Commisison requires PNM to credit customers and issue community funds as soon as San Juan plant closes
The Public Regulation Commission voted 5-0 on June 29 that PNM violated the Energy Transition Act, agreeing with environmental and consumer groups that PNM should not keep charging customers for San Juan Generating Station expenses long after the plant is closed. The commission also required PNM to issue the community and worker funding that would be generated by the Energy Transition bonds as soon as the coal plant closes.
“The ruling means the average PNM customer will see a savings of more than $8 per month, and hundreds of dollars over the next 18 months,” said Ona Porter of Prosperity Works, which advocates on behalf of low-income consumers.
PNM planned to charge customers for coal expenses after it exits the plant in September, which would have resulted in over $125 million in double collections from PNM ratepayers. The company is appealing the decision.
PNM revealed earlier this year that it would delay issuing ETA bonds until after it filed its next rate case. The low-interest ETA bonds dramatically lower customer payments for stranded San Juan Generating Station expenses and were meant to be issued when the utility exits San Juan. Instead, PNM planned to keep charging customers for as long as 18 months afterward, until after its next rate case.
The charges would include operations and maintenance costs that the utility was no longer paying, as well as a rate of return that PNM collects.
The savings from the bonds’ lower interest rates (compared to the 10% rate of return customers are currently paying to PNM) will also provide $40 million in funding for impacted communities and workers.
Dozens of New Mexicans, including many from the impacted Four Corners area, offered public testimony last month urging transition, immediate rate credits reflecting the savings of removing coal from PNM’s portfolio, and immediate investment of ETA transition funds for the community and plant and mine workers.
“The Energy Transition Act’s intent is carried out by the decision today. For those having a hard time paying their energy bills, relief is coming,” said Stephanie Dzur, an attorney representing the Coalition for Clean Affordable Energy.
“PNM wanted to continue to charge New Mexicans for a coal plant the utility will be closing, hiding the benefits of switching from coal to cleaner sources of energy,” said Cara Lynch, attorney for CCAE and Prosperity Works.