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Debate rages over plan to replace elected PRC with appointees

Copyright © 2020 Albuquerque Journal

The future of New Mexico’s Public Regulation Commission is one of the hot-button issues in this year’s elections, as voters decide whether to continue electing PRC members or allow the governor to appoint them.

If approved, Constitutional Amendment 1 would turn the five-member elected commission into a three-member entity appointed by the governor from a set of nominees selected by the Legislature. The initiative, which the Legislature passed with broad bipartisan backing in 2019, is generating heated debate.

Proponents say the amendment would help “depoliticize” the commission, potentially ending the raucous political battles that have engulfed PRC decisions since before Gov. Michelle Lujan Grisham took office.

Since last year, the governor and legislators have consistently clashed with PRC members over various issues, particularly the state’s new Energy Transition Act, which aims to make New Mexico’s electric grid carbon-free by 2045. The governor and legislative leaders had to appeal to the Supreme Court this year to force the PRC to apply the law when regulating Public Service Company of New Mexico’s plans to abandon the coal-fired San Juan Generating Station and replace it with renewable energy.

But opponents, including a majority of the five PRC commissioners, call the amendment a “power grab” by the governor that would take away the right of voters to elect their own representatives to the commission. It’s now an elected body whose members are chosen from five districts around the state.

Approval of the amendment would turn the clock back to 1996, when two different entities regulated utilities. The three-member State Corporations Commission, which was elected by voters, and the three-member Public Utilities Commission, which was appointed by the governor, regulated different utilities separately.

Voters approved a constitutional amendment that year to abolish both commissions and create the PRC as a single entity with five elected members.

Years of ethics-related criticism of the former commissions inspired that change, which aimed to make regulators more directly accountable to the public. But proponents of the new ballot initiative this year say the PRC’s 20-year history has proved a failure.

The PRC has been mired in scandals – including criminal violations by some commissioners – over the years, and many controversial decisions have ended up at the Supreme Court.

Supporters of the proposed change say those problems reflect many commissioners’ lack of professional qualifications. Commissioners are often career politicians rather than experienced utility regulators. Supporters of the amendment also blame what they say is unbridled influence from competing lobbyists – including environmental organizations and regulated entities themselves – seeking to sway PRC votes.

“As an elected commission, we’ve seen money come in from all sides to influence decisions,” said Senate Majority Leader Peter Wirth, D-Santa Fe. “It’s turned the commission into a matter of who has the most leverage and power to win elections, rather than who can do the best job as a commissioner. … We need commissioners who have experience working with both utilities and consumers and who fully understand the issues, not just someone who gets the most votes.”

GOP divided

Wirth and two Republican senators, William Payne of Albuquerque and Steven Neville from Aztec, co-sponsored Senate Joint Resolution 1 to amend the constitutional provisions that govern the PRC. It garnered impressive bipartisan support in the 2019 session, passing 59-8 in the House and 36-5 in the Senate.

Despite that bipartisan backing, the state Republican Party opposes the initiative, which it says would consolidate the governor’s control over the PRC, strip commissioners of their independent ability to protect consumers and open the door to more influence from special interests rather than less.

“It’s a power grab for the governor,” the party said in a recent news release.

Payne and Neville, however, said their party’s position likely reflects lack of knowledge about the amendment and misconceptions among voters.

“The overwhelmingly bipartisan vote on the resolution reflects the Legislature’s experience and difficulty with the PRC on many issues,” Payne said. “This is the clearest bipartisan effort to reform a state agency that I’ve seen in all my years in the Senate. It’s not a Democrat or Republican initiative.”

Payne said the legislation includes rigorous checks and balances that block any governor from stacking the commission with favored candidates. A bipartisan legislative committee would vet prospective commissioners for professional qualifications to prepare a list of nominees that the governor must choose from, and the governor’s nominees must then be confirmed by the Senate. The proposal would mandate that no more than two of the three commissioners be members of the same party.

“The biggest misconception is that the governor gets to pick political cronies,” Payne said.

