January 12, 2015
Billion Dollar Bungle:
In PRC case, PNM admits to errors of more than a billion dollars
in potential costs to consumers
SANTA FE, NM – In its replacement power case at the Public Regulation Commission, PNM has now admitted to errors and omissions that total more than a billion dollars. Had those “mistakes” not been exposed by New Energy Economy and other opponents of PNM’s plan, consumers would likely have been on the hook for more than a billion extra dollars over the next 20 years.
PNM’s initial December 2013 proposal to the PRC included 78 MW of additional coal from San Juan coal plant. A forecasting mistake forced PNM to boost the amount of new coal to 132 MW – increasing the cost of the plan by $222 million.
In August 2014, opponents of the plan discovered that PNM had failed to include $532 million in ongoing capital expenditures at Palo Verde nuclear plant and San Juan coal plant.
In late November 2014, opponents exposed a $366 million error in PNM’s coal cost calculations, which PNM has since referred to as an “inaccuracy.”
Together, these errors add up to $1.12 billion dollars in mistakes – all of which PNM has admitted. The result is that PNM’s plan is now proven to cost more than either New Energy Economy’s renewable energy-based alternative, or a scenario that shuts down the San Juan coal plant entirely.
Attached are exhibits and testimony documenting the mistakes and the cost comparisons of PNM’s proposal and alternate scenarios.