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When regulators are meeting with utilities behind closed doors, who is protecting New Mexicans?


On May 30th, we were forced to file a Motion to Disclose Ex Parte Communications at the Public Regulation Commission (PRC) in the rate case because the Commission never filed its ex parte communications (discussions with one party in a case to the exclusion of everyone else, including importantly, the public), as is required by law. To date the Commission has not responded to our Motion. We also served a request for Inspection of Public Records Act (IPRA) regarding all the ex parte communications, including phone calls, with PNM and Avangrid/Iberdrola. We are now in partial receipt of those IPRA responses and we noticed that missing from the first Notice of Filing of Ex-Parte the Commission filed in April in the merger case there were a number of email "forwards" to the Commissioners themselves, and their responses and voicemails. Hence the original Notice proved incomplete.

Additionally, we asked PNM in discovery (questions we are allowed to ask a party) for their ex parte communications with the Commission, but they responded it wasn't ex parte because their regular communications over the 3-month period "was in the context of settlement." (They made other equally bogus arguments.) So yesterday we filed our Motion to Compel demanding from the Hearing Examiners that they force PNM to tender discovery that is relevant to the case. The law holds that evidence of ex parte communications are relevant!

Those of you who have long followed New Energy Economy know that the PRC is tasked with regulating the behavior of monopoly utilities and the rates they charge us. When an issue is before the PRC for decision, the law requires it to act as an unbiased tribunal, balancing the rights of ratepayers against the profits of a utility’s shareholders. It must function within the same ethical constraints as judges do.

In April lawyers for the "new,” politically-appointed PRC filed notice that PRC commissioners had exchanged extensive, private communications with Avangrid and PNM regarding cases before it, without the knowledge of the public or the other parties to those cases. These communications resulted in the PRC’s agreement to abruptly “reconsider” whether Avangrid, an out-of-state energy conglomerate with an abysmal customer service record and poor performance, should be permitted to acquire PNM. The previous Commission, elected by the people, unanimously rejected the “merger” as not in the public interest. We do not know what other agreements may have resulted from the Commission's private communications.

Such “ex parte” communications are forbidden by statutes, rules and the constitutional requirement that a tribunal comply with fundamental principles of due process of law when it makes decisions in contested cases.

Instead of transparency and due process, we have regulated utilities whispering into the tribunal's ear about the outcome they prefer. The PRC is supposed to be regulating utilities, not conspiring with them. These communications represent a fundamental break in the integrity of the judicial system and demonstrate bias from the very Commissioners appointed to protect the public.

LISTEN AND SEE FOR YOURSELF

The impact of the ex-parte communications is made clear when a Commissioner repeated the argument of Avangrid attorneys during an official open meeting. A February 2, 2023 email from Avangrid counsel, Attorney Brian Haverly to the PRC states:

“We were not contemplating a new agreement for signature. The Modified Stipulation would reflect all the benefits and protections in one place, which the parties have expressed positions on, and which may not have been reflected in the Commission’s prior decision. Happy to discuss” (emphasis supplied)

At its April 19, 2023 Open Meeting, a Commissioner parroted that argument, stating “the Commission’s December 2021 order on the certification of the stipulation may not have properly evaluated the modified stipulation.”

We now have evidence, as well, that those communications were not limited to the Avangrid merger, and that the Commissioners and their representatives were aware of Open Meetings Act and Ex-parte concerns, but proceeded with closed door negotiations regardless.

Avangrid/Iberdrola Attorney Tom Bird calls PRC attorney Russell Fisk re NEE Open Meetings Act filing -

“Hi Russell, Its Tom Bird. I hope you’re doing alright. I’m calling about NEE’s filing or proposed filing that raises Open Meetings Act issues – so give me a call back please when you have a moment. I will also try Michael to see if I can get him. If not, I’ll leave a message for him also. Alright, thanks a lot.”

Listen for Yourself And Avangrid/Iberdrola Attorney Tom Bird calling PRC Attorney Michael Smith re ex-parte concerns: “Hi Michael, Its Tom Bird. Hope you’re doing alright. I just sent you and Russell a draft of our proposed motion for remand for the Supreme Court. Russell’s note last Friday asked us to also send a draft of the rehearing/reconsideration motion we would file with the Commission and we started working on that but we wanted to talk to you about it first, you and Russell. One concern that’s been raised in our group is whether showing that to you and discussing it might somehow amount to ex parte communications. So, we’d be interested in your thoughts about that possibility and whether that’s a problem at all. But I’ll call Russell too and leave a message. Thanks a lot. Hope you’re doing well. Bye-bye.” Listen for Yourself

EX PARTE EXTENDS TO ISSUES CRITICAL IN RATE CASE

The PRC's misconduct extends well beyond the Avangrid merger to issues directly related to the current rate case, a case that will substantially impact the economic wellbeing of more than 500,000 New Mexican families.

Proving that the Commissioners understood and discussed the links between the merger, the rate case, and the prudence of PNM's investments in the Four Corners Power Plant as well as PNM's decision to delay rate credits for customers upon closure of the San Juan Power Plant, we have evidence that a Commissioner responded to emails about finalization of the language in the Joint Motion they filed with the utilities saying:

"Thanks for letting me know. I was just about to ask you if you’d heard anything. By the way, where can I get information on the Four Corners abandonment case? I’d like to read the commission’s decision...,"

and we now have evidence that the PRC and PNM were discussing the San Juan rate credit. Attorney for Avangrid/Iberdrola, Tom Bird writes:

“We understand from PNM that they received a call from the OGC’s office in regard to the San Juan securitization appeal, and PNM had the feeling after the call that settlement discussions on the San Juan case were possibly delaying the resolution of the merger case appeal. This appeared to possibly link the two cases together[.] . .. If the Commission is indeed seeking to link, directly or indirectly, the resolution of the merger appeal to negotiations involving San Juan, please let us know as soon as possible as this is not something that Avangrid has ever considered and has not expressed any interest in doing.”

PRC Attorney Michael C. Smith responded acknowledging another (unknown for now) attorney with the PRC had been in conversation with PNM attorney Stacey Goodwin regarding the San Juan issues:

“While I can’t address PNM’s ‘feeling’ described below, as I was not part of the conversation with Stacey Goodwin, it might be better for clarity purposes if PNM was participating in these discussions about the proposed remand.”

Avangrid/Iberdrola Attorney Tom Bird replies:

“I just tried your mobile phone so we could discuss this. Attached are some suggestions about how we can address the two issues you have raised. Please let us know if this resolves those concerns. Additionally, PNM is fully involved at every step. Our client and PNM are eager to move forward here.”

On June 16th Chief Hearing Examiner Medeiros issued orders rejecting PNM's specious arguments to remove the issue of prudence for PNM's investments in FCPP from the rate case, and rejecting as well their bid to prevent a decision on the prudence of their plan to delay the issuance of rate credits upon the closure of the San Juan Generating Station.

With those decisions, the Hearing Examiner affirmed that the issues we have been arguing for the past ten years will be decided in this rate case - issues that will determine whether ratepayers or shareholders will be on the hook for hundreds of millions of dollars imprudently and unfairly foisted upon ratepayers by PNM at the Four Corners Coal Plant, the San Juan Generating Station and the Palo Verde Generating Station.

With so much on the line, the people of New Mexico deserve to be protected by an unbiased, fair and impartial tribunal committed to ensuring just, fair and reasonable rates.

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