In his op-ed July 24 (“PRC Wasting Your Time”), Sen. Jacob Candelaria, D-Albuquerque, accuses PRC members of ignoring the Energy Transition Act (ETA), which PNM waltzed out of the Legislature, escorted by PNM’s “BFF,” none other than Sen. Candelaria himself. Next, feeling nastier, Candelaria called for the commission’s impeachment. Off the deep end, he tweeted the PRC was “corrupt” for considering whether it was legally required to investigate the reasonableness of PNM’s demand for hundreds of millions in “stranded asset” and decommissioning costs. Remarkable that Candelaria represents people who struggle to pay their electric bills.
The much-touted but misunderstood ETA accomplishes three great things, for which the governor and Legislature deserve applause: increasing minimum requirements for renewable energy, providing money for retraining coal plant workers and adopting “securitization” for the money PNM would otherwise receive from ratepayers over time – at a high interest rate – for retiring plants and for their decommissioning costs. Securitization gets PNM its money “up front” from Wall Street and lowers the interest rate ratepayers pay to retire that debt.
Why is the senator from PNM having such a fit? Because the PRC is considering whether the ETA applies to the PRC’s current consideration of stranded cost recovery for PNM. Our Constitution contains a provision forbidding new laws from altering the outcomes in pending cases. The present PRC case was pending before the ETA was introduced in the Legislature. If it doesn’t apply, then the PRC must hold hearings on the amount PNM should receive from ratepayers for closing coal plants that are decrepit, polluting and should have closed years ago. Is the amount PNM wants just and reasonable? Were expenditures for which PNM seeks compensation prudently incurred? Does 100% recovery without any reduction represent a fair balancing of interests between ratepayers and PNM’s shareholders? In the past, PNM has received only part of what it requested. If the ETA controls, however, PNM just gets the money it wants, no questions asked.
The complex ETA, which PNM largely drafted, includes provisions that the Legislature, governor and the environmental groups who supported the bill must not have understood or intended. By eliminating the PRC’s ability to hold hearings on the legitimacy of the amount a utility claims when it closes old plants, it prevents the PRC from protecting ratepayers from overreaching by a utility.
Embarrassingly, New Mexico now has the distinction of being the only state to enact provisions that prevent scrutiny of the amount of compensation a utility claims when a plant is retired and decommissioned. …