Hearings continue in the rate case this week with daily cross examination of expert witnesses from all parties, and new information coming to light. The above short exchange encapsulates PNM's attitude towards ratemaking in New Mexico. While discussing PNM's proposed increase to their Return on Equity Hearing Examiner Ryan asks PNM's witness whether the return on equity charged to customers should take into consideration the high levels of poverty in New Mexico. His answer? "Well the honest answer is No," explaining further that return on equity is necessary to attract investors and customer hardships have no bearing on PNM's 10.25% "required" rate of return. In fact, there is no evidence that PNM is having trouble attracting investors. They are actually over-earning on the currently allowed Return on Equity, even being forced to return some money to ratepayers as a result.
The witnesses testimony focused exclusively on value for shareholders, but the Commissioners are charged with ensuring "just and reasonable" rates that balance the needs of ratepayers with shareholders.
Is it "just and reasonable" when PNM charges us to cover the cost of PNM CEO's $9 million salary per year, lawyers for PNM making $700 to $1000 per hour, and the testimony from their $430,000 expert that reveals that the post-hoc analysis PNM created to try to rationalize their imprudent investments in the Four Corners Power Plant artificially reduced actual expenses by $40 million per year?
NO!
PNM has never proven that its investment in Four Corners was cost effective, even though they invested approximately $1.3B in that plant. The Supreme Court has already held in another case that failure to perform an alternatives resources analysis is a fundamental flaw, and is imprudent per se.
When asked to quantify the impact of proposed penalties for PNM's imprudent expenditures, PNM calculates that New Energy Economy's remedy will reduce revenues by 32.1%. Now that would come closer to justice!
Public comment in the case can be made in person or via zoom during bi-weekly open meetings on Thursdays (instructions here), or you can continue to send written comment using the link below until the Commissioners issue their decision. Your participation is critical to achieving a just outcome in this case.
SHOW UP ON FRIDAY TO SHOW THE COURT THAT THE PUBLIC OPPOSES AVANGRID'S BUYOUT OF PNM
Oral argument at the NM Supreme Court (237 Don Gaspar Avenue, Santa Fe, NM) will take place Friday from 9:00AM to 10:00AM. Arrive early to be seated. If you can't come in person, proceedings can be viewed online here.
The PRC and New Energy Economy will be arguing that the Public Regulation Commission's decision to reject the merger was based on overwhelming evidence and sound regulatory principles, and that the decision is well within the PRC's purview as the regulatory body tasked with ensuring that the public interest is served.
In case you missed it, last week a grassroots consumer-protection group called New Mexicans Against Avangrid announced the release of a new report detailing new and scathing evidence against Avangrid and its parent company, Iberdrola.
The content of this report speaks for itself, especially the timeline of scandals and damning findings and fines from regulatory agencies that have taken place in 2021, 2022 and 2023. The report makes clear that our former elected NM PRC Commission made the right decision when it found, unanimously, that the merger with Avangrid would not be in the public interest. The report details harm to Avangrid/Ibedrola ratepayers in the form of efforts to maximize rate increases - requesting $680 million across their utilities in 2023 alone! - egregious and harmful billing errors that continue to cause heartache, stress and financial harm to customers, and aggressive and illegal collections tactics for which the company was found guilty and fined.
The report further describes how the company touts itself as a climate champion even as its largest shareholders include the petro-state Qatar and Blackrock, the largest private funder of fossil fuel infrastructure in the world, and the funding it provides to climate denying politicians, front groups and powerful industry lobbying organizations like the Edison Electric Institute and the American Gas Association that continually block climate action policies and regulations across the nation.
We hope that you will read this report, that you will share it with your friends, and that you will go so far as to email this report to any journalists or New Mexico legislators that you know.