Today we outline why we oppose the selection of Patrick O’Connell for PRC Commissioner and offer an ever- so-easy call to action on that. We also offer a registration link and a reminder of tonight’s important Huddle with much to discuss.
Why the Senate Should Reject the Appointment of Patrick O’Connell to New Mexico’s Public Regulation Commission (PRC).
We tried to warn legislators and voters that allowing any governor to appoint PRC commissioners would not end well. And it hasn’t. The Governor’s picks and the work of the committee charged with vetting candidates has been a disaster. How did the committee forward Brian Moore to the Governor, when he stated in his interview that he was totally unqualified for the job? What’s more, how did the Governor make Moore one of her first picks? Well, Moore’s selection took the focus off of the other nominees. And now that we are likely nearing Senate Rules Committee interviews and votes on appointees and then a Senate floor vote, we want to offer our view on what we feel is the worst candidate selected by the Governor: Patrick O’Connell.
Sections 62-19-4 and 62-19-5 of the New Mexico Statutes specify the eligibility requirements to serve on the PRC: The first requirement is: “Candidates must be independent of the industries regulated by the Commission.” Yet:
- O’Connell was an exec at PNM for 12 years and with NM Gas Co for 8 years, both PRC-regulated entities.
- He testified in favor of the Avangrid merger before the PRC.
- He testified often at the PRC in support of PNM’s commitment to sustained use of fossil fuel-based energy, despite the economics clearly favoring a switch to less costly but less profitable renewables.
- His appointment is for six years, the longest possible term. We deserve a Commissioner whose allegiance is to the people, not to PNM profit.
- Carolyn Glick has 15 years of direct regulation experience, she knows the rules, the process, and the issues. She should have been the top pick and is a far superior candidate than O’Connell, with more experience and zero ties to industry.
Although Patrick O’Connell has the required education and experience, his experience comes from deep within the organizations and cultures the PRC is charged with regulating. If approved, this appointment is the perfect manifestation of industry regulated by industry.
O’Connell provided written and oral testimony on multiple occasions on the PNM San Juan Generating Station and the Four Corners Power Plant re-acquisition cases, claiming that coal investment was cost-effective for 20 years. Additionally, O’Connell supported and provided advocate testimony in support of PNM’s re-investment in Palo Verde Nuclear Generating Station. How can he offer impartial judgment in cases that review cost recovery from ratepayers involving these disputed matters?
In sworn testimony at the PRC in 2013, 2014, and 2015, O’Connell advocated for PNM’s coal reinvestment in the San Juan Generating Station. He advocated for investing $150M in pollution controls and other capital expenditures. Yet, 14 months later, PNM’s Board voted to close the plant, stranding PNM’s investments. With supporting testimony from O’Connell, PNM asked the PRC to have ratepayers pay 100% of the costs.
PNM decided to invest nearly a billion dollars in 2016 at the Four Corners Power Plant (FCPP) to further its investment in the coal plant without having conducted any contemporaneous financial assessment indicating it was financially prudent to do so. El Paso Electric’s (EPE) financial assessment at that time determined that it would be prudent to invest in solar and gas instead of more coal. It is undisputed that PNM did NO financial assessment when it decided to reinvest in FCPP compared to other alternatives, and O’Connell was at the center of and testified in support of these decisions.
Here is an example from O’Connell’s Rebuttal Testimony in July 2017 regarding investing more in Four Corners (p. 1):
“I conclude that PNM conducted a reasonable economic analysis of the cost-justification of operating Four Corners that considered projected costs of emissions controls and other environmental regulation, as well as the projected pricing sensitivities under the coal supply agreement.”
This, despite PNM’s having conducted no such analysis. After a decade of testimony in support of PNM rate increases for ill-advised coal and nuclear investments, how can O’Connell be expected to be impartial in future PNM or other IOU rate cases? He cannot.
In his Avangrid testimony O’Connell stated: “Approval of the merger based on the Stipulation also serves the public interest.”
The PRC Commissioners unanimously disagreed with O’Connell’s testimony.
O’Connell clearly has a conflict of interest that would preclude him from impartially reviewing the Avangrid/PNM merger. He provided sworn testimony in support of the merger without much evidence or demonstrable evaluation of facts. If the Avangrid/PNM merger comes back before the PRC for approval it will include ostensibly “better” merger offerings to sweeten the pot. O’Connell has already testified in support of a deal that was less beneficial to the public and was rejected by the Hearing Examiner and the PRC unanimously, as being contrary to the public interest. How can he be impartial or free from conflict of interest to review a deal that is better than what he already approved? He cannot.
O’Connell’s prejudgment is a violation of the public’s constitutional right to due process free from bias or impartiality.
Complicating the situation is that neither of the other appointed commissioners has rate making experience or the kind of regulatory finance experience possessed by O’Connell. So, if O’Connell is not approved, or if he must recuse himself on Avangrid and looming PNM rate cases, how can the other two Commissioners make decisions that involve $100’s of millions?
We ask NM State Senators to please reject this candidate and ask the Governor to appoint the most qualified candidate, Carolyn Glick. Glick has 15 years of direct regulation experience as a hearing examiner at the PRC. She knows the rules, the process, and the issues.
Call to Action
Please write to your State Senator today, sharing a link to this analysis and asking for dialog or assurance that your Senator will not support this nominee.
Click here to get to a list of Senators. Just click on the picture of your Senator and you will go to a page with their contact info.
Huddle UP: Tonight at 6.
Huddles are always illuminating, but now that the session has begun there is lots to discuss:
- What has happened already
- What is on the horizon
- PRC nomination advocacy
- A flurry of new gun violence prevention bills
- Update on Housing & Tax Reform legislation
- Immediate actions
Hope to see you tonight.
In solidarity & hope,
Paul & Roxanne
Categories: Local-State Government & Legislation