You'll recall that we had major concerns about the ETA when it was being debated.
It didn't actually require the closure of coal.
It circumvented regulatory standards like prudence review and would be used by PNM to pursue full recovery for their irresponsible reinvestments in Four Corners (and Palo Verde) -- even though that investment had already been found imprudent by the Commission. A $300 million dollar bill PNM is seeking to recover from New Mexicans through this case.
It was hard at that time because there was a lot of speculation and assertions made based on the language of the law - but no evidence of how it would be interpreted and applied.
Now we are in the thick of the tangles of that law and how it is interfacing with preceding and outstanding cases - and unfortunately, what we predicted is coming to pass:
THE ETA DOESN'T CLOSE COAL - BUT TOGETHER, WE CAN!
The evidentiary hearing last week yielded undisputed evidence that NTEC WILL use the voting interests in the plant which PNM is paying them to take -- to continue the burning of coal! In fact WRA expert witness Brendan Baatz testified that not only does the PNM/NTEC contract for the proposed sale include a clause preventing PNM from voting for early closure of the plant, important because early closure requires unanimous agreement from all owners, the seasonal operation agreement also provides that once a decision to eventually close is unanimously made, the plant will remain open for an additional 4 years!!!!
If approved, PNM’s sale of their FCPP shares essentially ensures that coal continues to burn at Four Corners until 2027 or longer.
Watch the clip below
THE PLANT SHOULD BE CLOSED, COMPREHENSIVE CLEANUP SHOULD BE PERFORMED, AND IMPACTED COMMUNITIES SHOULD BE COMPENSATED FOR 60 YEARS OF HEALTH & ENVIRONMENTAL DAMAGES! Impacted community groups have testified that about 89 million tons of coal ash have been produced at the Four Corners coal plant, which is roughly 1.6 million tons per year since 1963, and that if that ash was stacked on an NFL football field, it would reach 7.9 miles high.
That waste has contaminated ground water, creating a toxic waste zone for miles around. Meanwhile the company has blamed their failure to release millions in promised impacted community funds on New Energy Economy's appeal of the ETA, claiming the law may be struck down. Our appeal specifically states that we don’t challenge that portion of the law, and extensive cross examination from multiple intervenors has confirmed that PNM had and continues to have the option to safely pay out those promised funds to support impacted community groups but refuses to do so. This is deplorable behavior!
Melissa Russell from YUCCA (Youth United for Climate Crisis Action), a Diné youth advocate from the Navajo Nation, spoke of the pain of watching loved ones health be compromised and the need to stop trading the future and instead move to a just transition that includes cleanup and support for impacted community members.
PRC staff got right to the heart of the matter, compelling PNM's witness to disclose the central issue with their flawed abandonment application: the proposed deal between PNM and NTEC claims automatic recovery of all undepreciated investments ($300M) from ratepayers under the auspices of the Energy Transition Act, while flying in the face of the acts alleged purpose - to reduce emissions and accelerate the transition from coal.
PNM IS TRYING TO USE THE ETA TO MAKE NEW MEXICANS PAY FOR THEIR IMPRUDENT INVESTMENTS - $300 MILLION AT FOUR CORNERS
The second problem we identified with the ETA is that PNM inserted language that would allow them to securitize imprudent costs and foist them onto ratepayers. Now our fears have been realized. PNM witness Fenton reluctantly admitted to Mariel that in fact it is PNM's position that under the ETA they are entitled to securitize all undepreciated investments, regardless of prudence.
CONTINUING THE BURNING OF COAL... MAKING CUSTOMERS PAY FOR COSTS DEEMED IMPRUDENT... IS PNM PURE EVIL?
No. They are just a Wallstreet funded corporation doing right by their shareholders -- which means extracting wealth from New Mexicans and Diné communities, offloading their messes onto captive ratepayers, communities, and tax payers, and maximizing returns for their executives and shareholders.
We know that the real reason for PNM's FCPP sale to NTEC is to fulfill the deal with Iberdrola/Avangrid which forbids coal asset ownership from a subsidiary it owns. ("Four Corners divestiture" is specifically identified as one of the requirements included in the merger contract, Section 6.19.) PNM has attempted to maintain the fiction that the Four Corners Abandonment application they filed is "completely separate” from the merger case. Sometimes the truth bubbles up! Under cross examination PNM's witness Sanchez slipped up and admitted the truth. Twice.
Freud·i·an slip /ˌfroidēən ˈslip/ noun - an unintentional error regarded as revealing subconscious feelings.
UNITED IN OUR OPPOSITION
If the abandonment application does not close coal (it in fact guarantees that coal will continue burning when utility experts agree that it is highly likely to close earlier than scheduled in 2031!), and if the abandonment application forces ratepayers to pay $300M for PNM management mistakes, then the argument for a "net public benefit," the legal standard, is without merit.
From PRC Staff to New Energy Economy and Sierra Club, from New Mexico Attorney General to Bernalillo County, we are united in opposition against PNM's attempt to sell their Four Corners coal to NTEC and foist their toxic assets, $300M, onto ratepayers. PNM never should have invested in Four Corners coal in 2016 (PNM failed to perform an honest or timely financial analysis) and we should be held harmless from the imprudent acts of PNM's management. That's the outcome we're all fighting for. Stay tuned for our final recap when the hearing wraps up at the end of this week!