NM Supreme Court Abdicates Responsibility to Ensure PRC Holds Ratepayers Harmless

The New Mexico Supreme Court's decision last week to allow the PRC's Final order in Case No. 22-00270-UT to stand sends all regulated utilities in New Mexico a clear message: corruption pays. The PRC found that PNM's decision to invest to extend the life of the Four Corners Coal Plant in 2016 was imprudent, and yet opted to allow the company to continue collecting hundreds of millions plus interest on that amount from PNM customers for those imprudent expenses regardless. This despite the fact that the Supreme Court previously ruled that if a regulated utility makes an imprudent investment, ratepayers must be held harmless.Our appeal filed alongside the NM Department of Justice and Albuquerque and Bernalillo County Water Authority was rejected without oral argument.

The NM Supreme Court wrote that "[o]ur limited but vital role" in reviewing orders from the Commission "is to ensure that the end result of a rate order reasonably balances ratepayer and investor interests." (pg 17)

The only limitation they truly faced was their courage to use the law to protect the people from corporate exploitation. Perhaps they are taking their cues from the US Supreme Court where, under Chief Justice John Roberts, corporate interests have been allowed to run roughshod over workers, individuals and the environment in 70% of cases over the last 20 years. Had the court maintained that "harmless" means "harmless," PNM customers could have saved hundreds of millions. Instead they threw up their hands and claimed to be powerless to ensure that captive ratepayers are protected from utility malfeasance.

Now our only course of action is to continue fighting back against the growing influence of increasingly wealthy corporations operating at an increasing distance from the people their decisions effect. Especially the nearly half of New Mexican's that don't earn enough to afford the basic necessities of life.

BCP CONTINUES TO FLOUT PRC LEGAL REQUIREMENTS

On Friday we filed a Motion for Reconsideration after our Motion to Compel was rejected; the ruling inexplicably ignored years of precedent at the PRC to declare any questions about other BCP owned businesses "third party discovery." As you may recall, we filed a Motion to Compel when BCP failed to answer our discovery questions about violations and penalties levied against other businesses owned by the investor group. This history is critical to understanding how the company would operate in New Mexico.The Hearing Examiner appears to have bought BCP's claim that its practices at other businesses owned by the private equity investor firm are not relevant to this case because BCP is simply the investor owner, not the manager or operator. Not only is this absurd claim false - the company's own website states that it has decades of experience "operating and investing in infrastructure services," but it flies in the face of common sense. When you have a controlling stake in a company, you are going to oversee operations to make sure you get a financial return. That's a basic premise of ownership – it requires oversight and management.

The PRC has a statutory duty to evaluate the qualifications and fitness of any company that wants to own a regulated monopoly utility in New Mexico, which requires a full and complete picture of that company's history and practices. The Hearing Examiner's decision sets a terrible precedent that, if allowed to stand, will hamstring the ability of the public, intervenors and the PRC itself to investigate the practices of any large company that wants to own a utility in New Mexico.

BCP's failure to respond to discovery with transparency and honesty was followed by flouting the procedural rules in the case repeatedly when the company filed 13 different supplementary responses to multiple parties in the case just one, two and three days before our final testimony was due on Friday. This unprofessional and unethical behavior indicates either incompetence or malicious gamesmanship. Experts in the case were unable to review and incorporate responses to these supplementary filing in their testimony, and the Hearing Examiners will therefore be unable to determine how new information fits into the case record. Intervenors have jointly filing a Motion for Sanctions. 

What we did learn from our expert Jesse George, who represents a utility customer advocacy group in Louisiana? When BCP took over Entergy and renamed it “Delta utilities” in Louisiana in July, his group received a flood of complaints about improper billing and limited payment options, including the following examples: 

• One woman received two bills, one right after the other, a week apart, for two different amounts;

• Despite having testified at the commission that payment options would remain the same, Delta now uses a “Paystar” platform that has much more limited payment options and flexible customer payment options have been eliminated; and

• Despite the use of smart meters customers have been improperly billed for in-person meter reading charges.

  
  

We can all empathize with the hassle involved in trying to correct these kinds of errors with customer service representatives! 

Most importantly, BCP has revealed that the company estimates a $130 to $185 million acquisition premium. That represents the amount they are willing to pay above the value of New Mexico Gas Company - an amount they are certain can be recouped through increased gas rates paid by New Mexican families.