Public Service Company of New Mexico did an inadequate job of presenting its case when it asked state regulators to approve a 45-mile transmission line that would supply electricity to the Facebook data facility under construction near Los Lunas, according to the utility’s request Monday for the Public Regulation Commission to rehear the matter.
That assessment also was expressed in a published opinion piece signed by a high-ranking PNM executive.
“When PNM presented its case, we did not do a good job presenting the full story or describing how the [proposed] transmission line benefits all of our customers throughout the state, not solely Facebook,” PNM Senior Vice President Ron Darnell said in the opinion piece in Sunday’s Santa Fe New Mexican.
The commission voted unanimously this month to deny PNM’s request to have retail customers of the state’s largest utility pay for the new line.
“Our initial description of the … line during the PRC hearing did not clearly explain how this project upgrades our entire transmission system and we did not do our job of plainly stating how this project would benefit our customers beyond Facebook,” Darnell wrote. “PNM understands our vital role in presenting the commission with a clear picture, and unfortunately, the picture we presented was a bit fuzzy. That’s why we are requesting the opportunity to have our case reconsidered.”
He wrote the new power line from Clines Corners in Torrance County to Sandoval County would improve reliability for customers across the state and add more renewable energy to the utility’s portfolio, and that it would save customers an estimated $21.5 million.
That figure, according to the rehearing request, is based on the projected $65.4 million in revenue from Facebook, minus the $43.9 million cost to customers. Of that total cost to customers, the company said, about $39.9 million would be paid by retail customers, both business and residential, while about $4 million would be billed to wholesale customers.
The proposed high-voltage line would transmit electricity produced by a 166-megawatt wind farm being built by Avangrid Renewables to supply Facebook’s data center.
Facebook, which before it began building the data center reached a deal with PNM to acquire electricity from renewable sources, already pays for its share of the network transmission costs through a transmission demand rate previously approved by the commission.
“Requiring Facebook to pay a direct reimbursement in addition to its transmission demand rate … contradicts the contract and rate and could be considered ‘double recovery,’ ” the company’s request says. “This would result in an excessive overpayment that cannot simply be corrected through a rate credit, and is not fair and equitable to Facebook.”
The commission still would have oversight over the project because PNM, in future rate cases, would have to prove that the actual costs of the line were prudently incurred and were reasonable, the request says.
Also filing a request for rehearing Monday was the Coalition for Clean Affordable Energy, made up of environmental groups including the Sierra Club, Western Environmental Law Center, Natural Resources Defense Council, New Mexico Public Interest Research Group and the Union of Concerned Scientists.
“The commission should not deprive New Mexicans of the benefit from the much-needed economic development and job creation attendant to the Facebook expansion, for PNM’s flawed presentation of this case,” the coalition’s request said. Approving the proposal “with a correct interpretation” is vital for future businesses like Facebook that want to locate to New Mexico to take advantage of the state’s green energy incentives.
PNM is asking the commission to rehear the case no later than May 8.
PRC hearing officer Carolyn Glick said in a recent interview said that her recommendation was based in part on the fact that during a hearing on the proposal, a PNM official had testified all of the 166 megawatts of power from the project would be dedicated exclusively to Facebook’s Los Lunas facility. Therefore, she said, Facebook should have to pay for it.
The Facebook project, originally proposed in 2016, has been seen by political leaders from both parties as a ray of hope for a state economy battered by the recession and a step toward attracting more businesses that want to use renewable energy. Politicians of all stripes have expressed dismay over the commission’s action in the power line case.
California-based Facebook, which said the commission’s decision could affect its long-term operations in New Mexico, has said it already has invested more than $400 million into the Los Lunas data center and plans to put at least $1 billion into the project. More than 1,000 workers have been involved in the construction of the facility, which Facebook says eventually will provide at least 300 jobs.