For Immediate Release: Aug. 18, 2023
Energy Transition Act Delivers $115 Million Back to PNM Customers as Deadly, Costly Coal Plant Closes and Renewables Take Hold
PNM agreed today to deliver $115 million back to PNM customers in a settlement agreement with advocacy groups. These savings come from switching from expensive coal to solar with battery storage and from expected savings from Energy Transition Act bonds. PNM should have issued bonds when the coal-fired San Juan Generating Station closed in September. The bonds were meant to refinance PNM’s previous investments in the plant that customers would otherwise still have to pay off after the plant was no longer producing electricity.
Now after months of pressure from climate and community advocates, PNM is doing the right thing. Thanks to the leadership of the Attorney General Raul Torrez and advocacy groups, customers may, if remanded back by the New Mexico Supreme Court to the PRC for approval, see an average monthly rate credit of around $9.28 on their bills titled “San Juan ETA Settlement Credit.”
After two PRC decisions ordering PNM to honor the intent of the ETA and issue rate credits if it refused to issue Energy Transition bonds, and a delay in the form of a Supreme Court appeal by PNM, the utility is doing the right thing and offering customers immediate credits for the next 12 months.
The ETA has led to 100% renewable and battery replacement for the San Juan Generating Station’s Coal generated electricity, all located in the impacted community to replace the property tax base of the plant. It led to millions of dollars in severance pay to plant and mine workers as well as funding for key community projects. Advocates continue to ensure utility compliance with the law in all cases.This includes the requirement that new energy built for New Mexico customers meets the required registered apprenticeships and appropriate customer savings.
Advocacy Groups Respond
“All of the arguments against paying what was due to customers in the PNM settlement disregarded the urgency of nearly half of its ratepayers who struggle every day to meet their basic needs,” said Ona Porter of Prosperity Works. “It is absurd that we had to spend so much time in litigation, and that customers had to wait for a bill credit that was rightfully theirs over a year ago.”
“This summer has been full of extreme heat and drought, showing just how much we need policies like the Energy Transition Act. The closure of the San Juan Generating station has allowed for a better quality of life for our communities. Additionally, now PNM customers will benefit from the credit on their bills as a result of the move towards renewable energy.” Ahtza Chavez, Naeva, Executive Director
“PNM tried to withhold Energy Transition Act customers’ savings from the San Juan plant closure, but now we’ll each see our fair credit on our bills,” said Camilla Feibelman, Sierra Club Rio Grande Chapter director. “The PRC twice directed PNM in no uncertain terms to credit customers for the ETA bonds the company delayed, but instead, they kept collecting a 10% rate of return from customers rather than the $9 monthly savings they should have seen as a result of San Juan coal plant closing and the ETA. This settlement allows customers to see the savings that come from turning away from deadly coal and toward renewable energy.”
“This proposed settlement will deliver to PNM customers the savings promised in the Energy Transition Act by moving away from costly, unhealthy polluting fossil fuels—and toward clean energy,” said Noah Long Director, Western Region Climate and Clean Energy Program at NRDC (Natural Resources Defense Council).
“This is another great sign that New Mexico’s Energy Transition Act is working as planned, moving us toward 100% carbon-free electricity by 2045, while providing some measure of environmental justice to those affected by the clean-energy transition near the now-retired San Juan Generating Station, said Tom Solomon, co-coordinator of 350 New Mexico. “The proposed rate credit of $115 million over 12 months will visibly ease energy costs to PNM’s over 525,000 customers while we all enjoy the cleaner skies and clean-energy jobs that are coming with the transition. There ARE solutions to the climate crisis. This is what one of the biggest solutions looks like.”
In the 2020 decision deciding replacement power for San Juan, PNM had indicated it would issue Energy Transition bonds at plant closing. The bonds would considerably lower the 10% rate of return customers had been paying on previous San Juan investments, lowering ratepayer costs as well as providing transition funding for coal workers and the community surrounding San Juan.
In 2022, PNM revealed it planned to delay bond issue until its next rate case, collecting customer payments at the current rate for an inoperative plant and keeping higher rates so the rate hike would not seem as steep. The Public Regulation Commission twice ordered PNM to issue immediate rate credits in the amount that would have been provided by the Energy Transition bonds — these would have averaged more than $8 a month until the next rate case. But PNM appealed and won a stay at the state Supreme Court. In the meantime, interest rates have increased, lowering the savings customers could recognize from securitizing PNM’s remaining debt in San Juan.
Customers have seen some savings from a reduction in fuel costs since the plant closed. And PNM has pre-funded the $40 million in worker and community funds, though not all of those funds have been distributed yet by the state.
Featured image from 350 New Mexico