Unjust Transition?

The PRC is concerned ratepayers are getting the short end of the deal to close San Juan Generating Station

Four months after New Mexico passed the Energy Transition Act—a renewable-heavy law celebrated by many environmental advocates, the Public Utility Company of New Mexico and Gov. Michelle Lujan Grisham alike—it is already having a hard time living up scrutiny by the Public Regulation Commission.

Only days after PNM released its proposal for shutting down the San Juan Generating Station and transitioning to 100% carbon-free energy sources by 2040 in accordance with the ETA, the PRC voted last week to handle the portion of PNM's plan that addresses abandonment of the coal-powered plant and financing in a separate proceeding from the procurement of replacement resources.

Because the PRC initially ordered PNM to provide its abandonment documents by March 1, before the ETA went into effect, moving this portion of the plan back into its original docket could keep the new state law from applying to the abandonment of the San Juan Generating Station.

As reported by Utility Dive, the move makes some early proponents of the bill profoundly nervous that this will negate the securitization portion of the ETA that currently assures PNM $320 million to cover the costs of closing the plant in the Four Corners. "This is an intentional action by a regulatory agency to disrupt a legislative process, which is inappropriate and not legally sound," the publication quotes Noah Long, director of the Interior West and Northwest's Climate and Clean Energy Program at the Natural Resources Defense Council, who worked closely on the bill. 

Chuck Noble, attorney for the Coalition for Clean and Affordable Energy, a group that represents a long list of environmental advocacy organizations including the NRDC, tells SFR, "If it in fact is the PRC's intention to keep the ETA from applying to the case, we're very much opposed to that," Noble tells SFR. "The reason we are opposed to that is because that would deny $40 million of benefits to the affected community of San Juan for training, for severance pay, for economic development."

But according to documents released by the PRC last week, the commission does not believe the new law allows the elected regulatory body enough time or oversight to scrutinize and vet the utilities abandonment plans or the costs that will ultimately be carried by ratepayers.

"I see no rate protections built into the [ETA]," Commissioner Valerie Espinoza tells SFR by phone. Espinoza represents PRC District 3, which includes Santa Fe. "Naturally we will be concerned about the training and the severance for workers, but ratepayers, consumers, employees, residents—many of them are all living on a fixed income. So let's not forget them in the big picture while we try to transition, because the decision I make today could impact ratepayers for the rest of their lives."

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