NM Public Regulation Commission Orders Utilities to Justify Utility Ownership of Replacement Power in Advance of San Juan Abandonment
If you are a frequent reader of New Energy Economy news, then you know we’ve been working for years to break New Mexico ratepayers free from the chokehold that investor owned utilities (IOU) have us locked into.
We do this work in order to hasten a just transition to renewable energy and because utilities like PNM or El Paso Electric (EPE) cannot be permitted to continue rigging the system and overcharging us for electricity that has been historically generated from fossil fuel and nuclear resources.
IOU’s have rigged the system to guarantee they 1) own the energy resources; 2) that they are built on utility owned land; and 3) are able to charge you and me higher costs for that electricity in order to protect their ever rising profits for Wall St. shareholders - PNM profits rose 652% between 2008-2018!
This has been the story we work to change.
Now, it appears that our efforts regarding competitive procurement for energy resources by PNM and other IOUs is finally starting to bear fruit. The New Mexico Public Regulation Commission (PRC) voted 5-0 yesterday to issue a Bench Request. The PRC’s Bench Request, which cannot be ignored, compels each Investor Owned Utility to answer a series of 10 detailed questions about how they justify acquiring such utility-ownership restrictions which we argue are anti-competitive and violate the IOU’s responsibility to the public to provide the most cost effective energy resources among feasible alternatives.
As you recall we fought against EPE’s anti-competitive Request for Proposals (RFP) that only allowed EPE-owned (AND EXPENSIVE) solar. And we won before this new Commission in January 2019.
More recently, on May 6, we argued against PNM’s bid rigging RFP – immediately disqualifying IPPs and steering the selection toward PNM ownership in the case before the New Mexico Supreme Court. To no one’s surprise PNM’s RFP resulted in their more expensive ownership of the solar project.
A recent study by Retail Energy Supply Association revealed that, from 2008 – 2018, competitive retail markets created a 25.7% favorable difference (lower cost to customers) in the annual weighted average prices than those in vertically integrated markets with little or no choice.
From the Bench Request Order: The Commission emphasizes “the importance of fairness in bidding and the need for setting standards for competitive procurements of the most cost effective resource among feasible alternatives.”
Ring a bell? This is precisely what New Energy Economy has been asking for for years. Very cool to see the Commission actually regulating on behalf of the public to ensure lower costs, a competitive market, and corporate accountability.