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PRC won’t reconsider San Juan decision

Copyright © 2019 Albuquerque Journal

The Public Regulation Commission has rejected a motion to clarify whether the state’s new Energy Transition Act will apply to shutting down the coal-fired San Juan Generating Station, drawing harsh criticism from the law’s sponsor.

Public Regulation Commissioner Theresa Becenti-Aguilar

PRC Chairwoman Teresa Becenti-Aguilar issued a single-commissioner order Wednesday afternoon denying the motion by the environmental group Western Resource Advocates that asked the PRC to clarify whether the ETA will apply in San Juan deliberations and, if not, to “reconsider” that position after oral arguments on the issue.

Becenti-Aguilar’s order, however, says the issue will be reviewed during hearings later this year on San Juan’s closure and on the replacement power for the coal plant, and not before.

State Sen. Jacob Candelaria

Sen. Jacob Candelaria, D-Albuquerque, who sponsored the ETA in this year’s legislative session, blasted Becenti-Aguilar’s latest action, as well as the commission’s July 10 order to open San Juan hearings under an old case docket that predates the ETA.

Candelaria said failing to clarify the issue causes ambiguity and delays any action, including taking the matter to the Supreme Court for a final decision. And that continued uncertainty over regulatory process could endanger future investments in clean energy in New Mexico.

Overstepped authority?

Candelaria accused Becenti-Aguilar and Commissioner Valerie Espinoza, who pushed for San Juan’s shutdown to be reviewed under the old case docket, of deliberately and illegally attempting to skirt the new law.

“They have acted in an arbitrary and capricious manner that I believe is subject to impeachment,” Candelaria told the Journal’s editorial board Thursday. “I believe they’ve overstepped their authority.”

Candelaria also said the two commissioners are demonstrating “criminal conduct” by blocking the ETA for political reasons rather than uphold their duty as regulators to abide by the law, which took effect in June.

“I believe, at this point, Espinoza and Becenti-Aguilar have violated their oath to the Constitution,” Candelaria said. “I don’t have enough of the facts yet to make an argument for impeachment to legislators … . But I could ask the Legislature to review the conduct of those two individuals and whether they should be held accountable.”

Becenti-Aguilar told the Journal she could not discuss a case that’s pending before the commission and declined to comment on Candelaria’s criticism.

Espinoza could not immediately be reached for comment.

Continuing questions

Western Resource Advocates sought clarification about ETA applicability in the San Juan case because the PRC’s July 10 order opening hearings on the coal plant did not directly address the issue. But by placing the plant shutdown and costs related to it under old case law, the commission generated broad concern that it intends to ignore the new energy law.

At issue is whether Public Service Company of New Mexico can finance the shutdown and some of the replacement power with bonds that customers would pay off. The ETA explicitly authorizes the use of ratepayer-backed bonds to cover those costs, including recovery of nearly $300 million that PNM invested in the plant, plus about $40 million that would be used to assist laid-off plant and coal mine workers, and to implement economic development programs to mitigate the impact of plant closure on local communities.

After the PRC placed the San Juan abandonment and financing issues under old case law, some commissioners told the Journal that they want to review those issues outside the ETA to better balance ratepayer and PNM interests. Without the ETA, the commission could force PNM to write off much of its lost investments in San Juan rather than make customers pay for it through bonds.

Regulatory vs. legislative

But Candelaria said that’s not for commissioners to decide. Their role as regulators is to abide by laws and statutes established by the Legislature, he said.

“The PRC is not a legislative body,” Candelaria said. “… It has a regulatory function and not a law-making function, and its authority comes from the Legislature.”

Candelaria and Western Resource Advocates attorney Steve Michel said they believe the PRC deliberately left its July 10 order vague about ETA applicability to first force concessions by PNM on sharing costs with ratepayers before later ruling on how or if the ETA will apply.

Candelaria called it a “penal view” of the issue to punish PNM for its previous investments in coal-fired generation.

Michel also questioned whether Becenti-Aguilar’s single-commissioner order rejecting the motion for clarification and reconsideration was appropriate since such single-signature decisions are reserved for procedural issues.

“Using it for this type of issue is questionable, at best,” Michel said. “It’s a very substantive, contentious issue and not the type of thing single-commissioner orders are designed to address.”

Procedural issue question

Becenti-Aguilar said it is a procedural issue because the commission’s July 10 order already instructed the two hearing examiners overseeing the San Juan shutdown and replacement power cases to analyze legal issues on whether the ETA should be part of the process.

“They will do their assessment, and say what they believe is allowable and what is not,” in regard to the ETA, Becenti-Aguilar told the Journal.

At a pre-hearing conference Tuesday with parties intervening in the cases, the hearing examiners ordered PNM to file briefs related to ETA applicability, together with written testimony about its proposals for shutting San Juan, financing the closure and selecting replacement power, by Aug. 23. Intervening parties would then have until Oct. 18 to respond to PNM’s filings.

But Michel said that puts the cart before the horse, since PNM and other parties need clarification about the ETA before they file testimony on their proposals and counter positions.

“We won’t get a recommended decision (on ETA applicability) for perhaps four months or more, and then it has to go before the full commission to decide on the issue,” Michel said. “That leaves parties in the dark on the issue pretty much throughout the case … . It seems like a purposeful effort to obstruct implementation of the ETA.”

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