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The "Billion Dollar Bungle" - PNM admits to errors of more than a billion dollars in potential cost

to consumers

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.

The errors:

  • 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.


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