PRC sues to stop publication of contract details

A state district judge on Friday denied the New Mexico Public Regulation Commission’s petition for a temporary restraining order to stop The New Mexican from publishing the contents of contracts on coal supply, restructuring and other matters related to the San Juan Generating Station.

The newspaper received the documents early this week as part of the response to a public records request. The paper in early July requested all emails between Public Service Company of New Mexico and the five commissioners during the first six months of the year.

Posted: Friday, August 7, 2015 1:45 pm | Updated: 6:56 am, Tue Aug 18, 2015.

A state district judge on Friday denied the New Mexico Public Regulation Commission’s petition for a temporary restraining order to stop The New Mexican from publishing the contents of contracts on coal supply, restructuring and other matters related to the San Juan Generating Station.

The newspaper received the documents early this week as part of the response to a public records request. The paper in early July requested all emails between Public Service Company of New Mexico and the five commissioners during the first six months of the year.

The elected regulators are considering a plan by the state’s largest utility to close down two of the four coal-burning units at the massive power plant in northwestern New Mexico. The company’s proposal has stirred controversy, partly because critics say it doesn’t go far enough toward shifting from reliance on coal to cleaner sources of energy, as well as disagreements over costs.

The New Mexican’s attorney, Victor Marshall, said an emergency hearing before Judge David Thomson of Santa Fe was conducted via telephone late Friday afternoon in a conference call that included Marshall and the commission’s general counsel, Michael Smith.

While the judge declined to take immediate action on the commission’s request, he set a hearing on the matter for Thursday, Aug. 13.

The New Mexican is examining and analyzing the contents of the documents.

Marshall said he had been contacted by a lawyer for PNM as well as a lawyer for BHP Billiton, the world’s largest mining company, headquartered in Melbourne, Australia. Billiton owns a coal mine near the power plant. Marshall said both PNM and Billiton intend to intervene in the court case to support the commission’s effort to prevent publication of the documents.

Billiton is in the process of selling the coal mine to the Colorado-based Westmoreland Coal Co. Among the documents the commission accidentally gave the paper is the sales agreement between Billiton and Westmoreland.

“The lawsuit by the PRC and PNM raises a whole lot of constitutional questions under the First Amendment,” Marshall said. “It also raises common-sense questions. PNM is a public utility. How do they keep contracts and the cost of the contracts, which will be passed on to the consumer, confidential? This idea of secrecy is absurd.”

Marshall also said, “In a broader perspective, it seems that the regulators and the utility get together behind closed doors to cut the public out of the process.”

One commissioner said Friday that she does not support the commission’s move to pre-empt publication of documents by The New Mexican. “I would have handled it differently,” said Valerie Espinoza, D-Santa Fe. Espinoza, who has been critical of PNM in the San Juan case, said “I believe PNM should disclose these documents.”

Mariel Nanasi, executive director of the nonprofit New Energy Economy — which is an intervener in the San Juan case — also supports making the documents public. “The decision in this [regulatory] case will lock in energy resources for decades to come and it is indispensable to have sunlight on the costs, health and climate consequences before New Mexicans get stuck in the dark with PNM’s coal and nuclear choice,” she said Friday.

Last month, The New Mexican editorialized, “The people who pay PNM’s rates and who breathe the air affected by coal-burning plants need to know all the details. It’s true, of course, that PNM is a business and would like to keep some of its contracts cloaked in secrecy. … However, the impact of this decision on New Mexico is too important to be conducted out of the public spotlight.”

On July 31, a records custodian for the commission sent a reporter for The New Mexican an email saying the documents were ready on a compact disc. Because the reporter was on vacation, he did not pick up the disc until he returned to work on Aug. 4.

The next day, a lawyer for the commission told the reporter that some documents on the disc shouldn’t have been released. When the paper declined to return the disc, Smith, the commission’s general counsel, filed an emergency petition for a temporary restraining order, a preliminary injunction and a permanent injunction against the newspaper.

The petition, filed electronically late Thursday, asks the judge to restrain The New Mexican “from making any use of or disseminating the contents of confidential documents inadvertently released” to the paper.

In February, the commission and all parties who have intervened in the San Juan case agreed to allow PNM to keep secret the proposed contracts with coal companies as well as the restructuring contracts with PNM’s partners in the power plant.

“The commission’s protective order would in effect be vacated if [The New Mexican] were not required to relinquish possession of the confidential documents,” the petition said. “Moreover, according to the document that was submitted by PNM in support of its motion for the protective order … harm to PNM would ensue. In addition, the public interest would not be served by allowing [The New Mexican] to retain the confidential documents.”

The commission said in its petition that publication of the documents could cause PNM to raise its rates.

“If other players may be able to attack or harm PNM because of unfair access to information, and if the cost to PNM rises, such costs will likely be borne by consumers,” the petition states. “Placing costs on the consumers as the result of an inadvertent clerical error is antithetical to the public interest.”

PNM proposes to close two coal-burning units at the San Juan plant near Farmington in 2017. Under the plan before the Public Regulation Commission, the utility would replace the lost capacity with more coal-fired power from another unit at the plant, as well as from natural gas, nuclear power and other energy sources.

The proposal has drawn criticism from conservation and clean-energy groups that say it doesn’t include enough renewable energy sources. PNM maintains that the San Juan plant would burn about 49 percent less coal than it does now.

The initial coal supply contract, as well as other proposed agreements were emailed on May 1 to commissioners, certain commission staff, PNM officials and interveners.

Among those documents are bid solicitation documents related to the coal supply contract, a reclamation services agreement, and a coal combustion residual disposal contract with the San Juan Coal Co.

Contact Steve Terrell at sterrell@sfnewmexican.com. Read his political blog attinyurl.com/roundhouseroundup.


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