This is serious. The legislature starts next week and PNM has proposed an extremely dangerous bill, a plan to circumvent the Public Regulation Commission and you. Poor People’s Campaign NM launches Today.
PNM Action Alert
In 2016, we retook the Roundhouse, putting the Democrats in firm control of both chambers. We didn’t do that so that they could then bow to the pressure from the gas and oil industry and award PNM huge piles of money for absolutely nothing. This is greed on steroids and PNM would not be proposing it if they did not think they, their attorneys and their lobbyists could pull it off. This is the kind of moment for which Retake Our Democracy exists. We must oppose this with all our strength. At the bottom of the blog is contact information for House Speaker Brian Egolf and Senate Leader, Peter Wirth along with speaking points. PLEASE SHARE THIS BLOG ON YOUR FB page and send it to ten friends. Speaker Egolf and Sen. Wirth are homegrown leaders. it is time for them to make sure the values and priorities of our community are respected and protected. Visit, call, email. And watch for more notices as PNM will most surely do some fancy footwork and soon.
Let’s Start with What You Can Do
2) Join New Energy Economy for a webinar on Monday at 2:00PM to learn more deeply about this legislation. To participate in the webinar, sign-Up HERE. You can also participate in person at the New Energy Economy office at 343 E. Alameda in Santa Fe.
3) Call and email Speaker Brian Egolf and Sen. Peter Wirth. They are Santa Fe elected officials and more importantly they will be key in making committee assignments. Encourage Speaker Egolf to send the bill to House Energy and Natural Resources where Rep. Matthew McQueen is Chair and ask Sen. Worth to have it assigned to the Public Affairs Committee.
4) Visit your legislator and key committee members who will see this bill early on.
If this bill passes, our movement’s hard work to ensure that PNM is held responsible for the closure of San Juan will not only be undermined but entirely circumvented — as we won’t have the opportunity to make demands on behalf of New Mexicans in the PRC Abandonment Case in relation to PNM’s failed assets, replacement power, clean-up, and economic reparations. All of these things should be clarified with specific commitments made before any kind of financial agreement should be made in the Roundhouse. In the absence of strong, specific commitments. PNM’s effort to circumvent the PRC and seek $350 million should trigger a very thoughtful process for:
- Identifying a remediation plan for Four Corners and San Juan;
- Developing an economy recovery plan for Four Corners and San Juan;
- Committing to a very specific replacement power plan that is comprised primarily of renewable energy; and
- Agreeing to some level of economic reparations for the damage done to the local health and social fabric of the San Juan and Four Corners communities
Without a clear agreement covering all of these issues, agreeing to any level of compensation for failed assets is entirely inappropriate. IIt isn’t as if PNM has been the most trustworthy corporation, with a lengthy list of misrepresentations and dissembling all focused on one and only one thing: profit.
Please consider joining us on Monday for our emergency webinar. If you can’t make it Monday but would like to volunteer for this critical campaign, please sign-up HERE (at the bottom of the page).
PNM’s HAS INTRODUCED SB 47, “THE ENERGY REDEVELOPMENT BONDING ACT” — A CORPORATE BAIL-OUT FOR SAN JUAN THAT IS THE ANTITHESIS TO A JUST TRANSITIOn. “THE ENERGY REDEVELOPMENT BONDING ACT”:
- Awards PNM $353 million from ratepayers for their “stranded assets” at San Juan
- Awards PNM ownership of 100% of the Replacement Power Resources
- Strips the PRC of their power to regulate the determination of replacement power resources for San Juan’
- Does not provide adequate resources for clean-up and remediation
- Includes NO reparations or redevelopment funds for workers and impacted communities
PNM has introduced a “Energy Redevelopment Bonding Act” – Senate Bill 47. This “securitization” bill in its proposed form is a bail-out for failed assets at San Juan. In advance of abandonment approval by the PRC for San Juan units 1 & 4 PNM is seeking to recoup $353 million from ratepayers for the money it planned to make on those assets.
