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Trade Groups Want Out of PNM Agreement

Plan for replacing power from coal remains under fire from public as PRC hearings continue

January 20, 2015, 8:00 pm

Two energy organizations are withdrawing from an agreement about the Public Service Company of New Mexico’s power replacement plan, spinning more controversy into the plan's progress through state Public Regulation Commission review process.

An independent hearing examiner has been listening to testimony for nearly three weeks, and the public has packed comment time, mostly with complaints.

Faith groups who attended today’s hearing at the PRC are expressing frustration that the examiner limited their group’s comments to three minutes.

Joan Brown, executive director of New Mexico Interfaith Power and Light, tells SFR she spent weeks organizing representatives from different faith groups to speak in favor of what they call "climate justice."

“It's frustrating that I was the only one allowed to speak from our group. Climate change is the greatest moral, ethical and spiritual issue of our time,” says Brown. “We need to do something now.”

Rev. Talitha Arnold, a Yale Divinity School graduate and minister at United Church of Santa Fe, is upset she wasn’t allowed to speak at all.

“When Sister Brown finally got to speak one of the commissioners (she later identified as Patrick Lyons) was reading the newspaper,” says Arnold. “I doubt he was even listening. It was so unprofessional.”

PRC Chief Financial Officer Matthew Lovato tells SFR public comment was originally scheduled one day on Jan. 5, “any additional time is at the discretion of the examiner.”

But, during the first week of hearings, the examiner set aside an hour for public comment every morning before expert testimony. By the end of the first week, Lovato says, the examiner determined to limit comments to 30 minutes at every Monday, or today, since the PRC was closed yesterday in honor of Martin Luther King Day.

Lovato says the public is encouraged to send written comments to commissioners.


Earlier today, Renewable Energy Industries Association of New Mexico and New Mexico Independent Power Producers filed paperwork to withdraw from an agreement co-signed by three other trade groups, the New Mexico Attorney General’s office and PNM last fall.

Adam Baker, an attorney representing Renewable Energy Industries Association, writes that they originally signed on to the agreement because the stipulations outweighed the risks of litigation, but a month later, the group learned PNM had miscalculated the fuel costs for coal at its San Juan Generating Station.

Baker suggests the estimated $357 million error means there is now a stronger case for including more renewable energy sources, like wind and solar, in PNM’s energy portfolio.

The group is also concerned that PNM’s proposal to charge a “solar access fee” to offset its electric grid infrastructure is “punitive.” When compared with promises that the power company would extend its customer-owned solar program, the separate rate filing "smacks of bad faith," says Baker.

New Mexico Independent Power Produces Executive Director Robb Hirsch writes in an affidavit that his group commends PNM for reaching an agreement with the Environmental Protection Agency to shut down two units at its coal-generated plant, but now wants a more balanced energy portfolio.

“We believe there is an opportunity hidden in this challenging case about our electrical generation future and New Mexico should seize it,” Hirsch writes.

Earlier this month, the Farmington Electric Utility System recommended city officials withdraw from their own prior agreement with PNM to purchase 65 megawatts of coal-generated power from the coal plant due to “significant degradation” in Unit 4 which may impact performance reliability.

Farmington officials and the trade associations are also concerned about what they call “unfavorable economics” due to uncertainty of future coal supplies at San Juan, after Australian mining company BHP Billiton signaled they intend to shutter its operation at the end of 2017.

Under the PRC rules, Renewable Energy Industry Association and New Mexico Independent Power Producer’s original agreement with PNM and the AG would only be binding if it had already been approved by commissioners, who are not scheduled to vote on the case until after expert testimony concludes and independent Hearing Examiner Ashley Schannauer issues findings and recommendations.

Mariel Nanasi, president of a New Energy Economy, a nonprofit that's been fighting the plan, tells SFR she plans to urge state Attorney General Hector Balderas to also withdraw from the agreement originally signed by then-Attorney General Gary King.

“PNM’s own emails reveal that there are cheaper and more reliable energy options available in New Mexico,” she says. “The attorney general needs to focus on what’s best for consumers. PNM's attempt to prop up coal is unraveling. The risks and liabilities associated with an unreliable aging coal plant are simply not worth it especially compared with affordable solar and wind.”

SFR contacted Balderas’ office, but Special Projects Director James Hallinan says Balderas’ staff would not comment on the matter today.

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