Also recommends regulators reject PNM’s rooftop solar tax proposal

ALBUQUERQUE – The future of coal at the San Juan Generating Station grew cloudier today after a New Mexico Public Regulation Commission (PRC) hearing examiner recommended that the commissioners reject PNM’s proposal for a large rate hike along with plans to impose a monthly fee on residents who install rooftop solar.

The Hearing Examiner recommended rejection of PNM’s rate hike application due to the application being incomplete and without proper support. Earlier this week, Attorney General Hector Balderas issued a petition urging the Public Regulation Commission to dismiss PNM’s solar tax proposal.

A copy of the recommendation can be found here: https://drive.google.com/file/d/0BwIXiaj8LQ3GcnNTSzdZaXh6VXM/view

The announcement comes just over a week after another independent hearing examiner recommended that the commissioners reject a separate proposal by the utility to increase its stake in the dirty, expensive San Juan Generating Station.

Today’s recommendation, if approved, would prevent PNM from charging ratepayers tens of millions of dollars for additional spending that it had planned at San Juan Generating Station. The recommendation creates yet another hurdle for PNM as support for the continued burning of coal at the plant continues to evaporate across the region.

PNM’s proposal also included a monthly fee it would impose on everyone who installs solar on their rooftop. PNM claimed that the fee was to cover its costs for distributed generation of solar energy, but it gave no basis for its cost claims. On Wednesday, Attorney General Hector Balderas filed a petition asking the Public Regulation Commission to initiate a study to investigate whether residential solar is a net benefit or cost to PNM.

In response, Nellis Kennedy-Howard, Senior Campaign Representative for the Sierra Club’s Beyond Coal Campaign, issued the following statement:
“Another week, another hurdle for PNM’s plans to pour ratepayer money into the dirty, expensive San Juan Generating Station. We applaud the hearing examiner’s recommendation and we urge the Public Regulation Commission to reject this expensive proposal.

New Mexico can and should be a clean energy leader in our country. Yet PNM’s plan to tax clean energy solutions like rooftop solar and to continue burning more coal at the San Juan Generating Station threatens the financial security of New Mexico families, the health of our communities, and the opportunities for our state to transition to more clean energy jobs.
Rather than lock our state into a future of more dirty, expensive coal, the PRC should protect New Mexico jobs and families by rejecting this dangerous, expensive rate hike proposal.”

BACKGROUND:

Support for continued burning of coal at the San Juan Generating Station has fallen as admissions by the company have revealed serious financial risks for the future of the plant, including the uncertainty of where the plant will get its coal after 2017. Last month, the home city of the plant, Farmington, New Mexico, announced it would not acquire an increased stake in the plant due to reliability concerns and the huge costs that would be passed on to the community. Other New Mexico stakeholders have also pulled away from an agreement that would continue PNM’s use of coal at the plant, citing the overall uncertainty about San Juan’s operations. The Albuquerque City Council passed a resolution on April 6 formally opposing PNM’s plans and urging the New Mexico Industrial Energy Consumers, of which the City of Albuquerque is a member, to withdraw its support.

In addition, PNM announced that due to a cost accounting error, the total bill for their plan to increase reliance on dirty coal and other expensive fuels had jumped by over $1 billion, with those costs likely being passed onto local ratepayers. This comes just weeks after PNM introduced a rate proposal that if approved would result in nearly a $10 month increase to the average residential home bill due to utility’s plans to continue burning coal at the plant for the foreseeable future.

In his recommendation to the PRC commissioners, Ashley Schannauer, the independent hearing examiner overseeing PNM’s request to the Commission, also expressed his concern that customers would be harmed by PNM’s plan. “The stipulation as a whole does not produce net benefits to the public,” said Schannauer. “The dollar impact of the risks, however, appears to significantly exceed the dollars saved.”

The recommendation highlighted the risk that customers may be left holding the bag for a plant that is proving to be a far greater liability than previously disclosed. “PNM’s increasing ownership and responsibility for San Juan may pressure PNM to continue to act as the owner of last resort, absorbing exiting owners’ shares to protect its investment even if the plant has become uneconomic – in a version of the ‘too big to fail’ syndrome,” Schannauer continued. A copy of that recommendation can be found here.