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San Juan hearing can proceed, Supreme Court says

Copyright © 2015 Albuquerque Journal

It was a topsy-turvy day Friday for the future of the San Juan Generating Station near Farmington.

First, the New Mexico Supreme Court temporarily halted all Public Regulation Commission proceedings on the future of the coal-fired power plant near Farmington.

Then, later in the day, the court said a PRC hearing scheduled Tuesday on a proposed settlement reached with Public Service Company of New Mexico, several environmental groups and the attorney general on the plant’s future could go forward – as long as the commissioners themselves were not involved.

The Tuesday hearing is on a settlement agreement that would allow PNM to shut down two of San Juan’s four generating units to meet federal environmental mandates to lower haze. The power would be replaced with a combination of nuclear, natural gas and solar generation.

The rapidly changing events Friday were centered on an environmental group’s petition asking the court to throw four of the five elected PRC commissioners off the case.

New Energy Economy of Santa Fe alleges commissioners Karen Montoya, Patrick Lyons, Sandy Jones and Linda Lovejoy have demonstrated bias or the appearance of bias regarding PNM’s plan to shut down the two generating units at the plant, which PNM co-owns and operates.

The group says those commissioners have maintained ongoing “ex parte communications” with PNM officials about the San Juan case by phone, email, and direct meetings, and that public statements by those commissioners indicate they’ve already decided in favor of PNM’s plan.

The fifth commissioner is Valerie Espinoza of Santa Fe.

New Energy petitioned the Supreme Court on Monday to grant a stay in PRC proceedings to review its allegations against the commissioners after it unsuccessfully requested in early September that the commissioners recuse themselves.

On Friday, three of the five Supreme Court justices – Barbara J. Vigil, Petra Jimenez Maes and Edward L. Chávez – granted New Energy’s request for a stay. The court also ordered PNM and another environmental group, Western Resources Advocates, to file written briefings on New Energy’s allegations by Oct. 27, with oral arguments in the case scheduled for Nov. 9.

But after PNM filed an emergency motion Friday, justices changed their order. Now, the proceeding before a PRC-appointed hearing examiner can go forward on Tuesday because commissioners are not involved.

“We are pleased that the Supreme Court has taken our allegations seriously,” New Energy executive director Mariel Nanasi said after the high court’s initial ruling. “All along we wanted a fair hearing from unbiased decision-makers on the merits. New Mexicans deserve fair, conscientious and independent adjudicators.”

The court decision, however, does not indicate a ruling in favor of New Energy, PNM spokesman Pahl Shipley said. Rather, it gives the justices time to fully consider the parties’ positions before making a ruling.

“We believe New Energy Economy’s position is baseless,” Shipley told the Journal in an email. “PNM is confident the record shows the company’s plan for the San Juan Generating Station is the best path forward, providing the most environmental benefits at the least cost to consumers.”

But New Energy opposes the agreement, saying instead PNM should shut more of the plant and get more renewable energy to make up for lost generation.

That, in turn, has put New Energy and two other environmental organizations that support the agreement in opposing camps regarding San Juan.

One of those groups, Western Resources Advocates, intervened at the Supreme Court against New Energy’s petition, arguing there was insufficient evidence to show prejudice. Rather, much of the evidence relates to general contact with PNM officials independent of the San Juan case, Western Resources said.

It said granting a stay to New Energy would severely disrupt the proceedings on San Juan, which have been underway for nearly two years now.

PNM says a delay could throw key parts of the San Juan agreement into disarray. For example, the company needs final PRC approval on shutting the two units so it can execute new ownership restructuring agreements with other utilities at the plant. Also, it must finalize a new coal supply contract.

The Coalition for Clean Affordable Energy, which supports the San Juan agreement, is worried about the future of the proceedings, chief attorney Chuck Noble said.

“If the Supreme Court recuses commissioners or dismisses PNM’s case, then we’re back where we started with the full coal plant operating. That would be a bad outcome,” Noble said.

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