Jemez Electric Co-op under fire - Albuquerque Journal

Jemez Electric Co-op under fire

Federal support denied; easements not settled; suits pending

Jemez Mountains Electric Cooperative’s cry for help has gone mostly unheeded by New Mexico’s congressional delegation, who say the federal government has no jurisdiction in a conflict between the co-op and Indian pueblos over easement payments.

In April, the co-op’s board passed a resolution urging Congress to intervene in the disputes by passing special legislation to either put a cap on fees, fines and penalties the tribes can impose for easements across tribal lands, or by making an appropriation to assist the co-op in compensating the tribes.

A month later, JMEC placed a newspaper advertisement asking its customers to contact the state’s congressional delegation to request their help, listing the phone numbers for all five of the state’s lawmakers in Washington, D.C.

The ad also urged its customers to call tribal officials and ask for fairness.

Kenneth Borrego, the president of the co-op’s board of trustees, said in an interview that some of the tribes were demanding “terribly exorbitant” fees for rights of way to run power lines through their lands. Negotiations with most of them are at impasse.

U.S. Representative Ben Ray Lujan, D-NM.
U.S. Representative Ben Ray Lujan, D-NM.

“We need help,” Borrego said. “We’re a very unique co-op in that we serve 10 tribes – the eight northern pueblos and two nations, the Navajo and Jicarilla Apache. It’s been hard for the co-op to do business and keep the lights on for everybody.”

Borrego said the co-op has no choice but to pass the costs of easement payments on to its customers.

“It’s tough to put that burden on the membership, but we don’t have the money,” he said. “Like every utility, you have to collect it.”

But help won’t come from the federal government. Members of the state’s congressional delegation each say it’s not them, but the New Mexico Public Regulation Commission that has jurisdiction in the matter. Granting an appropriation would constitute an earmark, which is illegal under House and Senate rules.

Further, House Rep. Ben Ray Luján, a former PRC commissioner, says the co-op jumped the gun by approving rate increases and right-of-way payments to some of the tribes before taking the matter to the PRC and before notifying customers.

“This resolution was adopted after the community had concerns with the rate increase that came out of negotiations with San Ildefonso Pueblo in 2012,” he said. “So why was the agreement adopted and payments made before anything was filed with the PRC, which has jurisdiction in this case, and a year before notification was given?

“This agreement should have been brought before the PRC, especially when the rates were the way they were,” Lujan said.

Rate increase protests

The agreement JMEC made with San Ildefonso was to pay the pueblo $5.9 million over 25 years for an easement, but that and other negotiated deals made with pueblos haven’t gone into effect because of protests over the recovery method.

Under the rate proposal to recover easement payment costs for San Ildefonso, for example, some customers would see their electric bills increase as much as 51 percent.

Customers at the pueblo and in nearby El Rancho who use 1,000 kwh per month would see a $58.79 increase to their electric bills.

“There are a lot of people living in this area who can’t afford that,” said El Rancho resident George Gomez. “Jemez Mountains Co-op negotiated this easement and pretty much sold us down the river.”

Gomez, and others, dispute the manner in which the recovery is being assessed.

Instead of spreading out the cost recovery to all of its 33,000 customers, the rate increases would apply to homes and businesses within the boundaries of the respective pueblos. So customers in nearby Pojoaque – which negotiated a $2.2 million, 25-year easement agreement – would only receive a 5 percent bump, or a $5.73 increase to their monthly bill if using 1,000 kwh per month.

“If they’re going to go out and negotiate these easements the cost should be shared by all its customers, not just some of them,” Gomez said, adding that he felt the practice being applied was discriminatory and unconstitutional.

“If a transformer blows, they don’t charge just the people living in that neighborhood, they charge everybody.”

Governors of San Ildefonso, Namb é and Jemez pueblos did not respond to phone messages from the Journal seeking comment for this story. But San Ildefonso Gov. Terry Aguilar spoke on the issue of rate increases during a Santa Fe County Commission meeting in March and expressed the same concerns as Gomez.

“I believe the underlying issue is not recovery, the issue is about fairness,” he told the commission. “The only way I can see this being done properly and fairly is for it to be applied equally across the board. That may upset the other pueblos and everyone else, but this issue needs to be based on fairness.”

The county commission voted to join the protest against rate increases at that meeting. Because the PRC received a sufficient number of protests, the rate increase has been suspended for nine months to allow time for the PRC to hold hearings on the matter.

The PRC is holding a mediation session on the San Ildefonso rate increase next month. Another mediation is scheduled for Nambé Pueblo customers in September.

