Today New Energy Economy and Citizens for Fair Rates and the Environment (CFRE) jointly filed a Motion to Dismiss PNM’s January 8, 2021 Application for Abandonment of the Four Corners Power Plant (“FCPP”). Why? Because their application illegally transfers their ownership stake instead of actually closing the dirty coal plant. We moved to dismiss on the grounds that the application:
Violates the provision of the Energy Transition Act (ETA) that stipulates “the commission shall prevent carbon dioxide emitting electricity-generating resources from being reassigned, redesignated or sold as a means of complying with the standard." The application for abandonment includes the sale of PNM’s ownership interest in the FCPP to another entity, the Navajo Transitional Energy Company, LLC (“NTEC”).
Violates not only the letter of the ETA, but also the clear intent and purpose of the law. PNM’s Direct Testimony acknowledges that the proposed sale of FCPP will allow NTEC and the other remaining owners of that plant to continue operating the full capacity of that plant until at least 2031, if not longer.
Fails because it is incomplete, and doesn’t give notice or provide testimony about whether PNM’s sale to NTEC produces a net public benefit. Commission case law requires the applicant to show that the abandonment and transfer or sale produces a net public benefit.
To add insult to injury, PNM’s Application requests PRC approval of PNM’s recovery from customers of an estimated $300 million as ETA-defined “abandonment and other energy transition costs,” which include an estimated $271.3 million in undepreciated investments in the FCPP, plus other costs. That $271 million includes investments made in 2016 to pay for upgrades at the plant, investments that New Energy Economy opposed as imprudent.
Hearing Examiners agreed with our position, but unfortunately lobbyists convinced the Commission to defer a decision on those imprudent costs until the next rate case. Not coincidentally, PNM continued to defer a formal rate case filing until after the passage of the ETA, under which they are now claiming they are entitled to 100% of proposed abandonment costs without PRC review. Given the ETA Amendments now pending before the legislature to rectify the ETA's removal of PRC oversight over abandonment costs, the timing of their NON abandonment application begs suspicion.
We're not surprised the application didn't demonstrate the net public benefits of burning coal till 2031 while charging ratepayers for the privilege!