The New Mexico Public Regulation Commission is currently reviewing a rate case in which the Public Service Company of New Mexico is requesting a 16 percent rate increase to recover costs associated with replacing the generation capacity that was lost when they were ordered to prematurely retire two coal-fired generating units and for dust pollution controls that the New Mexico Environment Department had previously mandated.
The power being retired is “on demand” energy, which means that it is available day or night, including when consumer demand is high.
Because the sun doesn’t shine all of the time and the wind doesn’t blow constantly, and because the ability to store electricity on a large scale does not yet exist, our only “on demand” energy options are coal, natural gas and nuclear.
Despite this, opponents of traditional energy want all energy to come from renewable sources.
The recent lightning strike outage that resulted in a few hours of darkness for 140,000 Albuquerque customers vividly demonstrates the importance of “on demand” energy. Until New Mexicans are willing to live without electricity when the sun isn’t shining and the wind isn’t blowing, no valid argument can be made for replacing “on demand” electricity with intermittent renewable energy sources.
The PRC’s hearing examiner has suggested that the PRC commissioners should deny PNM’s request for compensation. The examiner is not suggesting that PNM is asking for too much compensation; rather, she is suggesting that PNM should get zero recovery.
It seems to us that PNM will likely prevail in court if the PRC follows the hearing examiner’s advice, as the expenditures forced on PNM were far greater than zero. Is this really the direction that the PRC wants to take? If so, the commissioners are abdicating their responsibility and compelling the courts to make the hard decisions.
We agree that a 16 percent increase seems high, but that’s what happens when regulators impose these extreme renewable energy requirements on energy companies.
Today, the average PNM customer pays 10 cents per kilowatt hour, while California Edison customers (who have a greater reliance on renewable energy) pay 30 cents per kilowatt hour, on average.
Is this New Mexico’s future – a California-style 200 percent increase – three times what we are currently paying?
And, more importantly, have the citizens of New Mexico and the various regulators considered the cost of not having electricity when we need it? We’re not just talking about the conveniences of lights, television, video games and computers; we’re talking about necessities like refrigerators, heaters, air conditioners and medical equipment.
Finally, any apples-to-apples energy comparison would not be complete without mentioning that, unlike traditional energy sources, renewable energy does not contribute a dime of severance taxes. Severance tax revenues are what pay for our public schools and basic government services.
Renewable energy activists think that their agenda should be the PRC’s one and only priority, regardless of the consequences to New Mexico consumers and taxpayers.
These activists have decided that it is easier to intimidate five PRC commissioners than to go through the proper channel of convincing a majority of 112 state legislators and the governor to get their desired policy changes.
When it comes to energy, the PRC has two primary obligations: 1) to ensure that New Mexico consumers have reliable electricity, and 2) to keep that electricity as affordable as possible.
If the members of the PRC believe that an activist agenda is of higher priority than reliable and affordable electricity, or they are simply too afraid to make difficult decisions, it might be time for the people to reconsider whether the PRC as an elected body is able to serve the best interests of all New Mexicans.
Also signed by the following state representatives: James Strickler, R-Farmington; Sharon Clahchischilliage, R-Kirtland; David Gallegos, R-Eunice; Larry Scott, R-Hobbs; Cathrynn Brown, R-Carlsbad; Candy Spence Ezzell, R-Roswell; Larry Larranaga, R-Albuquerque; and Jim Townsend, R-Artesia.