Customers still have until Aug. 9 to join the protest. Only those who filed motions for leave to intervene can participate in the mediation.

How did we get here?

Rose Marie Law, acting general manager of JMEC, said the co-op has had easement agreements with the pueblos for decades. They typically ran for 25 years, but most of them started expiring about seven years ago.

“We want to do what’s best for everybody,” Borrego said, “but in doing so it has created a lot of heartburn.”

Borrego said the prices the pueblos are charging has gotten out of hand.

“It used to be real reasonable, and that’s why we could afford to do it,” he said. “We’d pay $1,000 per year for 25 years. Now, it’s in the millions.”

The problem, Borrego says, is that the federal Bureau of Indian Affairs sets a floor for what can be charged per acre for easements, but there is no ceiling.

“At least that would give us a place to stop,” he said. “Right now, it’s open-ended and they can ask for whatever they want.”

So far, the only easement agreement that has been settled is with Ohkay Owingeh, at $11.5 million over 25 years.

Borrego said some land owners who have easements running through their property claim it’s unfair that they don’t get the same deal as the pueblos.

“So we’re getting it from all sides,” he said.

Borrego said he expects the matter to end up in federal court.

“There’s going to be litigation; that’s one reason we asked Congress to step in,” he said.

Placing the blame

Borrego said representatives from Sen. Martin Heinrich’s office visited the co-op and collected information last month, but he had not heard back from Heinrich’s staff.

Contacted by the Journal, Whitney Potter, Heinrich’s communications director, said the federal government does not have jurisdiction over local distribution matters.

“Electric rates for retail customers are within the jurisdiction of the state PRC, and we are aware of no precedent for Congress getting involved in setting local electric rates,” she wrote in an email.

Potter added that any appropriation to the co-op or its customers would constitute an earmark, which is banned by Senate rules.

She said Heinrich is encouraging all parties to come to the table and negotiate in good faith in a way that is fair to customers.

Borrego said he and other members of the co-op’s board also met with Rep. Luján last month, but the meeting was unfruitful.

Luján, who hails from Nambé, took exception to that and to other statements attributed to Borrego in an article published by the Rio Grande Sun following that meeting.

“I thought several ideas were put on the table at that meeting, and everyone came away feeling positive,” Luján said. “One of the things I was most concerned about was that Mr. Borrego said some things in an article in the Rio Grande Sun that may not be true and accurate.”

Borrego was quoted as saying he felt that in dealing with the state’s congressional delegation the co-op was at a disadvantage because it doesn’t have the money to contribute to campaigns like the pueblos do.

“I know we’re not big contributors to their campaigns and I wonder if that doesn’t lessen our voices,” he said in an article published July 4. “That doesn’t mean we shouldn’t be recognized. I still think we have the same rights and same voice. I know they are hearing the pressure from constituents our there.”

“He’s looking elsewhere to try to place the blame,” said Luján, who placed the blame on Borrego.

Luján said minutes from a special meeting of the co-op board in February 2012 show that Borrego made the motion to accept an easement agreement with San Ildefonso Pueblo.

“What’s interesting about that is Mr. Borrego moved to adopt the agreement and Jemez Mountains Electric Co-op started making payments shortly after that. But there wasn’t notice of that until 2013. So for more than a year this agreement was in place before customers were notified,” he said.

Fire lawsuits pending

The easement issue isn’t the only thing plaguing the co-op right now.

JMEC is facing several lawsuits – three of them filed last month and another one earlier this month – stemming from the 2011 Las Conchas Fire, which was sparked by a downed power line and burned more than 100,000 acres and dozens of homes. Jemez and Cochiti pueblos are plaintiffs in two of the most recent lawsuits.

JMEC could also face potential lawsuits as a result of this year’s Thompson Ridge Fire, which was also ignited by one of its power lines.

Though no structures were lost, the Thompson Ridge blaze burned nearly 24,000 acres in the Jemez Mountains.

In addition, the co-op’s board of trustees has come under fire by some of the people protesting the rate increases for alleged mismanagement.

Many of the charges came to light during hearings the PRC held on the proposed rate increases earlier this year. The allegations were also outlined in a letter to the USDA inspector general and the Department of Interior, and signed by Gomez, co-op employee Tony Martinez, David Salazar, a member of the board of trustees who is one of the protesters of the rate increase, and two other co-op members.

The letter states that the board has subverted democratic control of the co-op, conducted business in secrecy, placed members’ funds at risk, and violated its fiduciary duty by engaging in a pattern of misconduct.

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