Update 6/28/19: PRC Commissioners voted 4-1 on 6/26 to grant New Energy Economy’s Motion [PDF] and will allow oral argument to be heard on Wednesday, July 17 in Santa Fe.
Join Us Wednesday, July 17
NEE argues before PRC that Ratepayers should be held harmless for PNM’s imprudent investment in Palo Verde Nuclear
Where: 1120 Paseo De Peralta, Santa Fe, 87501 When: July 17, 2019 at 1:00PM
BE ACTIVE - REGISTER YOUR PUBLIC COMMENT [Link to Petition Letter HERE]
Thanks to all our great supporters who have already delivered over 500 letters to the Public Regulation Commission concerning PNM's imprudent investment in dangerous and expensive nuclear energy.
The new Public Regulation Commission prides itself on protecting consumers and holding the regulated utilities to their legal burden of proof. Can you send them a letter, today?
My daughter has a framed poster that has hung in her room over her bed for twenty years: it bears three pictures of a blossoming iris in various stages of opening, with the words “CONSIDER THE ALTERNATIVES” underneath the images. Why as a parent would we want to instill in our children the value of thoughtful evaluation? Because, with the capacity to discriminate between different choices and label them appropriately, they will be better equipped to use that information to guide their thinking and behavior, and this leads to wise decision-making.
Teaching a child that the evaluation of options is a technique for proper discernment is not merely good parenting, it is a core value. A core value that has now been institutionalized as law as a result of the New Mexico Supreme Court’s unanimous decision last Thursday which we believe will have far-reaching implications.
What did the High Court decide?
First and foremost, that Public Service Company of New Mexico (PNM) was “imprudent” – the legal standard applied to a utility in energy resource procurement cases.
Why was PNM’s purchase of nuclear (64 Megawatts) and nuclear lease extension (114 Megawatts) imprudent?
Because PNM did NO financial analysis before it made the decision; and
Because PNM failed to “reasonably examine alternative courses of action.”
As stated in the Supreme Court Opinion, which is now the LAW: “The prudent investment theory provides that ratepayers are not to be charged for negligent, wasteful or improvident expenditures, or for the cost of management decisions which are not made in good faith.”
In other words, ratepayers are not expected to pay for management’s lack of honesty or unsound business judgment.
The Joint Petition to Investigate PNM’s Planned Purchase of Expiring Leases, that we filed on Earth Day, and have recently written to you about, are the exact same 114 MW nuclear leases that the Court found to be imprudently procured last week.
In 2016, the PRC’s own Hearing Examiner found PNM’s nuclear purchase and lease extension to be imprudent and recommended that the purchase and lease extension be excluded from serving PNM’s New Mexico ratepayers. She found that PNM could only include the nuclear repurchase and lease extensions in customer rates in a subsequent rate case filing, if, and only if, PNM could prove that it was the most cost effective resource among available alternatives to meet customers’ needs.
The old Commission found PNM’s nuclear purchase and lease extension to be imprudent as well, but overturned the Hearing Examiner’s finding that the nuclear (and all its associated costs) should be excluded from PNM’s New Mexico energy portfolio. Instead the old Commission allowed the nuclear to serve customers but, in an attempt to protect ratepayers, held that PNM could not charge customers for any decommissioning costs.
Now, the Supremes ruled PNM to be imprudent for its nuclear investments, but overturned the Commission’s remedy (or punishment) for imprudence because it held that PNM was not provided “notice of potential permanent disallowance of all recovery for decommissioning costs.”
So what’s next?!
The entire case is remanded to the PRC for review.
Here is our position that we hope makes sense to you:
DISALLOWANCE OF FULL COST RECOVERY for the purchase of nuclear (64 Megawatts) and nuclear lease extension (114 Megawatts) because the purpose of a prudence review is to hold ratepayers harmless from any amount imprudently invested.
Will you send a letter to the PRC right now, and let them know you agree?
Should nuclear be allowed to serve PNM’s New Mexico electricity consumers? No. It would be allowable if, and only if, PNM is able to show that the total Palo Verde nuclear investment (178MW) is the “most cost effective resource among feasible alternatives.” In order to get their way on the nuclear purchase, PNM must first be compelled to evaluate nuclear on a consistent and comparable basis with solar and wind and storage and take into consideration cost risk for liabilities, such as a nuclear waste that is radioactive for thousands of years; intensive water consumption; and more.
This new Public Regulation Commission prides itself on protecting consumers and holding the regulated utilities to their legal burden of proof.
Check out the media coverage of our victory in the NM Supreme Court:
Santa Fe New Mexican New Mexico Supreme Court invalidates PNM rate order Steve Terrell | May 17, 2019
Santa Fe Reporter Should PNM or ratepayer foot the nuclear bill? Leah Cantor | May 17, 2019
Associated Press Court: New Mexico regulators must reconsider utility case Susan Montoya Bryan | May 16,2019
Albuquerque Journal Supreme Court sends case regarding Palo Verde Nuclear Station back to the PRC Rick Nathanson | May 16, 2019