New Mexico Supreme Court to hear arguments in energy case | KOB 4
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New Mexico Supreme Court to hear arguments in energy case

New Mexico Supreme Court to hear arguments in energy case

The Associated Press
Created: January 29, 2020 06:32 AM

SANTA FE, N.M. (AP) — A ruling from the New Mexico Supreme Court could determine how the state implements a landmark law that clears the way for the closure of a coal-fired power plant and sets aggressive statewide goals for being carbon-free by 2045.

Oral arguments in the case are scheduled Wednesday in Santa Fe. It’s unclear how soon the court could issue a decision.

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Gov. Michelle Lujan Grisham petitioned the court in December to force the Public Regulation Commission to take into account the Energy Transition Act as part of the proceedings over shuttering the San Juan Generating Station near Farmington.

Public Service Co. of New Mexico submitted its application for closing the power plant last summer. It covered the closure as well as proposals for replacing the lost capacity when the plant ends operations.

Regulators opted to consider a portion of PNM’s application as part of an ongoing case that involved abandonment of the plant, raising questions as to whether the new energy law would be applied to the decision-making process since it took effect after that case began.

The governor and other critics have accused the independently elected commission of using procedural maneuvers to undermine the law and the Legislature’s role in setting energy policy.

“The PRC’s perpetuation of a regulatory atmosphere of uncertainty and risk compromises the goals and intentions of the ETA and harms New Mexico, the Navajo Nation and New Mexicans in a manner that cannot be undone,” the petition reads.

The utility and environmental groups are hopeful the court will press the commission to implement the law.

Aside from mandating more renewable energy, the measure includes a financing mechanism that supporters say is necessary for the plant’s closure in 2022.

The law allows PNM and other owners of San Juan to recover investments in the coal-fired plant by selling bonds that will be paid off by utility customers. The bonds would raise roughly $360 million to fund decommissioning costs, severance packages for displaced workers and job training programs.

Advocates for utility customers say that repayment plan is skewed to the advantage of utility stockholders. They have urged regulators to intervene, saying the commission has a responsibility to balance the interests of both shareholders and customers.

Utility executives have said residential customers would end up saving about $7 a month in the first year after the plant closes under its preferred proposal.

They have not been able to say what, if any, savings customers would see after that due to uncertainties about the costs of replacing the power with a proposed mix of new natural gas plants, renewable energy and battery storage systems.


(Copyright 2020 by The Associated Press. All Rights Reserved.)

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