Regulators berate PNM again on rate credit - Albuquerque Journal

Regulators berate PNM again on rate credit

The Public Regulation Commission launched another verbal tirade last week against Public Service Company of New Mexico for opposing a customer rate credit after closing the coal-fired San Juan Generating Station.

The commission voted 5-0 on Thursday to reject PNM’s appeal and request for a stay on a rate credit that commissioners had previously ordered. That order required the utility to apply an initial rate credit to customers’ bills after shutting the first of San Juan’s two operating units on June 30, followed by another, larger, rate credit once the second unit closes on Sept. 30.

The first credit would mean an immediate $1.76 per month savings for average residential customers starting July 1, although PNM has until Aug. 1 to apply it to bills. Customer savings would then jump to $8.19 a month on Oct. 1, after the second unit ceases operation.

PNM, however, appealed the order at the PRC on June 29, followed by a separate appeal and request for stay at the state Supreme Court on June 30. The Supreme Court must yet respond. But given the PRC’s rejection of PNM’s appeal, the utility must apply the first rate credit on Aug. 1, unless the court grants a stay.

When the PRC originally ordered the rate credits in June, commissioners berated PNM for trying to “cheat” customers out of savings from shutting down operations at the coal plant. And on Thursday, after rejecting the utility’s appeal, commissioners again engaged in a diatribe of accusations against PNM.

“Customers are being scammed,” said Commissioner Stephen Fischmann.

PRC Chair Cynthia Hall expressed “great disappointment” in PNM that “borders on disgust.”

Commissioner Joseph Maestas called PNM justifications for withholding a rate credit “preposterous.”

Rather than provide an immediate rate credit, PNM wants to withhold savings from shutting San Juan until after it concludes its next rate case, likely in late 2023, to help pay for new investments it’s made in the grid since 2019, and then use the San Juan savings to offset any forthcoming rate hike to buffer the impact on customers.

PNM has not filed for new rates since 2018, in part because of the pandemic, said PNM Resources Chairman, President and CEO Pat Vincent-Collawn.

“With our customers clearly front and center, PNM made decisions to postpone two rate increases during a worldwide pandemic and a turbulent economy,” Vincent-Collawn told the Journal. “The commission’s action impairs PNM decisions aimed at safeguarding and caring for our customers’ well-being.”

Commissioners say withholding San Juan savings violates the state’s Energy Transition Act and a 2020 PRC financing order, which allow PNM to recover lost, or “stranded,” investments it’s made in the coal plant. The ETA and the PRC’s order authorize PNM to issue low-cost “securitization bonds” to recover those investments, which customers would pay back over 25 years through a monthly surcharge on their bills.

And, according to commissioners, securitization allows San Juan to immediately be removed from base rates upon plant closure to allow customers to promptly benefit from the savings.

But PNM says those savings must first be “trued up” alongside new company investments in the grid through a rate case, and even then, only after the utility issues the securitization bonds, which will happen once the rate case concludes.

The Supreme Court may now review those issues if it accepts PNM’s appeal.

Meanwhile, PNM executives say the commission’s verbal accusations border on defamation.

“The commission’s regulatory role should be that of an objective and impartial decision-maker charged by law with balancing the interests of customers, the utility, and its shareholders,” PNM spokesman Ray Sandoval told the Journal. “Instead, the commissioners’ disrespectful and unfounded verbal attacks on PNM last week and in prior proceedings undermine public confidence in the integrity and objectivity of critical regulatory decisions.”

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