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New Mexico Gas Company ratepayers win protection from explosive hydrogen and unfair rates

Yesterday the Hearing Examiners upheld our position in the New Mexico Gas Company (NMGC) rate case, recommending approval of the stipulated agreement we reached in settlement along with all other parties to the case.

New Energy Economy's witness Dr. Mark Jacobson, a Professor of Civil and Environmental Engineering at Stanford University, has a 33-year career as an atmospheric scientist, energy scientist and engineer. His career has focused on better understanding air pollution and global warming problems, evaluating proposed solutions to these problems, and developing clean and efficient solutions to them. Dr. Jacobson's research proved that hydrogen produced from fossil fuels is more dangerous than burning fossil fuels directly, resulting in increased emissions and costly delays in implementation of truly renewable energy resources. He has also demonstrated definitively that a 100% solar, wind and battery storage grid is possible internationally and here in New Mexico, resulting in a net benefit for health, economic growth, jobs and reduced climate impacts.


We at first opposed the Greenhouse Gas Reduction initiatives in NMGC's application, but ultimately signed on to the settlement agreement when NMGC agreed to withdraw its investments in fossil fueled hydrogen and the associated $2.9 million in charges to ratepayers. NEE supports the Stipulation because Paragraph 22 of the Stipulation contains NMGC’s agreement to withdraw Phase 2 of its hydrogen blending pilot project, including all costs associated with the proposed Phase 2 pilot project.

Our testimony included not only the dangers to the climate, but also the danger posed to end users and ratepayers from blending hydrogen gas, a highly flammable gas with tiny, escape prone molecules, into our "natural" gas distribution system. The explosion depicted above is likely one of the first of many such accidents we can expect as hydrogen experimentation continues. After all, even NASA was unable to contain hydrogen leaks from the tank on its most recent Artemis 1 mission, resulting in a delayed launch and millions of dollars in losses. The future for NM lies not in blending hydrogen into our gas system, but in updated residential building codes to mandate electric heat pumps for heating and cooling systems in all new construction and major remodeling projects. On November 4th Washington State was the first to pass this forward looking policy statewide!


NMGC and several of the intervenors, including New Energy Economy, entered into a Memorandum of Understanding (“MOU”) (which was not made part of the Stipulation) to work together to draft reasonable and appropriate New Mexico legislation to introduce in the 2023 New Mexico legislative session to ameliorate the energy burden on low-income customers, including language authorizing the Commission to review and approve low-income utility rates. The signatories to the MOU also agree to discuss strategies intended to reduce the energy burden of NMGC’s low-income customers, including through Mortgage Finance Authority’s Energy$mart program, federal weatherization programs, and Community Energy Efficiency Development Block Grant projects.

The Parties negotiated and agreed on the revenue, return on equity and debt/equity structure. The end result of the Stipulation is a base revenue increase of 19.3 million (a 9.68% rate increase) versus the requested increase of 40.7 million (a 20.8% increase) in NMGC’s original proposal, and an increase in the Residential access fee from $12.00 to $12.40 (not to $14.25 as the company asked), producing just and fair rates for NMGC customers.

The Stipulation agreements regarding GHG emissions and NMGC programs and projects, as well as future cooperative efforts among the parties, benefit NMGC, ratepayers, and the public interest. We look forward to the PRC's final ruling in the case.


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