The second evidentiary hearing for the Replacement Power case is coming to a close and we want to share an update of what's happened so far.
PNM'S REPLACEMENT POWER HEARING SUMMARY
The New Mexico Supreme Court ordered that the hearing could proceed as scheduled but that the Public Regulation Commissioners could not take any action in the hearing due to New Energy Economy's pending request for their recusal.
The Supreme Court will hear our arguments on November 9th at 1PM Join Us for a Rally & Invocation before oral argument (corner of Don Gaspar & Alameda in Santa Fe).
Some amazing admissions have come from PNM, the Attorney General's Office, and the signatories to the agreement with PNM.
1) PNM and the signatories to the Supplemental Stipulation have admitted that a plan that includes a complete 4 Unit shutdown of San Juan Generating Station would have the equivalent cost (or less) than their current plan to shut down 2 units and purchase more coal and nuclear.
This is very significant because the law states that when resources are similar in cost, the utility shall prefer those plans that "minimize environmental impacts".
2) PNM's own witnesses admit inconsistencies in their energy forecasts in different cases (a fact first pointed out by NEE expert witness David Van Winkle). In an earlier rate case, PNM claimed that there would be flat or declining energy demand in the coming years. In this case, however, they claimed there would be a 20% increase in energy demand. The increase in demand forecast was necessary for them to justify their requests for more base-load resources--especially more coal.
3) NEE expert witness Ronald Lehr, a former Colorado Public Utilities regulator, pointed out the importance of having a competitive all resource Request for Proposals (RFP) process for replacement power that would enable the Commission to assess the best options for the ratepayers, based on actual competitive bids. Without the assessment of an independent evaluator, we are forced to rely on PNM's assessment of the options. Requests For Proposals increase customer and market confidence in the resource chosen, which is good both for ratepayers' pockets and the New Mexican economy.
4) Signatories to the agreement with PNM have praised the Supplemental Stipulation for creating a "pathway opportunity" in 2018 to close San Juan in 2022. However, they were betrayed by PNM's first witness, Gerard Ortiz, who testified that the acquisition for more coal from San Juan Generating Station would be a request to "continue indefinitely". Why would would we want to lock in coal til 2053 when there are renewables availables for less cost and less risk? PNM acknowledged that if, in 2018, PNM thought keeping San Juan running was the most cost-effective, that would be their proposal. In today's testimony, PRC staff corroborated that the plan to acquire additional shares in San Juan is an indefinite one.
5) Both PNM and the Attorney General testified that the cost of PNM's coal and nuclear plan for an average residential customer will be $10.29 annually starting in 2018. This they said was relative to the Federal Implementation Plan ("FIP") but PNM and the Attorney General's office couldn't seem to agree on what the "FIP" actually meant, essentially admitting that it was a meaningless and unclear reference point of comparison.
David Van Winkle has testified that the actual cost to ratepayers from PNM's plan will begin at $77 a year and will cause rate shock as more and more risks come due.
Stay tuned for more. We have to submit briefs immediately after the hearing ends. Then the Hearing Examiner will issue his recommended decision. We are uncertain who will vote on his recommendation.