We supported the Energy Transition Act because it would transition Public Service Company of New Mexico’s reliance on polluting coal plants to renewables. Now we are moving for surgical amendments to protect ratepayers. Why?
To remove the guarantee that PNM gets 100 percent costs from ratepayers when it closes a plant (or its portion of a plant), to reinstate Public Regulation Commission oversight for utility plant closures and to reinstate conforming legal deadlines consistent with New Mexico court rules.
The principal accomplishment for the ETA was the closure of PNM’s coal-fired San Juan Generating Station and updating the Renewable Energy Act and the Air Quality Control Act to make needed progress on climate. Whether this was a desirable agreement for ratepayers was a legitimate subject of debate: However, we and the governor believed this was a way to expedite the closing of the coal, for climate protection.
We were unaware that the ETA, in language tucked into the 82-page bill, effectively removed PRC authority to oversee the amount of compensation PNM would receive from its customers when it closes its old plants, and that this deregulation provision applied not only to its coal plants but to its gas and nuclear plants as well. The costs imposed on ratepayers for all plants will be substantial, but the costs associated with the Palo Verde Nuclear Generating Station could be astronomical. Nuclear has become very expensive when compared with renewables, therefore Palo Verde’s closure may be imminent.
Whatever PNM decides to claim as the “value” it will lose when Palo Verde closes and, more ominously, all of its decommissioning (cleanup) costs, the ETA has shifted them to ratepayers. This amount cannot be modified whatsoever. This puts PNM in charge of setting its own rates, without PRC ability to adjust those charges even if they are not fair, just or reasonable.
The PRC’s history of plant closures is one of striking a balance between a utility’s desires and the interests of ratepayers. With the ETA, PNM escaped this balancing process and would get another one-sided deal when Palo Verde closes. This could easily result in an unfair, multibillion-dollar impact on ratepayers.
Under Article IV, Sec. 16 of our constitution, the title of the ETA should have provided notice of the inclusion of nuclear and gas facilities. Our constitution requires that, “The subject of every bill shall be clearly expressed in its title.” The ETA’s title referred to coal-fired facilities six times, but neither its title nor its text made any mention of nuclear or gas. Yet the bill forbids the PRC from “disallowing” PNM from recovering what it claims as any costs.
A dozen consumer, environmental justice, faith and health organizations are asking the ETA be amended to return authority to the PRC to determine how much money would be fair for PNM to receive from ratepayers when it closes plants.
The ETA should provide both environmental protection and consumer protection; it succeeds in the former and fails on the latter. ETA is the only securitization law in the country that forbids regulatory oversight. The PRC has the history and expertise to examine the value of utility investments and whether outstanding costs should be absorbed by the shareholders or paid by the ratepayers or shared. Removing PRC supervision to protect the public was not in the title of the bill, and we did not understand this when we voted for the ETA.
We believe the authority should be returned to the PRC, and that is what our bill does. The economic tool of securitization is maintained, and consumer protections are upheld. Won’t you support corporate accountability and ratepayer relief? If yes, contact your representatives.