This week's

column features the not-so-unusual case of

a big utility (PNM) predicting that environmental regulations will wind up costing its customers too much

($90 per customer per year for 20 years).

But according to New Mexico Environment Secretary

,

it didn't have to be that way.

After the jump, read Curry's thoughts on the state's latest dust-up with PNM—and where things broke down.

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First, a quick rundown: The latest scuffle between PNM and the Environment Department (NMED) is over

EPA requirements to reduce "regional haze."

This requirement, which has been around since 1999, affects only one of PNM's coal plants, the San Juan Generating Station.

Specifically, PNM and NMED disagree on

what kind of technology

should be installed to reduce emissions at San Juan. PNM contends that the technology recommended by NMED is too costly; NMED says what PNM has done so far isn't enough—and that no concrete alternatives were forthcoming. But the two sides were negotiating, Curry says, on the possibility of giving PNM more time to come up with a solution. Then, abruptly, things broke down.

SFR: Tell me what happened.

RC: We were aware that PNM was going to ask for a delay. They had committed to us, earlier, that they wanted to get this done before the end of this administration, so when they asked for a delay that went into next year, they essentially said they wanted to walk this out of the administration. In doing so, they placed their fate in the hands of the EPA—and the EPA has our position on this issue....

We were seeking from PNM a very clear definition

of what their less costly technology would be. When they decided to file for a delay into next year,

we still had not seen that

, and that was giving us some pause.

Why doesn't NMED have the authority to say, 'Too bad; we're not granting that extension, and you have to get this done sooner'?

The [Environmental Improvement] Board would've had to have made a decision on our proposal in October to satisfy some

, and we had worked very diligently with PNM, trying to understand their numbers. I felt like we were making progress. But when they made the motion to take this away from the state's jurisdiction and move it into next year, I felt at that point

they were essentially walking away

from the negotiations.

So it was more helpful to PNM than to you to have this done by November?

I believe so; yeah. It would've been more helpful to them to continue negotiating with us instead of filing for a delay until next year. That was essentially saying

they would like to try their luck somewhere else.

What about the numbers—$90 per person per year for 2o years, when you do the math, comes to a minimum income to PNM of $900 million. But since their share of San Juan is less than half, their costs should only be around $330 million, even if the entire cost is $1 billion. And your department says you've never seen the $1 billion figure before—that previous PNM estimates put the total cost around $700 million.

There are

a lot of confusing numbers

in [PNM's]

. PNM's cost, they told us during the course of negotiations, would be somewhere between $320 and $360 million. [If] the total cost was $1 billion, PNM's cost, according to some of the figures they gave us, would have been less than $400 million—which is still a lot of money, but that's why the press release is confusing.

What's NMED's role in making sure those numbers are legit?

How much the ratepayer [pays] wouldn't be decided by NMED; it'd be decided by the Public Regulation Commission. The

state is the regulator

for PNM.

We let PNM go because we were convinced that no matter how hard we worked, they weren't going to follow our advice

because they wanted to take it into the next administration. And I think that was a

tactical mistake

on their part. Their interpretation on the legalities of what the EPA has to do [in terms of regulation] and what the state has to do were interpreted incorrectly.

So they're banking on EPA support that they're not going to have?

Yes.

It still sort of seems like PNM has carte blanche with the state.

That's not true at all.

Anytime we've engaged with them, we have come out on top.