For immediate release: July 6, 2023
**See live updates of our press release here.
On Thursday, the New Mexico Supreme Court affirmed the Public Regulation Commission’s order denying PNM’s application to transfer its interest in the coal-fired Four Corners Power Plant to the owner of the coal mine supplying the plant. The court rejected all of PNM’s arguments and affirmed the commission’s decision in its entirety. Sierra Club had intervened on the side of the commission after strongly advocating at the PRC for denial of the transfer of ownership and consideration of the prudence of PNM investments in the plant.
The Sierra Club supported the commission’s decision because PNM’s proposal would have kept the Four Corners coal-fired power plant polluting for years longer than necessary. PNM had proposed to pay $75 million to Navajo Transitional Energy Company, or NTEC, which owns the coal mine supplying the plant, to take PNM’s 13% stake in Four Corners off its hands. In internal emails obtained by Sierra Club during the PRC case, PNM and NTEC (which is owned but not run by the Navajo Nation) acknowledged that NTEC’s purpose in acquiring the ownership stake would be to keep the plant open and burning coal as long as possible.
The commission also ruled that in PNM’s next rate case (which is happening now), it would review the prudence of PNM’s expenses at Four Corners. PNM asked the Supreme Court to limit whether and how the commission can review PNM’s Four Corners expenses. The Supreme Court rejected that request.
Sierra Club and other parties have already submitted evidence in PNM’s rate case showing that the commission should not force customers to pay for PNM’s unnecessary expenses at the highly expensive and polluting Four Corners coal plant. The court’s ruling paves the way for the commission, in PNM’s pending rate case, to consider that evidence.
Four Corners is an aging, money-losing plant. Arizona’s utility commission in 2021 disallowed Four Corners majority owner Arizona Public Service from charging customers for hundreds of millions in previous capital investments in the plant. If the PRC makes a similar prudence determination, and APS and PNM can no longer charge customers for their bad investments, the utilities are much likelier to close the plant early and replace it with healthier and more affordable renewable energy.
PNM tried to offload Four Corners before a prudence ruling prevented it from leaving ratepayers holding the bag. The Public Regulation Commission recognized and rejected that ploy, and the Supreme Court has now upheld the PRC’s wise decision.
In response, New Mexico community and environmental groups issued the following statements:
“Our communities have sacrificed much with the Four Corners Power Plant open for over half a century. Our elders and children are the most sensitive to health and environmental impacts that emissions spew into the atmosphere. The extreme heat from global warming is hurting our elders. The polluted air from burning coal drives asthma rates in our kids. NTEC wanted to run this toxic pollution from Four Corners with coal from their mine. That idea stops now as the decision will ensure the protection from NTEC’s conflict of interest to our tribal communities.” Wendy Atcitty, Naeva, Indigenous Energy Program Manager
“The Court’s decision is a victory for PNM’s customers. PNM had tried to prohibit the commission from reviewing the hundreds of millions of dollars in customer money that PNM has poured into the expensive and polluting Four Corners power plant,” said Matt Gerhart, Sierra Club Environmental Law Program Senior Attorney. “The commission can now undertake that review, and will hopefully hold PNM accountable for its wasteful spending at Four Corners.”
“For PNM to try to get out of their ownership share of an old coal plant, by giving it to NTEC and the Navajo Nation is disingenuous,” said Jessica Keetso, Tó Nizhóní Ání Community Organizer. “PNM attempting to leave the Four Corners Power Plant to NTEC, to continue burning coal as markets for coal become unfavorable and then adding the hundreds of millions of dollars in liability and clean-up costs, will delay transition for the Navajo Nation as whole. The plant itself is also costly and will require significant maintenance and repairs. PNM still has the ability to take advantage of securitization, invest in renewables and move forward to cleaner and more efficient energy production; it’s just also important that the Navajo Nation follow suit so that decarbonization efforts are successful and ubiquitous across the Southwest. The New Mexico Supreme Court’s decision of rejecting PNM’s appeal is a step in the right direction and will allow Navajo Nation to focus on building a new workforce, supporting new economic opportunities and accessing clean energy sooner to revitalize not only our economy but also provide energy to the Navajo people.”
“The decision to reject PNM’s transfer of shares to NTEC is a huge win for Tribal sovereignty not only for the Navajo Nation but throughout Indian Country. The time has come to prioritize Tribally owned and operated clean energy projects— meaning from the top-down. This also means prioritizing community input and engagement. New Mexico is bravely stepping forward and committing to the clean energy transition, and now Tribes can lead this effort and stop investing in fossil fuel economies,” said Catherine Zingg (Ho-Chunk Nation), Director of Indigenous Partnerships at Vote Solar
“Today’s decision protects New Mexico ratepayers and Navajo people by not allowing a company that it cannot regulate to take over a facility at the end of its life and facing extensive decommissioning and cleanup costs. NTEC’s transactions have never served the Navajo Nation’s best interest and don’t require Navajo Nation approval,” said Robyn Jackson, Diné C.A.R.E. executive director.
“This decision prevents PNM from passing off its responsibilities to see this coal plant all the way through decommissioning and cleanup so that we aren’t living with its pollution for decades to come.”
“Paying $75 million to transfer PNM’s ownership to a company that has promised to run the polluting, health-damaging plant as long as possible was simply against the intent of the Energy Transition Act,” said Camilla Feibelman, Sierra Club Rio Grande Chapter director.
“The Supreme Court’s decision means PNM can’t charge customers to keep a money-losing, climate-harming plant open beyond its use-by date. This is a victory for the intent of the ETA to reduce climate pollution and protect consumers.”
“PNM’s documents showed that the utility knew that the right way to exit its interest in the uneconomical and polluting Four Corners plant would be to see the plant fully or partly retired, but under pressure from Avangrid to ink a deal, PNM engineered a transaction that did the opposite, making it much harder to retire the plant,” said Jason Marks, a former PRC commissioner who argued the case for Sierra Club at the Supreme Court and the commission. “Now that the PRC and the Supreme Court have dealt a serious setback to the PNM/NTEC plan, we can hope that PNM will collaborate with its partners and stakeholders on a real plan for ending Four Corners’ carbon emissions.”
Contact:
Camilla Fiebelman, Sierra Club Rio Grande Chapter, camilla.feibelman@sierraclub.org, 505.715.8388
Wendy Atcitty, Naeva, 505-716-3229, Wendy@naeva.org
Robyn Jackson, Diné C.A.R.E., 505-862-4433, robyn.jackson@dine-care.org
Jason Marks, Sierra Club, lawoffice@jasonmarks.com
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