SAN JUAN GENERATING STATION UNIT 1 WILL FINALLY SHUT DOWN TOMORROW!
Today the PRC ordered PNM to issue a rate credit upon the closure of the San Juan Generating Station (SJGS) - an average 10% refund will appear on all ratepayers bills beginning in October. The Commission voted unanimously to adopt the Hearing Examiners’ recommended decision in full, and to adopt New Energy Economy’s exception, requiring PNM to record all costs incurred in this proceeding to ensure ratepayers are held harmless for costs related to PNM’s illegal scheme.
As Commissioner Joseph Maestas put it during the hearing, PNM’s plan:
To allow PNM to double bill its customers, its ratepayers, the very people of New Mexico, and to deprive them of savings that in these trying economic times could make a crucial difference in their lives just to provide a few more percentage points of value to their shareholders or maybe provide them with year-end bonuses. This is exactly that. So unfair and unjust that it shocks the conscience.
According to the Financing Order drafted pursuant to the Energy Transition Act (ETA), PNM was to issue a rate adjustment at the time of the San Juan Generating Station (SJGS) closure on June 30, 2022 for Unit 1 and September 30, 2022 for Unit 4. PNM decided to continue charging ratepayers for SJGS operational costs despite the fact that SJGS will no longer be “used or useful,” a violation of the Public Utility Act. PNM made this unilateral decision, notifying no one, not the Commission or parties, of its plan to collect upward of $94M/per year from ratepayers and potentially to double collect on its undepreciated investments in the plant by including them again in the securitized bonds promised under the ETA, if or when it finally decided to issue them.
All parties to the San Juan abandonment case opposed their audacious greed.
New Energy Economy and other parties argued that:
PNM’s new plan violates the ETA and the April 1, 2020 Financing Order
PNM should abide by the representations it made in its Application and in the testimony it provided in the original hearings in this case
PNM should be required to issue the rate credits to remove the units’ costs shortly after the abandonments, and
PNM should be required to make $28.2M to coal workers and impacted communities immediately upon the abandonments.
The Commission agreed with these arguments, and further ordered that “the prudency review in this case should include a compliance filing in this docket for a review of the prudence of PNM’s change made after the Financing Order that delayed bond issuance beyond the dates of the San Juan abandonment of Units 1 and 4. Two benchmark dates should be established, to be able to compare the date the interest rates that exist at the times of abandonment compared to the dates of actual bond issuance. Benchmark date #1 should be set at 30 days following the abandonment of Unit 1. Benchmark date #2 should be set at 30 days following the abandonment of Unit 4. Such compliance filings should be filed in this docket no later than October 15, 2022.”
PNM was granted $360.1M on a silver platter by the legislature through the ETA. Was that enough? No. PNM wanted more - $134M more. Proponents of the ETA promised customer savings, but PNM wanted to keep those savings for itself. Now their entire ETA boondoggle is at risk because of their own misconduct.
Not only did PNM act unreasonably, and in violation of the Commission's Order, but it hired a public relations firm for $7500 to discredit challengers, including New Energy Economy - who it named specifically - to counter expected claims that PNM was taking $134M from ratepayers. PNM worried about the risk of looking like they were creating a corporate shell game - and they were!
We’ve been advocating and litigating for more than a dozen years for this moment. Back then we predicted that closing coal was cheaper and better for the environment and our health. Today‘s PRC-ordered victory closes another PNM coal unit at San Juan and the average ratepayer will be enjoying a 10% credit per month on their bill beginning in October because solar and wind are less expensive than fossil fuels. The PRC unequivocally chastised PNM for its concealment, for its dishonesty, for its "cheating": its time to invest in community care and repair and reap the benefits of community owned renewable energy instead of continued reliance on a corrupt monopoly.