The PRC’s decisions affect consumers across the board by setting rates for utilities – including everything from electric, water and gas services to telecommunications and transportation – making it crucial for nonpolitical, highly-qualified professionals to run the PRC, Neville said.

“Commissioners need to keep utilities solvent while also seeking the best rates for consumers,” Neville told the Journal. “It’s a balancing act, and we need the right people to do it.”

Internal opposition

A majority of current PRC commissioners oppose the amendment. Commissioner Theresa Becenti-Aguilar and PRC Vice Chairman Jefferson L. Byrd spoke against it at a Sept. 24 meeting of the All Pueblo Council of Governors.

Becenti-Aguilar said it would eliminate voter input, undermining input from diverse communities on critical issues such as rural electric cooperatives and water systems. Becenti-Aguilar also criticized the longer terms. The amendment would extend the current four-year elected terms, which are limited to two consecutive periods, to six-year appointments, which are also limited to two consecutive periods.

“Downsizing the PRC from five members to three, filling it with appointed bureaucrats instead of elected representatives of the people and extending the maximum length a commissioner may serve from eight years to twelve adds up to a real power grab from Santa Fe,” Becenti-Aguilar said in a written statement to the All Pueblo Council. “This is simply too much power for voters to hand over to any governor.”

Until recently, two commissioners – Cynthia Hall and PRC Chairman Steven Fischmann – both supported the amendment. But Fischmann reversed his position in September after reading the language that appears on the ballot. The ballot says only that the amendment would make the PRC a three-member entity appointed by the governor from a list of candidates presented by a nominating committee. It doesn’t say it would eliminate the current five-member elected commission, which Fischmann believes is a deliberate attempt to hide critical information from voters.

“Quite honestly, it offended me that voters are not afforded an opportunity to know from reading the ballot that they’re giving up their right to elect the commission,” Fischmann said.

Raul Burciaga, head of Legislative Council Services, said it’s standard practice to simply place the title summary, or heading, of a joint resolution on the ballot without changing or adding anything to what the Legislature approved. That was done in this case, Burciaga said.

Fischmann, however, said his concerns about legislative manipulation convinced him that lobbyists and special interests can influence an appointment process as well as elections for commissioners, pushing him to withdraw his support for the amendment.

Dark money

Think New Mexico, a public policy think tank and advocacy organization, says special-interest money has already seeped into the voting process.

The Committee to Protect New Mexico Consumers, an educational organization set up by environmentalists, recently spent $264,000 on mailers that suggest citizens consider whether they prefer “qualified professionals or politicians?” The committee disclosed the spending in September but didn’t report who its donors are, prompting Think New Mexico Executive Director Fred Nathan to question the influence of “dark money.”

“If Constitutional Amendment 1 is such a good idea, then why do the folks who are bankrolling its passage need to keep their identities secret from the public?,” Nathan asked in an email to the Journal. “The public has a right to know who is spending so much money to influence this election. If this secretive committee is receiving large contributions from regulated industries, that would be a serious conflict of interest as regulated industries should not be deciding how their regulators are selected.”

Committee board member Noah Long said the group will disclose its donors in post-election reporting.

In a 2011 report, Think New Mexico promoted changes that set minimal professional qualifications for PRC commissioners. Voters approved the measures in 2012. That report considered the advantages and disadvantages of elected and appointed commissions.

“The bottom line is that elected commissioners tend to be more responsive to the needs of consumers and tend to keep rates a bit lower, while appointed commissions tend to be somewhat more highly qualified,” Nathan said. “There are trade-offs.”

New Mexico is one of only 12 states in the U.S. with elected regulatory commissions. The other 38 states appoint them, and none is perfect, said Doug Howe, a utility economist and former PRC commissioner.

“To be frank, no commission in the U.S. is totally divorced from political influence,” he said. “The real question is how to reduce that to a minimum … and I think the last 20 years have shown that an elected commission has not been a good experiment. Is this reform a perfect solution? No. But is it a darn good one? You bet.”

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