwoman Valerie Espinoza, D-Santa Fe, cast the dissenting vote. The body then voted 3-2 to adopt an amendment by Lyons to put most of PNM’s costs for buying power at the Palo Verde nuclear plant into the company’s base rate. Commissioners Lyons, Karen Montoya, D-Albuquerque, and Lynda Lovejoy, D-Crownpoint, voted for the plan. Commissioners Espinoza and Sandy Jones, D-Williamsburg, voted against it.
Espinoza said after the vote, “I couldn’t support making ratepayers pay for unnecessary nuclear risk.”
Lovejoy said the vote was the most difficult she has had to cast.
The hearing officer said in her 280-page recommendation last month that PNM failed to show that the Palo Verde purchase was the utility’s most cost-effective choice. “The prudent investment theory provides that ratepayers are not to be charged for negligent, wasteful or improvident expenditures, or for the cost of management decisions which are not made in good faith,” she wrote.
A spokeswoman for the Sierra Club said in a news release Wednesday that the commission’s action was “good news and bad news.”
“While PNM got its way on making consumers pay for its poor decision to reinvest in coal, the commission prevented PNM from punishing ratepayers with significantly higher service fees, and we customers won’t have to foot the bill for the company’s unnecessary San Juan Generating Station expenses,” Ramona Blaber wrote.
Michel of Western Resource Advocates said that, like the Sierra Club, he was happy the commission’s order followed Glick’s recommendation that PNM not be allowed to include in its rate base $52 million for installing pollution controls at the San Juan Generating Station near Farmington.
Glick wrote that PNM submitted no evidence that the pollution controls resulted in environmental benefits or workplace safety. Michel called installing the controls a “scam.”
Though the company’s CEO said the controls are “required,” Michel argued in a recent opinion piece published by The New Mexican that the only reason that project appeared in PNM’s operating permit “was because, according to the air regulator, PNM asked the regulator to put it there.” The system, Michel said, “wasn’t needed to meet any air regulation or law that the New Mexico Environment Department enforces.”
Commission member Jones argued at Wednesday’s hearing that the commission should encourage companies to go “above and beyond” government anti-pollution requirements.
Several Farmington-area Republican legislators attended the hearing to back PNM’s proposal. State Sen. Bill Sharer, R-Farmington, said, “Volcanoes put more stuff in the air than nuclear plants. … We’re shutting down industries that pay for our schools and we’re not doing anything about volcanoes.”
At the hearing, Paul Gibson, who recently organized a group called “Retake the Roundhouse,” told the commission his group would be watching the vote and would try to defeat those commissioners not acting in the public's interest.
Montoya lost her primary race to fellow Democrat Cynthia Hall, who criticized Montoya’s closeness with PNM. Montoya told Gibson, “I am no longer threatened by you. I will vote my conscience.”
She said most of the money used against her in her primary came from Santa Fe, not her own district.