Second, PNM’s proposal for San Juan includes adding 132 megawatts from California owners in one of the remaining San Juan coal units. PNM will pay zero for this capacity but proposes to value it at $26 million, creating another windfall for PNM. Again, PNM would charge customers for this and add its profit to this amount, more than doubling it over time. The PRC hearing examiner said no in his recommended decision to the PRC. Again, kudos to the hearing examiner.
Third, PNM’s proposal for San Juan included $90 million for pollution controls. We can all applaud PNM’s sudden interest in limiting pollution. However, $60 million of these costs are for controls that are neither necessary to meet regulatory requirements nor to reduce pollution, simply because they could be achieved through $1 million in operating improvements. So, here is another $60 million windfall for PNM, plus the profit through 2053. PNM has once more chosen an approach that unnecessarily pushes our rates to the sky, simply to increase their profits. Again, the PRC hearing examiner said no in his recommended decision. Once more, we can applaud the work of the hearing examiner.
In each of these cases, the hearing examiner wrote his recommended decision to stop PNM’s windfall profits. The PRC commissioners have not yet voted on these issues. When they do, hopefully they will support the hearing examiner’s position and disallow the attempts by PNM to use financial sleight of hand to gain windfall profits.
These are only three examples from the San Juan retirement case. PNM even proposes that its profit margin be increased, which would generate an additional $10 million per year. The PRC should recognize that PNM residential rates have increased by 57 percent and commercial rates by 50 percent from 2008 to 2014. In this identical period, PNM’s profits have increased by 460 percent! The PRC should stand firm against PNM’s attempts to realize unearned profits and increases in electricity rates that are not deserved.
Dexter Coolidge is a Santa Fe resident and former (retired) senior vice president at Blue Cross Blue Shield.