Here’s what’s wrong with PNM’s securitization of failed assets at ratepayers expense:
1. Stranded assets recovery has historically been awarded when there is an external cause (EPA Regulation, like the Regional Haze Rule) causing unexpected “early” retirement of a plant. In those instances, the PRC has held that the burden must be shared 50/50 between shareholders and ratepayers. A 50/50 split would SAVE ratepayers money compared to the proposed legislation. But more importantly, in the current case, PNM is not closing San Juan because of some external cause, it is closing San Juan because 1) all the other co-owners want out; 2) PNM cannot meet its burden to show that San Juan is cost effective against alternative resources (wind & solar); and 3) PNM’s internal senior management and Board assessment is that PNM can make more money (their estimate is $532 million) closing San Juan than running it. So, we have PNM making a business decision that will reap over half a billion dollars in profit AND they want an additional $350 million for…..well, for nothing.
PNM is afraid that the PRC may award PNM nothing – zero dollars because of the reasoning behind “early” closure: San Juan will be more than 50 years old at that time, is poorly performing (only runs about 68% of the time), and is more expensive for ratepayers than alternatives. At maximum the PRC will award PNM 50%, because that is what PRC precedent is and that is what was awarded when there was a legitimate external cause that forced early retirement. (PNM has San Juan depreciated out to 2053.)
2. The Legislature should NOT award PNM any more money than PNM would get at the PRC just because PNM is afraid of what the PRC will do in its request for cost recovery from ratepayers for stranded assets. PNM is making an end run around the PRC and asking for 100% recovery at the Legislature. The Legislature has empowered the PRC to regulate utilities but PNM is now afraid to go before the PRC for stranded asset recovery.
PNM falsely claims that its Energy Redevelopment Act will save ratepayers money but that is only if the PRC gives PNM the right to 100% recovery of stranded assets – which it most certainly will not. PNM never chooses to lose money – actually its against their fiduciary duty to do so. Therefore, they can’t choose to save ratepayers money over making money for its shareholders, unless regulated to do so. And so what better way to make more money than skirting PRC regulation. That is what SB 47 is about.
PNM falsely claims that getting 100% recovery on $353 million at 3-4% interest through the Roundhouse would save the ratepayers money. But that is only the case if you assume that the PRC would provide the same level of bailout ($353M) because with the PRC the rate of return is 9.575%. But this is an entirely specious argument as the PRC has already made clear that AT BEST, PNM would receive $175 million and could well award zero, as explained above.
3. This bill is premature. PNM will file its abandonment case at the PRC expected in July 2018 which will provide a critical opportunity for extensive and exhaustive discovery regarding replacement power & energy ownership, clean up, reparations for San Juan county residents and workers, etc. There is much to be understood. By taking this to the Legislature at this time, PNM is attempting to circumvent the PRC and exclude other parties from impacting the resolution of these issues.
4. This bill bakes in PNM ownership of ALL replacement power resources on PNM-owned land to the detriment of a robust competitive renewable energy RFP process that could produce ten thousand new jobs in New Mexico. So this is problematic for a number of reasons:
- It violates anti-trust provisions, is anti-competitive, and is inherently unfair stifling (if not killing) the market for other power producers;
- It will NOT result in the lowest cost renewable energy for consumers; and
- Effectively undermines the authority of the PRC to require a utility to “acquire the most cost effective resource(s) among feasible alternatives.” This IS the bedrock of utility law and has repeatedly been followed. If PNM was NOT the gatekeeper in charge of ALL renewable energy then other independent power producers would be creating jobs, thousands of jobs here and we could diversify and grow our economy.
For those of you with an interest in going deeper into this bill and the harm it will cause, see the links below.
- See the proposed PNM legislation HERE
- See NEE’s technical analysis HERE
- See NEE’s financial analysis HERE
CALL TO ACTION
Call, Email, Visit Democratic Party Leadership below. Tell them you do not want the Roundhouse to allow PNM to circumvent PRC governance. You do not want to award PNM any compensation for SJ until a needs assessment for the region is completed and clear, specific commitments are made in relation to future replacement power.
Speaker Brian Egolf:
Visit him in RM 104 at the Roundhouse AND call/email. Office Phone: (505) 986-4782 Email: firstname.lastname@example.org
Sen. Peter Wirth:
- Capitol Phone: 986-4727
- Capitol Room: 119
- Office Phone: (505) 988-1668
- Home Phone: (505) 989-8667
- Email: email@example.com