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PNM again asks PRC to reopen line case

Copyright © 2019 Albuquerque Journal

Public Service Company of New Mexico is trying again to get its case on a new transmission line reheard by state regulators, who want to charge Facebook nearly half the cost of the $85 million project.

The company filed a motion late Tuesday afternoon asking the Public Regulation Commission to use its authority to reopen the case record for PNM to enter new evidence showing the line would serve all utility customers, not just Facebook and wholesale customers.

The PRC said in mid-April that the utility could not charge general ratepayers anything for building the transmission line, based on testimony of one PNM executive during hearings in February.

That executive had said 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 later revised that statement, calling the transmission line a “network upgrade” that benefits all customers. It asked the commission to reconsider its decision to bill Facebook $39 million for the project and wholesale operators for the rest and instead allow costs to be shared equally among all customers.

Last week, however, the PRC unanimously rejected PNM’s request because it did not explicitly ask to reopen the case record for new evidence to be considered. That meant the PRC had to still rely on the single PNM executive’s February testimony that the line would only serve Facebook, according to commissioners.

PNM’s new filing explicitly asks the PRC to reopen the case record to consider new evidence regarding a proposed 140-megawatt wind farm that the utility is negotiating with Avangrid Renewables, which would rely on the transmission line now under dispute to deliver electricity to customers.

PNM says it needs that new wind farm to meet renewable energy mandates under the state’s new Energy Transition Act, which requires public utilities to get all electricity from renewable and carbon-free resources by 2045.

The new wind farm will benefit all customers, said PNM spokesman Ray Sandoval.

“We have asked the commission to consider this new evidence on an expedited time frame to lock in time-sensitive pricing (of the project),” Sandoval said in an email to the Journal.

If PNM can complete negotiations with Avangrid subsidiary La Joya Wind LLC, in the next few weeks, the proposed wind farm, called La Joya II, would become the lowest-cost renewable energy resource on PNM’s system, according Thomas Fallgren, the utility’s vice president for generation.

The utility did not reveal the wind farm’s price, but it said the regulatory dispute over the new transmission line, known as the BB2 project, has impeded a final agreement between PNM and Avangrid.

“Time is of the essence on this matter as the very favorable PPA (power purchase agreement) pricing is conditioned on La Joya Wind being able to order the necessary equipment for the La Joya II facility in the coming days,” Fallgren said in an affidavit to the PRC submitted along with PNM’s motion on Tuesday to reopen the case.

La Joya II would be built 18 miles east of Estancia, near where Avangrid is now constructing the 166-megawatt wind farm called La Joya I. That wind farm is being built primarily to supply Facebook’s data center in Los Lunas, with the electricity transported partly through the planned BB2 line.

If PNM can conclude negotiations with Avangrid, it will file for La Joya II approval with the PRC in June for the wind farm to begin operating by the end of 2020. If the BB2 dispute is not resolved, it could jeopardize La Joya II and other future renewable-energy projects, because new transmission capacity is critical to build more wind farms on New Mexico’s gusty eastern plains, Fallgren said.

“The BB2 project is an extremely important addition to PNM’s overall transmission system because it will allow PNM to add additional wind generating resources to its resource portfolio,” Fallgren said in his affidavit. “… The uncertainties created by the direct allocation of the BB2 project costs to (Facebook) place the development of additional renewable resources in New Mexico at risk.”

PNM is asking the commission to schedule an expedited hearing on or before June 6 and then modify its April decision immediately afterward based on the new evidence presented.

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