PRC hearing examiner recommends nixing some customer costs for Four Corners coal plant

For immediate release: Dec. 8, 2023

Contact: Camilla Feibelman, camilla.feibelman@sierraclub.org

Matt Gerhart, Sierra Club Environmental Law Program senior attorney, matt.gerhart@sierraclub.org

On Friday, Public Regulation Commission hearing examiners issued a 360-page recommended decision in PNM’s rate case. They recommend the commission find that PNM acted imprudently in extending its participation in Four Corners Power Plant beyond 2016, and they recommended the commission adopt a roughly $84 million disallowance.  

In PNM’s pending rate case, PNM has asked the Commission to approve rates that include more than $200 million in costs associated with operating the Four Corners coal plant after 2016.  Those are costs that PNM incurred after it decided to renew its stake in the coal-fired Four Corners plant after 2016, when the prior coal supply agreement expired. This issue was first litigated in PNM’s 2016 rate case, in which the hearing examiners found those expenditures to be imprudent, but the commission ultimately deferred a decision on prudence until the next rate case and approved a settlement that allowed PNM to recover a reduced amount in rates. 

The current case regarding more than $200 million in Four Corners costs comes after PNM’s 2021 proposal to transfer its 13% stake in Four Corners to NTEC, the owner of the mine that feeds the plant. The commission rejected that transfer, and Sierra Club and commission attorneys successfully defended that decision at the Supreme Court this year. 

The commission will review the Recommended Decision and make the final decision on the Four Corners prudence issue and other rate issues. Sierra Club attorneys and its expert, Jeremy Fisher, put on a persuasive case on PNM’s imprudence, refuting PNM’s expert on prudence, refuting PNM’s expert on the remedy, and demonstrating that ratepayers are entitled to a very significant disallowance for PNM’s bad decision-making with this coal plant, backed by financial calculations and analyses that PNM was unable to effectively refute. “We expect the Four Corners recommendations to be adopted by the Commission, for the reasons that are given in the recommended decision,” said Sierra Club attorney Jason Marks.  

Photo of Four Corners Power Plant in 2011 courtesy San Juan Citizens Alliance

PRC hearing examiner recommends nixing some customer costs for Four Corners coal plant