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PRC May Revisit Cost Structure for Renewables

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A new method the Public Regulation Commission approved in December to calculate renewable energy costs may be reopened for debate.

PNM, PRC staff, the state Attorney General’s Office and New Mexico Industrial Energy Consumers have filed a joint motion requesting that the PRC “rehear” the case. They want the PRC to remove requirements that utilities include savings from future avoided costs when calculating the price tag of renewable energy projects, such as eliminating the need in later years to build a new natural gas plant.

But renewable advocates, who believe such factors are critical to determining the real costs of alternative energy, say the issue was resolved on Dec. 18, when the PRC voted 4 to 1 to approve the new method, ending nearly 18 months of often-contentious debate.

“It seems a waste of ratepayer dollars to rehash issues that have already been settled,” said Green Chamber of Commerce CEO Allan Oliver.

The petitioners, however, did not get a fair shake the first time around, said Gerard Ortiz, PNM’s vice president for regulatory affairs.

“We think there are arguments that were not fully considered,” Ortiz said.

The parties say only costs for fuel and purchased power that are avoided in the same year an investment is made in a renewable should be considered, because future avoided costs are speculative and mislead consumers about cost.

The cost-calculation rule is used to determine if projects fall within a PRC-imposed price cap on how much utilities can spend to comply with the renewable rules.

No new evidence is expected in a rehearing. But Peter Gould, general counsel for Industrial Energy Consumers, said he hopes newly elected commissioners Valerie Espinoza and Karen Montoya would be open to their arguments.

Espinoza said she’s unlikely to reopen an issue already decided by the PRC.

Commissioner Pat Lyons, who voted against the rule in December, said he supports a rehearing. Commissioner Theresa Becenti-Aguilar said she stands by her yes vote in December. Montoya, meanwhile, said she wants to hear petitioners’ arguments.

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