Many are confused by what the Public Regulation Commission does, how Commissioners are elected and how decisions are made. In today’s post, we clarify how the PRC operates and why the 2018 PRC primary election is so vitally important. For once, we have two tremendous choices running and Retake will have both of them in Santa Fe on April 9th. Winning these two races would utterly change the direction of energy in NM. At last.
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What is the Public Regulation Commission (PRC) and Why is the June Primary So Important?
What is the PRC and how does it operate? The PRC regulates a wide range of industries including: transportation, utilities, telecommunication and even the State Fire Marshall. Of most importance is its role in regulating telecommunications (cell phone and land line providers) and its regulation of utilities: El Paso Electric, Southwest Public Service Corp. and Public Service Corp. of NM (PNM). Retake has focused on its role in (not) regulating PNM although, given the horrid cell phone service available in much of NM, perhaps we should expand that scope.
The PRC has a staff of Hearing Examiners who review applications from utility companies related to proposed rate increases and major expenditures or investments that would impact consumer rates. By law, the PRC must base decisions on proposed investments in different sources of power, based upon whether that decision will be the most cost efficient. The Hearing Examiner will spend months examining a proposal from a utility provider like PNM and then publish their findings in advance of a hearing of the PRC. Indeed, the Hearing Officer is the only person who hears all the evidence, challenges testimony and reviews all the documentation submitted in evidence. The PRC Commissioners almost never attend these hearings. So it would seem important that the Commissioners seriously consider Hearing Officer recommendations.
The Hearing Examiner’s report is then shared with the five Commissioners who conduct a public hearing with testimony from the utility company and most often a number of environmental groups. After the hearing, the five Commissioners vote to accept, reject or revise the Hearing Examiner’s recommendations. Since 2015, generally be a vote of 3-2, the PRC has voted against the Hearing Examiner’s recommendations and sided with the utilities on almost every PNM case. Retake has reported extensively on many of these cases. Click here to review three major cases over the last 18 months in which the PRC overturned the Hearing Officers and sided with PNM, despite almost unfathomably strong evidence t A few quotes from Hearing Officer findings are typical of these findings:
- “[R]atepayers are not expected to pay for management’s lack of honesty or sound business judgment.” At p. 88 “[T]o consider financial harm in determining a disallowance founded on the utility being imprudent would, in essence, be rewarding a utility for its imprudent acts.” Yet the PRC voted 3-2 to overturn the Hearing Officer.
- “there is a substantial record on which to make a finding of imprudence. The Hearing Examiners find that the appropriate remedy for PNM’s imprudence in extending its participation in Four Corners and pursuing the $90.1 million of this investment and the $58 million of the additional life-extending capital improvements is the disallowance of all costs associated with the investment and improvements.” i.e. The Hearing Officer wanted to disallow all of PNM’s $148M in claims. Yet the Commissioners overturned again.
So who are these Commissioners? The five elected Commissioners, their districts and their voting tendencies are:
- District I (most of Albuquerque ) is represented by Cynthia Hall who tends to vote in accordance with Hearing Examiner recommendations;
- District II (the rural eastern part of the state) is represented by Patrick Lyons who tends to vote with the utility companies;
- District III (north central portion of the state, including most all of Santa Fe) is represented by Valerie Espinosa who tends to vote with the Hearing Examiners;
- District IV (northwest part of the state but with portions of her district covering west Santa Fe and portions of ABQ) is represented by Lynda Lovejoy who tends to vote with the utilities; and
- District V (the southwest portion of the state, including Las Cruces) is represented by Sandy Jones who tends to vote with the utilities.
Click here to see the state map with PRC boundaries.
Why is the 2018 election so important? Two of the three Commissioners who almost always vote with the utilities are up for re-election this year and they are challenged by two candidates (Janene Yazzie-District V and Steve Fischmann-District IV) both of whom have a strong history of advocating on behalf of consumers and the planet. While it is impossible to know for sure how the challengers would have voted on each of the examples described here, it is highly likely that they would have sided with the Hearing Officer. As a result, instead of being decided 3-2 in favor of PNM and overruling the Hearing Officer, the vote would have become a 4-1 to affirm the Hearing Officer recommendation, saving ratepayers hundreds of millions of dollars. The votes in the three example cases underscore how critically important this race is and why Retake feels that, after the Governor’s race, the elections in Dist. IV and V are the second and third most important elections in the state.
The examples cases get a bit thorny, although I have tried to simplify them, but the big picture issue is that in a state with unlimited solar and wind capacity and in an economic context where solar and wind are now less expensive than other options, PNM and other NM utility companies continue to find reasons to invest in more costly and environmentally devastating options, because it makes them more money. How else do you explain PNM’s current energy portfolio with only 8% renewables, with the chart at left taken from PNM’s website?
If we are EVER going to achieve a 100% renewable energy portfolio, it will require a PRC with a strong environmental perspective. The cost of renewables now is lower than coal or nuclear. Advances in storage capacity make it possible for the state to run on 90%+ renewables within just a few years. All that is lacking is the will to stand up to PNM. Yazzie and Fischmann have the will.
Click here to read more about Janene Yazzie and her campaign in District 4.
Click here to read more about Steve Fischmann and his campaign in District 5.
Paul & Roxanne