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Charge to Facebook stands

State regulators on Thursday stood by a previous decision that would require Facebook to pay $39 million for a renewable energy transmission line built by PNM. Above is the front of the Facebook data center in Los Lunas. (Jim Thompson/Albuquerque Journal File Photo)

State regulators on Thursday stood by a previous decision that would require Facebook to pay $39 million for a renewable energy transmission line built by PNM. Above is the front of the Facebook data center in Los Lunas. (Jim Thompson/Albuquerque Journal)

Copyright © 2019 Albuquerque Journal

The New Mexico Public Regulation Commission on Thursday unanimously rejected motions to reconsider a decision to charge Facebook nearly half the cost of a new $85 million transmission line.

Public Service Company of New Mexico and two other intervenors in the case had asked the five-member commission to reconsider its mid-April decision, which said PNM could not charge general ratepayers anything for building the transmission line.

That decision was based on testimony by a utility executive during hearings in February that the line would serve only Facebook by carrying electricity from a new wind farm near Encino to the tech giant’s data center in Los Lunas, as well as wholesale customers who sell to markets outside the state.

But PNM has since revised that statement, calling the transmission line a “network upgrade” that benefits wholesale and retail customers alike. PNM requested a rehearing on April 30 for the commission to reconsider its position to allow costs to be shared equally among all customers.

Both the Coalition for Clean Affordable Energy and New Mexico Industrial Energy Consumers filed similar motions in support of PNM.

But at the PRC’s public meeting Thursday, commissioners rejected those motions on a technicality.

They said PNM and the other parties did not explicitly ask to reopen the case record for new evidence to be entered through a formal rehearing, forcing commissioners to rely on existing evidence in the record.

“If they want to raise new issues, we would have to reopen the record and bring in new evidence for all parties to comment on,” said Commissioner Stephen Fischmann during Thursday’s meeting. “These motions don’t ask for that.”

Staff attorney Judith Amer told the commission that PNM was only asking the PRC to issue a new, revised order in the case. That means commissioners still had to rely on the PNM executive’s testimony in February that the line won’t serve retail customers, Commissioner Cynthia Hall said.

“PNM unfortunately didn’t provide us with anything in the record to refute that, so we couldn’t reach a different conclusion than we already reached in April,” Hall told the Journal. “In discharging our judicial function, we have to follow the rules.”

Nevertheless, PNM’s official request on April 30 clearly stated it was a “motion for expedited rehearing,” and the motions from the other two parties included similar language.

“We are deeply disappointed in the commission’s decision today,” said PNM spokesman Ray Sandoval in an email to the Journal. “We understand that we created initial confusion (in the February testimony), but after clarifying the information, we believe the law and precedent should have led the commission to modify their decision. We are in the process of reviewing our options on how to proceed.”

PNM could decide to appeal to the Supreme Court.

Under the PRC’s previous order, which now stands, Facebook will have to pay $39 million for the new transmission line. Remaining costs will be covered by wholesale customers, with no charges to general ratepayers.

That order to directly bill Facebook has generated criticism from public officials, including Gov. Michelle Lujan Grisham, and economic development professionals. They said it was unfair to Facebook, and it sets a “chilling” precedent that could discourage other companies from investing in New Mexico.

Coalition for Clean Affordable Energy attorney Chuck Noble said the PRC could have changed its decision if it wanted.

“Neither the regulatory statutes nor the PRC’s own rules require new evidence before the commission can reconsider its decision,” Noble said. “Their decision is unfortunate and disappointing.”

Facebook is building out a massive data center in Los Lunas that will be completely powered by renewable energy under contracts with PNM.

Under those business arrangements, Facebook is committed to paying the bill for generating facilities and other infrastructure designed solely to benefit its operations, but not network upgrades or new infrastructure that strengthens the grid in general in support of all consumers, which is what PNM says the new transmission line will do.

The new line, which will run between Clines Corners and a new substation in Sandoval County, will carry 166 megawatts of electricity from the La Joya wind farm, now under construction, to Facebook’s data center.

But the utility told the Journal last week that it’s now finalizing a contract with a wind developer for a new, 140-megawatt wind farm in eastern New Mexico. Electricity from that wind farm will also be transported to customers through the new transmission line. The company expects to sign that contract in late May and file for PRC approval by early June.

Gary Tonjes, head of the business recruitment organization Albuquerque Economic Development, called the PRC decision “incredibly disappointing.”

“If not reversed soon, we’re deeply concerned about the negative impact that these back-to-back decisions could have on New Mexico,” Tonjes told the Journal in an email. “These are the wrong messages to be sending to the potential employers and investors currently considering the state, and who are capable of helping create a stronger and more diversified economy with greater opportunities for New Mexico.”

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